Two prominent payment processing companies, Razorpay and Cashfree, have secured the final approval from the Reserve Bank of India (RBI) to operate as Payment Aggregators (PAs). This development follows a period during which RBI had advised several players, including Razorpay, to pause onboarding new online payment merchants. The news of the final approval was shared by Cashfree in a LinkedIn post on December 19, expressing excitement about onboarding businesses on the Cashfree Payment Gateway. Razorpay also announced the approval, stating that it is now open to onboarding new businesses on its Payment Gateway platform.
The approval from RBI marks a significant milestone for these payment aggregators, and it comes after a year of the central bank pausing the onboarding process until the companies received the final nod for the PA license. PAs play a crucial role in enabling e-commerce sites and merchants to accept various payment instruments from customers without the need for merchants to create their payment systems. These entities handle payments from customers, pool them, and transfer the funds to the respective merchants.
Neobanking fintech Open has also received the final approval from RBI to operate as a Payment Aggregator. Expressing gratitude to RBI for the recognition, OPEN’s Co-founder & CEO, Anish Achuthan, highlighted the acknowledgment of the company’s dedication to regulatory standards and its commitment to serving small and medium-sized enterprises (SMEs).
This development is part of the broader context where RBI, in July 2022, issued in-principle approval to Pine Labs, Razorpay, and Stripe for the PA license. However, the final approval had been pending for over a year, and during this period, RBI advised several companies to halt onboarding new merchants until the final authorization was received.
RBI’s approach involved granting in-principle approval and requiring the companies to conduct an audit within the next six months to receive the final nod, aligning with the central bank’s procedures for all licenses. With this final approval, Razorpay and Cashfree are now poised to resume onboarding new customers and provide their industry-first payment solutions.
While these companies celebrate their achievements, other players in the sector, including Enkash and Paymentz, have also received the approval. However, notable names like PayTm, PayU, and JusPay are still awaiting RBI’s final nod.
The approval to operate as PAs signifies a renewed phase for these companies, allowing them to continue driving growth and maintaining their market leadership in the highly competitive payments space. As the payment processing landscape evolves, these companies will play a pivotal role in facilitating seamless transactions for businesses and customers alike.
