Payment Aggregator vs Third-Party PA: Key Differences
Why in the news
IRCTC’s wholly-owned arm moved towards fintech; the platform now uses several outside aggregators plus its own gateway, iPay.
Key facts
- PA: enables merchants to accept cards, UPI and wallets; holds customer money in a nodal/escrow account and pays merchants later.
- Needs RBI authorisation under the Payment and Settlement Systems Act, 2007.
- Third-Party PA: supplies technology linking merchants to banks or gateways, never touching funds.
- No separate PA licence, yet RBI outsourcing and IT-security norms bind it.
Comparison
| Point | PA | Third-Party PA |
|---|---|---|
| Funds | Collects and settles | None handled |
| RBI authorisation | Mandatory | Not required |
| Escrow account | Must keep | Not applicable |
| Examples | Razorpay, PayU, BillDesk | Juspay (tech layer), Pine Labs as API only |
Exam angle
- Law: PSS Act, 2007.
- Deciding test: handling of funds.