RBI grants payment aggregator licenses to Zoho, Juspay, and Decentro
The Reserve Bank of India (RBI) granted final authorization to fintech companies Juspay and Decentro, as well as software-as-a-service firm Zoho, to operate as payment aggregators (PAs). This approval allows these businesses to join the ranks of Stripe, Zomato, and Tata Pay, which received the regulator's green light in January. Razorpay and Cashfree had already secured their licenses last year.
Role of payment aggregators and company profiles
A PA license allows companies to offer payment services to merchants by accepting various payment instruments from customers. PAs collect funds from customers and transfer them to merchants after a specific time frame. Decentro, supported by Y Combinator, enables neo-banks, marketplaces, and fintechs to integrate banking solutions through its APIs. Juspay serves as a full-stack payment gateway, facilitating card, wallet, and UPI-based transactions. Zoho is one of the few enterprise SaaS firms to obtain the highly anticipated payments license.
RBI's cautious approach in issuing PA licenses and pending applications
The RBI has been cautious in issuing PA licenses and follows a strict criteria. Instamojo, Paytm Payments Services, and Freecharge were among several applicants whose submissions were returned due to unmet eligibility requirements and were instructed to stop new merchant onboarding. Fintech giants PhonePe, Infibeam, Pine Labs and Easebuzz are still awaiting final approval after receiving in-principal approval. Meanwhile, applications from CRED (Dreamplug Paytech) and PayU are still being processed as of February 2024 data.
