New RBI Guidelines for Payment Aggregators
The Reserve Bank of India (RBI) has recently announced new guidelines for payment aggregators, which have come into effect immediately. This move is aimed at regulating the payment aggregation sector, which has grown significantly with the rise of digital transactions in India.
Under the newly issued directions, payment aggregators are categorized into three distinct types: PA-P for physical payment aggregators, PA-CB for cross-border payment aggregators, and PA-O for online payment aggregators. This classification will help streamline operations and ensure that each type adheres to specific regulations tailored to its function.
One of the most crucial aspects of these guidelines pertains to the financial requirements for non-banking entities. To obtain authorization to operate as a payment aggregator, a non-bank entity must have a minimum net worth of ₹15 crore at the time of application. Furthermore, they are required to achieve a minimum net worth of ₹25 crore by the end of the third financial year following the grant of authorization.
The RBI has also introduced provisions regarding fund management and escrow accounts, which are essential for ensuring the security of transactions. These measures aim to protect consumers and enhance confidence in digital payment systems. Additionally, cross-border limits for PA-CBs have been established to regulate international transactions more effectively.
Another significant aspect of the guidelines is the governance requirements for promoters of payment aggregators. The RBI has stipulated that these promoters must adhere to a 'fit and proper' criteria, ensuring that those in control of these entities are competent and trustworthy.
These guidelines come after the RBI released draft directions in April 2024 and have been finalized following feedback from various stakeholders in the industry. The RBI's proactive approach reflects its commitment to fostering a secure and reliable digital payment ecosystem in India.
In summary, the new RBI guidelines for payment aggregators are a vital step towards enhancing the regulatory framework of digital payments in India, ensuring that both consumers and businesses can engage in transactions with greater confidence and security.
