RBI issues rules to regulate cross-border transactions of payment aggregators

Entities involved in processing or settlement of cross-border payment transactions for import and export of goods and services, shall comply with these instructions.

The Reserve Bank of India (RBI) on October 31 issued rules to regulate entities facilitating payment and settlement for online cross-border export/import transactions.

As per the regulations, all Payment Aggregators (PAs) which facilitate the processing of domestic transactions in online mode are covered within the scope of the circulars.

“Keeping in view the developments that have taken place in the area of cross-border payments, it has been decided to bring all entities facilitating cross-border payment transactions for import and export of goods and services under direct regulation of the RBI,” the central bank said in the regulations.

Entities, including Authorised Dealer (AD) banks, PAs and PAs-CB, involved in processing or settlement of cross-border payment transactions for import and export of goods and services, shall comply with these instructions (as updated from time to time), the central bank said in the release.

Payment aggregators

Payment gateways – companies that provide the technology infrastructure to handle online monetary transactions – are realising that getting a payment aggregator licence is a lot tougher than they imagined when the process started more than two years ago.

While the Reserve Bank of India has given in-principle approval to many applicants, final approval has been pending for more than a year. The RBI has even stopped some big companies that got in-principle authorisation for payment aggregator (PA) licences from onboarding new customers.

PAs are entities that enable e-commerce sites and merchants to accept various instruments from customers to complete their payment obligations without the need for the merchants to create their own systems. PAs get the payments from customers, pool and transfer them on to the merchants.