Razorpay, Cashfree receive final RBI nod for payment aggregator biz

Digital payment companies Razorpay and Cashfree Payments have received final approval from the Reserve Bank of India (RBI) to operate as payment aggregators, enabling the fintechs to onboard new merchants after a nearly one-year-old regulatory ban.

The companies said they secured a Payment Aggregator (PA) license from the regulator on Tuesday.

“The embargo to onboard new merchants has been lifted today. The company has received the Payment Aggregator (PA) license from the RBI. It will now onboard new merchants on its payment gateway,” a Cashfree Payments’ spokesperson told Business Standard.

In December last year, the RBI had asked Razorpay and Cashfree to stop onboarding new merchants.

“We are now open to onboard new businesses on our Payment Gateway platform! Razorpay has received the final authorisation from the Reserve Bank of India (RBI) to operate as a Payment Aggregator under the Payment Settlements Act, 2007. Having received the new PA license, we now restart onboarding new customers and are committed to serving them with our industry-first payment solutions,” a Razorpay spokesperson said.

Other players such as PayU, Paytm, JusPay, among others, are yet to receive a nod from the regulator to onboard new merchants.

Cashfree Payments said the company completed audits which were required to get the PA license around the first quarter of the ongoing financial year (Q1FY24). 

“In the past year, we have been working to get the license. The completion of the audit which was required to get the final license took a few months. These audits were completed around April-May this year,” Akash Sinha, co-founder and CEO, Cashfree Payments, told Business Standard. 

Sinha said the company has over 12,000-15,000 KYC (Know Your Customer) ready merchants on the platform who are ready to go live. 

“Last year, we were getting around 30,000 leads every month. The upcoming year, the numbers will be higher than that. We have also been launching new products in the market,” he added. 

The RBI defines PAs as entities which facilitate e-commerce sites and merchants to accept various payment instruments from the customers for the completion of their payment obligations without the need for merchants to create a separate payment integration system of their own.

PAs enable merchants to connect with acquirers. They are able to receive payments from customers, pool them, and transfer them onto the merchants after a time period, according to the regulator.