The Reserve Bank of India (RBI) on July 28 allowed an additional window for payment aggregators (PAs) whose applications for authorisation were rejected over failure to meet the minimum net worth criteria.
“Keeping in view the disruption caused by the COVID-19 pandemic, and to ensure smooth functioning of the payments ecosystem, it has since been decided to allow another window to all such PAs (existing as on March 17, 2020) to apply to RBI,” the central bank said.
PAs can apply by September 30 and shall have a net worth of Rs 15 crore as on March 31. They shall be permitted to continue their operations till they receive communication from the RBI regarding the fate of their application. The timeline of March 31, 2023, for achieving the net worth of Rs 25 crore shall, however, remain, the RBI said.
The original deadline to submit applications was September 30, 2021. However, it was observed that applications received from some PAs had to be returned as they had not complied with eligibility criteria, including the minimum net worth criterion of Rs 15 crore by March 31, 2021, said the regulator.
According to sources, Mobikwik's payment gateway Zaakpay was one of the companies that were denied the licence for not meeting net worth requirements.
On July 8, Moneycontrol reported that Razorpay, Pine Labs and American payments player Stripe became the first few players to receive the in-principle approval from the RBI for the PA licence.
Besides these three companies, fintech startup 1Pay Mobileware, too, received approval from the RBI for the licence on July 8, the company had said in a statement.
A payment aggregator provides payment services for merchants and e-commerce sites by accepting payment instruments from customers. As part of the process, they pool the funds received from customers and transfer them to merchants after a certain time.
Payment gateways, on the other hand, simply provide technology services to businesses for processing transactions. They do not have any involvement in the handling of funds.
In a new set of guidelines issued in March 2020, the RBI had mandated that all PAs shall be authorised by the central bank. For this, the regulator instructed non-bank companies offering PA services to apply for authorisation by June 30, 2021, which was later pushed to September 30, 2021.
The decision on granting the licence has come after a period of assessment of the applications. The norms made it important for all payment gateways including Razorpay, CCAvenue, Stripe, BillDesk, PayU, and Cashfree to acquire a licence to continue. The few firms authorised to operate as payment aggregators in India will come under the direct purview of the RBI.
Under the RBI’s strict evaluation process, more than 185 fintech enterprises and startups submitted their proposals for a PA licence, Razorpay said.
Besides, a host of other players including PhonePe, BharatPe, Cred, Tata Group, Amazon, Reliance Industries, and Zomato too applied for the PA licence. The RBI is expected to inform more eligible players about approvals in the coming weeks and is also expected to officially announce the names of companies that have been granted the in-principle nod.Disclaimer: Reliance Industries Ltd. is the sole beneficiary of Independent Media Trust which controls Network18 Media & Investments Ltd that publishes Moneycontrol.com