After a long wait, the Reserve Bank of India (RBI) has started handing out the payment aggregator (PA) licences to eligible players. Pine Labs, Razorpay and American payments player Stripe have become the first players to receive the in-principle approval for the license, according to multiple sources aware of the development.
In a mail sent to these companies, RBI said that an in-principal approval has been granted and the companies will have to conduct an audit within the next six months to get a final nod, in-line with RBI's procedure for all licenses.
Moneycontrol reached out to all three companies with queries and they are yet to respond.
In a new set of guidelines issued in March 2020, RBI had mandated that all PAs shall be authorised by RBI. 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 license has come after a period of assessment of the applications. The norms made it important for all PGs including Razorpay, CCAvenue, Stripe, BillDesk, PayU, Cashfree etc to acquire a license to continue.
Besides, a host of other players including PhonePe, BharatPe, Cred, Tata Group, Amazon, Reliance Industries, Zomato too applied for the license.
For e-commerce and other players, in the absence of the license, they will either have a tie-up with a bank that can aggregate payments on their behalf, driving up costs for payment collections services. Or, they will have to depend on a PA, leading to more business for these licensed entities
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 handling of funds.
Besides Razorpay, Pine Labs and Stripe, fintech startup 1Pay Mobileware said in a statement that it had also received in-principle approval from RBI for the license. The startup offers payment solutions to Logistics, OEM Suppliers, OMC/Fuel Distributors, and FASTag issuers.
RBI is expected to officially release the list of players who have received the in-principle approval for the license.
Disclaimer: Reliance Industries Ltd. is the sole beneficiary of Independent Media Trust which controls Network18 Media & Investments Ltd that publishes Moneycontrol.com
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