Payment aggregators can now apply for a license with the RBI by September 2022. The approval of these applications is subject to fulfillment of the eligibility criteria. The RBI announced on Thursday that PAs may now submit an application for a license by September 30, 2022
They must have a minimum net worth of Rs 15 crore as of March 31, 2022.
According to the central bank, keeping in mind the damage caused by COVID-19, it has been agreed to offer another opportunity to all such Payment aggregators (existing as of March 17, 2020)
To apply to the RBI in order to ensure seamless operation of the payments ecosystem.
The PAs will be able to carry on with their business as usual until they hear from the RBI regarding the status of their application.
The deadline of March 31, 2023, for obtaining a net worth of Rs 25 crore, will still apply.
The RBI has given its in-principle permission for a PA license to a number of payment service companies, including Razorpay, Pine Labs, Stripe, 1Pay, and Innoviti Payments.
Additionally, more participants are anticipated to receive approval from the central bank for a payment aggregator license.
In the year 2020, the RBI released guidelines that said that in order to acquire and offer payment services to merchants, only companies that had been approved by the regulator were allowed to.
Although banks don’t require separate approval, non-bank firms that offer payment aggregator services were required to apply to the RBI for authorization by June 2021.
The requirements that the companies had to meet to obtain such a license were laid out by the central bank. 180 applications, according to some reports, were submitted to the RBI. Some of these were denied, while others were approved.
It has been noted that several PAs’ applications had to be returned since they could not meet the requirements for eligibility, including the requirement for a minimum net worth of Rs 15 crore by March 31, 2021.
According to the central bank, this suggested that they had to stop operating within six months of the application’s return date.
Although they have the choice to reapply after fulfilling the prescribed requirements.
The stopping operations could cause a disruption in the payment systems.
It is also possible that some PAs didn’t submit applications to the RBI.
The reason behind the above is that they did not meet the eligibility criteria.
Payment aggregators must meet the RBI’s requirements. The net value of Rs 15 crore by March 2021 and Rs 25 crore by March 2023.
Additionally, they are required to always maintain a net worth of Rs 25 crore thereafter.
The function of a payment aggregator
Payment aggregators are organizations that make it easier for merchants and e-commerce sites to accept different payment instruments from customers.
In order to complete payments without the need for separate payment integration systems on the part of the merchants.
They make it easier for merchants and acquirers to connect. They collect payments from clients, pool them, and then transfer the money to merchants after some time.