RBI asks PayU to re-apply for payment aggregator licence; company pauses new merchant onboarding

The Reserve Bank of India (RBI) has instructed online payment solutions firm PayU to simplify its corporate structure and reapply for its initial payment aggregator (PA) licence.

"We have received feedback from RBI on our PA application. We will work with them over the next 120 days to address some aspects and to resubmit our application. One of the key aspects is the simplification of our corporate structure and we are already quite well progressed with some suggested solutions,” a company spokesperson said in a statement.

The company said it will pause on-boarding of new merchants for online PA business and that the decision will have no impact on its existing online merchants to whom services will continue as usual.

“Other businesses of PayU Payments including offline and BBPS (Bharat Bill Payment System) are not impacted and can continue as usual and new merchants can be on-boarded," the statement said.

According to RBI, PAs are entities that facilitate e-commerce sites and merchants to accept various payment instruments from the customers without the need for merchants to create a separate payment integration system of their own. PAs facilitate merchants to connect with acquirers. In the process, they receive payments from customers, pool and transfer them on to the merchants after a time period.

Spending management platform EnKash, payment solutions provider, Hitachi Payment Services, and fintech unicorn BharatPe received in-principle authorisation from the central bank to operate as an online payment aggregator this week.

Several other firms, including PineLabs, Infibeam Avenues, Cashfree, Stripe, Razorpay, 1Pay, MSwipe and Innoviti Payments had received the licence earlier.

Nalin Negi, interim CEO of BharatPe said the in-principle approval will help the company put together and execute expansion plans as well as reach out to more under banked merchants. The final authorisation is subject to a couple of conditions which the fintech major will now focus on fulfilling.

EnKash said the license will enable the company to broaden its product offerings to more businesses. “This (licence) will help EnKash offer innovative  products and solutions not only to our existing  business ecosystem but also to bring about path breaking and leading technological solutions  to the market covering the entire payments flow,” Yadvendra Tyagi, Co-Founder, EnKash, said in a statement.
 

Also read: RBI grants payment aggregator license to Hitachi Payment Services

Also read: RBI authorises BharatPe to operate as an online payment aggregator