Source: BS
Context:
Fintech firm Easebuzz has been authorised by the Reserve Bank of India (RBI) to operate as a full-service payment aggregator (PA), enabling online, offline, and cross-border payment services for merchants across India.
What is a Payment Aggregator (PA)?
A Payment Aggregator (PA) is a financial entity that facilitates digital payments for merchants by collecting and processing payments from multiple payment instruments (like credit/debit cards, UPI, net banking, wallets) without the merchant having to set up individual arrangements with each bank or payment method.
They act as intermediaries between customers, banks, and merchants, simplifying online and offline transactions.
Key Features
- Single Integration: Merchants integrate once with the PA instead of multiple banks or payment methods.
- Multi-Channel Payments: Supports online (e-commerce), offline (PoS, UPI soundbox), and cross-border transactions.
- Settlement to Merchant: Collects payments from customers and settles them in the merchant’s account after deducting fees.
- Compliance & Security: Licensed by the Reserve Bank of India (RBI) to ensure KYC, AML, and regulatory compliance.
Types of PAs
- Full-Service PA: Handles online, offline, and cross-border payments.
- PA-P (Physical): Focuses on offline transactions, where the payment device (PoS, soundbox) and payment instrument are physically present.
- Cross-Border PA: Specialized in international transactions, enabling merchants to receive foreign payments.
RBI Eligibility Criteria for Payment Aggregators (PAs)
- Entity: Must be an Indian company (foreign firms cannot directly operate).
- Net Worth: Minimum ₹15 crore for new PAs; may increase with scale.
- Fit & Proper: Promoters, directors, and key personnel must meet RBI standards.
- Governance & Risk: Strong internal controls, AML/KYC compliance, cybersecurity, and grievance redressal.
- Operational: Segregate customer funds, maintain settlement accounts, ensure transaction tracking.
- Regulatory: Obtain RBI authorisation; report transaction and compliance data periodically.
- Other: No holding of customer funds beyond settlement; due diligence on merchants and TSPs.
