PayU gets RBI's in-principle nod to operate as payment aggregator after a year-long wait

Prosus-backed PayU Payments has received Reserve Bank of India's in-principle approval to operate as a payment aggregator and onboard new merchants onto its platform.

The clearance comes after year-long wait. The central bank had turned down the firm's application citing complex corporate structure post which PayU had to pause onboarding new merchants for its online payment aggregation business.

Paytm, Razorpay and Cashfree had also faced a similar clampdown after RBI took steps to tighten scrutiny of the payments sector, asking online payment firms to monitor transactions-related activities of merchants on their platforms and ensure they meet fresh guidelines. Only PayU was in the waiting list since then.  

The RBI's approval is "a testament to our relentless focus on compliance and corporate governance", PayU CEO Anirban Mukherjee said in a statement.

"This license is pivotal in our mission to establish a globally renowned digital payment infrastructure rooted in India. Aligned with government's Digital India initiative and the RBI's forward-thinking regulations, we are dedicated to driving digitization and financial inclusion, particularly for small merchants".

PayU is a payment gateway that also offers services including buy-now-pay-later, and competes with the likes of Tiger Global-backed Razorpay and Walmart-owned PhonePe.