Payment processing major Razorpay and Cashfree has received the final authorisation from the Reserve Bank of India (RBI) to operate as Payment Aggregators (PA).
"We have received the final authorisation to operate as a payment aggregator by the Reserve Bank of India (RBI). We are thrilled to announce that we are now onboarding businesses on Cashfree Payment Gateway," Wrote Cashfree in a LinkedIn post on December 19.
Moneycontrol broke the news first on December 16 2022 that Razorpay along with other players has paused onboarding of online payment merchants after RBI advisory.
"We are now open to onboarding new businesses on our Payment Gateway platform. Razorpay has now received the final authorisation from the Reserve Bank of India (RBI) to operate as a Payment Aggregator (PA) under the Payment Settlements Act, 2007," Razaorpay said in an official statement to Moneycontrol.
Neobanking fintech Open has also received final approval from RBI to Operate as a Payment Aggregator.
"This approval not only acknowledges our dedication to regulatory standards but also signifies a significant leap in fortifying our commitment to SMEs...We are grateful to the RBI for their evaluation and recognition of our contribution," , OPEN’s Cofounder & CEO, Anish Achuthan said in a media statement.
The move comes after a year since RBI paused companies like Razorpay, Cashfree and Stripe to stop on-boarding new merchants till they receive the final nod for PA license.
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 systems. PAs get the payments from customers, pool and transfer them to the merchants.
Others including Enkash and Paymentz has also received the approval while PayTm, PayU and JusPay are still awaiting RBI's final nod, according to sources.
In July of 2022, Pine Labs, Razorpay and American payments player Stripe became the first players to receive the in-principle approval for the PA license. However, the final approval was pending with RBI for more than a year.
Also Read: Why Payment Aggregator licences are stuck for months
RBI said that an in-principle 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.
When the RBI issued a notification for the payment processing players, industry sources said that it would cause a setback for companies as the number of payment gateway operators competing for a piece of the payment service offerings to large businesses was growing.
"Having received the new PA license, we now restart onboarding new customers and are committed to serving them with our industry-first payment solutions. We are delighted to be one of the first Payment Gateways to have received the final PA license from RBI," the Razorpay's statement said.
"We are now onboarding new merchants on our payment gateway. We are very excited about this new phase of our journey, where we continue to drive exponential growth and retain our market leadership as the preferred aggregator in the payments space," Cashfree's spokesperson said in a media statement.
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