MC Explains | What are online payment aggregators and other questions answered

The Reserve Bank of India said on February 15 that 32 existing payment aggregators have been granted in-principle authorisation to operate as online payment aggregators. That apart, applications from 18 existing payment aggregators are under assessment and those from four have been returned.

Online payment aggregators are entities that enable e-commerce sites and merchants to accept various payment instruments from customers.

These entities receive payments from customers, pool them, and then transfer them to the merchants after a period.

The RBI has granted in-principle authorisation to 32 existing payment aggregators to act as online payment aggregators.

They include Amazon (Pay) India, Google India Digital Services, Infibeam Avenues, Reliance Payment Solutions, and Zomato Payments.

Also read: RBI grants in-principle authorisation for 32 existing online payment aggregators

Applications from 18 existing payment aggregators are being processed. Applications from four have been returned.

Payment aggregators that existed on March 17, 2020, were required to apply to the RBI by September 30, 2021, for authorisation under the Payment and Settlement Systems Act, 2007. The deadline for applications was subsequently extended to September 30, 2022.

The RBI said the grant of ‘in-principle authorisation’ should not be construed as authorisation unless the entity is granted ‘authorisation’ under Section 7 of the Payment and Settlement Systems Act, 2007.

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The step was taken with the aim of bringing these entities within the regulatory ambit. For this, the central bank had issued circulars on Guidelines on Regulation of Payment Aggregators and Payment Gateways.

Only those companies that have received authorisation from the RBI can operate as online payment aggregators. Existing payment aggregators that have applied to the RBI can continue with their business. New payment aggregators can do business only after getting authorisation from the RBI.