PayU gets Payment Aggregator license from RBI

24 Apr 2024 , 12:39 PM

The fintech company PayU, sponsored by Prosus, has received approval from the Reserve Bank of India (RBI) to function as a Payment Aggregator (PA) and resume accepting new merchants, following a roughly 15-month wait.

Because of its intricate corporate structure, the banking authority rejected the fintech company's application to function as a PA in January 2023 and instructed it to reapply.

PayU was forced to stop adding new merchants to its online payment aggregation platform as a result of this action.

Similar prohibitions were placed on Cashfree, Razorpay, and Paytm; the latter two had their approval granted in December of last year, while the former is still pending.

"We are thrilled that RBI has validated us, as it opens the door for us to accept new companies on our platform. This also demonstrates our unwavering commitment to corporate governance and compliance," stated PayU CEO Anirban Mukherjee.

"This license is crucial to our goal of building an internationally recognized digital payment infrastructure with Indian roots," he continued. Our goal is to promote financial inclusion and digitization, especially for small businesses, in line with the government's Digital India plan and the RBI's progressive policies.

Over the past year, the fintech company that is headed for an IPO has been closely collaborating with the regulator on its reapplication for the license.

PayU India reported $400 million in revenue for FY23, a 31% increase over the previous fiscal year.

Its main payments business had a 15% increase in revenue to $211 million in the first half of the year (H1 FY24), however the figures for FY24 are still pending. The onboarding of new merchants has been halted, with the majority of this coming from Wibmo's omnichannel business, current merchants, and payment processing stack.

According to a source close to the development, Kunal Shah-backed fintech company Cred recently obtained the in-principle clearance to be a PA.

Being a PA enables businesses to handle and transfer consumer funds to merchants. Those who receive in-principle approval may proceed with their business operations until instructed otherwise by RBI; this is not a formal approval or license, which will be awarded in about six to twelve months.

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