RBI asks Razorpay to stop onboarding new merchants: Reports

Reserve Bank of India has asked Razorpay, Stripe to stop onboarding new merchants for their online businesses, said reports on Friday.

Razorpay and Stripe have been asked by RBI to stop onboarding new merchants, to fully comply with the payment aggregator guidelines required for the final leg of the licence.

Stripe, the California-headquartered payments firm, has been told to set up an escrow account within India, while Razorpay has been asked to submit a system audit report, reported Economic Times.

“We haven’t received any communications from the RBI asking us to pause onboarding. We look forward to continuing to operate in India and help Indian businesses process their payments, support their subscription business models, and combat fraud," a Stripe spokesperson told Business Today.

“As part of the process for the final authorisation of our PA/PG license for which we received the in-principle approval from RBI in July, we are now required to share additional details with RBI to aid in the final license process,” Razorpay said in a comment, reported Entrackr. “As part of this process, RBI has suggested us to temporarily withhold onboarding new online merchants till such details are submitted. As a responsible corporate that operates under the ambit of RBI, Razorpay has abided by the regulatory requirement.” The company’s existing merchant base won’t be impacted, it added. Razorpay has paused onboarding of new merchants since December 15.

The RBI has also asked payment services provider Cashfree to stop self-onboarding services for its new merchants, and asked it to step up its checks and balances, reported ET.

On Wednesday, RBI Governor Shaktikanta Das and senior RBI officials met with representatives from the fintech industry, and cautioned them to “pay close attention to governance, business conduct, data protection, customer centricity, regulatory compliance and risk mitigation frameworks".

Paytm had to reapply for a payment aggregator licence after its previous application was returned by the RBI.

Also read:

Also read: