PayU Gets RBI Payment Aggregator Authorisation
Why in the news
Fintech firm PayU won the RBI’s integrated authorisation to work as a payment aggregator, covering online, in-store and cross-border flows, both inward and outward.
About payment aggregators
- A payment aggregator (PA) collects money from customers on a merchant’s behalf through cards, UPI, wallets or net banking and passes it on after deducting fees.
- Pools payments from many customers and channels into a single settlement.
- Handles fraud monitoring and regulatory compliance; merchants need no separate tie-ups with banks or networks.
- Pays out collected funds to the merchant’s account periodically.
RBI guidelines on PAs and Payment Gateways (July 2021)
| Area | Requirement |
|---|---|
| Incorporation | Indian company under the Companies Act, 2013; foreign entities cannot operate directly |
| Net worth | ₹15 crore initially for new PAs; RBI may ask for more as business scales |
| Authorisation | RBI approval before starting; only authorised PAs may handle payment instruments and collect merchant funds |
| Fit and proper | Promoters, directors and key managers must show integrity, competence and a clean record |
| Governance | Board-approved policies on operational risk, fraud, IT security, cyber risk, data protection and grievances |
| Funds | Customer money cannot fund the PA’s own business; keep it in a trust account and remit on RBI timelines |
| Operations | KYC and AML/CFT compliance, transaction records, risk assessments |
| Capital and insurance | Adequate capital buffers; possible cover for operational or cyber risk |
| Technology | End-to-end encryption, tokenisation, PCI DSS for cards, regular audits and penetration tests |
Exam angle
- Regulator: RBI; guidelines year: July 2021.
- Minimum initial net worth: ₹15 crore.
- Related terms: trust account, tokenisation, PCI DSS, KYC, AML/CFT.