Deadline for application for payment aggregators' license extended till 30th September

29 Jul 2022 , 08:51 AM

On July 28, the Reserve Bank of India (RBI) opened a second opportunity for payment aggregators (PAs) whose applications for authorization had been denied because they didn’t fulfil the minimum net worth requirements.

It has since been agreed to provide all such PAs (existent as of March 17, 2020) another window to apply to RBI. “Keeping in view the disruption created by the COVID-19 epidemic, and to guarantee seamless functioning of the payments ecosystem,” the central bank stated.

PAs must have a net worth of Rs15 crore as of March 31 in order to apply before September 30. They will be able to carry on with their business as usual until they hear from the RBI on the outcome of their application. The deadline of March 31, 2023, will still be used to reach a net worth of Rs25 crore, according to the RBI.

The initial application deadline was September 30, 2021. The regulator noted that several PAs’ applications had to be returned since they did not meet the requirements for eligibility, including the requirement for a minimum net worth of Rs15 crore by March 31, 2021.

By taking customer payment instruments, a payment aggregator offers payment facilities to merchants and e-commerce websites. They combine the money they get from clients as part of the procedure and transmit it to merchants after a set amount of time.

On the other hand, payment gateways only offer organizations technology services for handling transactions. They are not involved in the management of funds in any way.

All PAs must be approved by the central bank, according to a new set of rules released by the RBI in March 2020. In order to do this, the regulator asked non-bank businesses that provide PA services to submit applications for authorization by June 30, 2021; this deadline was eventually moved out to September 30, 2021.

After considering all of the applications, a decision was made to grant the license. All payment gateways, including Razorpay, CCAvenue, Stripe, BillDesk, PayU, and Cashfree, were required by the rules to obtain a license in order to function. The few businesses that have been granted permission to act as payment aggregators in India would be directly under the purview of the RBI.