3 Business Bag Payment Aggregator License
Bombay: The RBI gave approvals in principle to pine labs, Razorpay and Bandaged for a payment aggregator license. More than 160 operators have expressed interest in acquiring a license that will grant them regulatory recognition.
Currently, there are dozens of companies operating in the payment space. These entities are treated as service providers to RBI regulated entities. As payment aggregators take center stage with their innovations and drive customer acquisition, the central bank has moved to regulate the entities.
Pine Labs CEO B Amrish Rau confirmed the approval. “In India, online payment transactions reached 72 billion. It is important that this payment channel continues to develop steadily and securely. This step to provide payment aggregator/payment gateway license is welcome. We are happy to have received the main nod and credit it to our amazing tech stack,” said Rau.
Until now, payment companies have operated as agents for banks. The RBI regulates them through the banks they serve. Industry insiders say the regulator cannot ration licenses, but would use regulation to ensure there is no proliferation of companies, with everyone in the e-commerce industry creating its own captive payment business. Companies that are already operational but have not been licensed will end up being technology providers, with banks taking over the operations.
What is unclear is whether regulated entities will be given a broader role and be allowed to participate in payments and settlements independently. This is what happened in the AT M space where some of the management service companies have started providing white label ATMs.