RBI formalises guidelines for regulating payment aggregators, gateways

The Reserve Bank of India on Tuesday released guidelines for regulating payment aggregators and payment gateways, nearly six months after it first proposed regulating these entities in a discussion paper. 

While the original discussion paper, which was released in September last year, suggested three ways to look at the issue- no regulation, light touch regulation or full regulation, the final guidelines seem to have favoured the third alternative. 

The new guidelines say that a payment aggregator (entities that facilitate e-commerce sites and merchants to accept various payment instruments) should be a company incorporated in India under the Companies Act, 1956 / 2013. 

It further says non-bank entities offering payment aggregator services will have tol apply for authorisation on or before June 30, 2021.

E-commerce marketplaces, according to the guidelines, providing payment aggregator services will have to be separated from the marketplace business and they will have to apply for authorisation on or before June 30, 2021. The biggest examples of this- PhonePe, a Flipkart company, and Paytm’s payment aggregator business are already separate entities from the marketplace models. 

It has also specified financial requirements for aggregators- payment aggregators existing today will have to achieve a net worth of ₹15 crore by March 31, 2021 and a net worth of ₹25 crore by the end of third financial year, which means or before March 31, 2023. The net-worth of ₹25 crore shall be maintained at all times thereafter. 

“We welcome the guidelines to regulate payment aggregators issued by the RBI. It’s good to see that entities handling funds of customers are only being proposed to be regulated unlike the original draft. Also the net worth requirements are also reduced and adequate time provided of one year to comply with Rs 15 crore net worth requirement for existing entities. Industry would continue to work with RBI closely for smoother transition of industry players from indirectly regulated to directly regulated and for overall vision of less cash society,” said Naveen Surya, Chairman Emeritus, Payments Council of India. 

Payment gateways, says the latest guidelines, will be considered as technology providers or outsourcing partners of banks or non-banks, as the case may be.