Context:
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.
