Expansion of Payment Aggregator Services in India

Image of e-wallet, money transfer, online payment concept representing the expansion of payment aggregator services in India, featuring new players and the regulatory landscape
The Expansion of Payment Aggregator Services in India: New Players and Regulatory Landscape

Recently, three new firms - Juspay, Decentro, and Zoho - have been granted official approval by the Reserve Bank of India (RBI) to operate as payment aggregators in the country. This authorization allows these entities to facilitate online payment services for merchants, simplifying the process of receiving payments from customers.

Joining the group of previously sanctioned companies such as Stripe, Zomato, and Tata Pay (which were approved in January 2023), Juspay, Decentro, and Zoho expand the list of RBI-approved payment aggregators. This list also includes notable fintech companies like Razorpay and Cashfree, who received their licenses in 2022, bringing the total to eight firms that have been granted this prestigious license by the RBI.

The value of a payments aggregator license lies in the ability it provides to companies to offer payment processing services to online retailers and e-commerce platforms. As intermediaries, these firms handle customer payments for merchants, pooling the funds before transferring them to the merchants within a set period.

The RBI's stringent criteria for obtaining a payments aggregator license reflects its cautious stance. Several applications have been declined due to non-compliance with these rigorous standards. Notably, applications from Instamojo, Paytm Payments Services, and Freecharge were returned, and these entities were advised to stop adding new merchants.

Decentro is known for its banking solutions via APIs tailored for neo-banks, marketplaces, and fintech companies. Juspay provides a broad payment gateway service, accommodating various payment modes like cards, wallets, and UPI. Zoho, distinguished as one of the few enterprise SaaS firms to receive a payments aggregator license, has solidified its position in both business software and payment solutions.

While recent approvals have been granted, several prominent firms are still in the queue. Pine Labs, Infibeam, PhonePe, and Easebuzz have received preliminary approvals but are awaiting full authorization. As of February 2024, the RBI is carefully reviewing applications from Cred and PayU, ensuring they meet all regulatory standards before issuing the license

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