Skip to content
Free updates Login
SSCBankingNABARD / RBI

P2PM UPI Merchant Payments: RBI Clarifies No PA Licence Needed

28 February 20261 min read
BANKING & FINANCEP2PM UPI MerchantPayments: RBIClarifies No PALicence Needed28 February 2026safalsetu.com

Why in the news

RBI eased compliance for fintechs such as PhonePe and Paytm serving small unorganised merchants.

Clarifications

  • Funds go directly from customer to merchant account, with no pooling.
  • Acquiring banks or payee PSPs carry due diligence duty.
  • Pure infrastructure providers count as technology service providers.
FeatureP2PMP2M
Money flowDirect bank-to-bankVia licensed aggregators
SettlementStraight to merchantEscrow accounts

Background

  • Users: street vendors, gig workers; many QR and soundbox networks.
  • High volumes, yet under 20% of total value.

Test yourself

1. According to RBI's clarification, P2PM UPI transactions are outside the scope of which directions?

P2PM transactions are outside the Master Directions on Payment Aggregators (MD-PA).

2. In which year did NPCI introduce the P2PM category?

The P2PM category was introduced by NPCI in 2019.

3. How are firms providing only technical infrastructure for P2PM payments treated by RBI?

They are treated as technology service providers, not payment aggregators.

This topic is part of Daily Current Affairs 27 February 2026 (25 topics).

All topics of the dayDay quizFebruary 2026

Read more