RBI Grants In-Principle Approval to Paytm Payments Services as Online Payment Aggregator

The Reserve Bank of India (RBI) has granted Paytm Payments Services Ltd (PPSL), a wholly-owned subsidiary of One 97 Communications Ltd, an in-principle approval to operate as an online payment aggregator. This lifts earlier restrictions and allows the company to onboard new merchants.

What is a Payment Aggregator (PA)?

• A Payment Aggregator is a service provider that allows merchants to accept digital payments (credit/debit cards, UPI, net banking, wallets) without creating their own direct relationship with banks.
• The PA collects payments from customers and settles them to the merchant’s account.
• Example: Razorpay, PayU, CCAvenue, Paytm Payments Services.

RBI Norms for Becoming a Payment Aggregator

Eligibility & Licensing

• Must be a company registered in India under the Companies Act.
• Requires RBI authorisation under the Payment and Settlement Systems Act, 2007.

Capital Requirements

• Minimum net worth:
  • ₹15 crore at the time of application.
  • Must increase to ₹25 crore by the end of the third financial year.

Operations & Compliance

• Must park customer funds in an escrow account with a scheduled commercial bank.
• Mandatory KYC of merchants before onboarding.
• Must follow data security standards like PCI-DSS for handling card data.
• Clear dispute resolution & refund timelines.
• Regular reporting to RBI on transactions and security compliance.

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