Payment Aggregator License by RBI

A Payment Aggregator (PA) License is a regulatory approval granted by the Reserve Bank of India (RBI) to entities that facilitate online payment transactions between merchants and customers. The RBI Guidelines on Regulation of Payment Aggregators and Payment Gateways, 2020, mandate that all payment aggregators in India must obtain a license to operate legally. This article provides an overview of the PA license, eligibility criteria, application process, and compliance requirements.


What is a Payment Aggregator?

A Payment Aggregator (PA) is a service provider that enables merchants to accept various digital payment methods, including credit/debit cards, UPI, net banking, and wallets, without requiring them to set up individual payment integrations with each bank or payment network.


Who Needs a Payment Aggregator License?

Any business entity providing payment aggregation services must obtain RBI authorization. This includes:

  • E-commerce platforms that facilitate digital payments for merchants.

  • Fintech companies offering online payment solutions.

  • Marketplaces and service providers acting as intermediaries for transactions.

  • Payment service providers facilitating electronic transactions for multiple merchants.

Benefits of a Payment Aggregator License

  • Legal Compliance: Ensures adherence to RBI regulations.

  • Business Credibility: Enhances trust among merchants and customers.

  • Operational Efficiency: Streamlines digital payment processes.

  • Security Assurance: Ensures secure handling of payment transactions.

Eligibility Criteria for Payment Aggregator License

To obtain a PA license, an entity must meet the following conditions:

  1. Company Incorporation – The applicant must be registered as a private limited company or public limited company in India.

  2. Net Worth Requirement –

    • Existing PAs must have a minimum net worth of ₹15 crore by March 2021 and ₹25 crore by March 2023.

    • New PAs must have a net worth of at least ₹15 crore at the time of application, increasing to ₹25 crore within three years.

  3. Governance Framework – The entity must have a well-defined board structure and governance policies.

  4. Technology and Security Standards – Compliance with PCI-DSS and ISO 27001 security norms.

  5. Risk Management Measures – Implementation of fraud prevention mechanisms and customer grievance redressal.

Application Process for Payment Aggregator License

  1. Preparation of Application: The applicant submits the PA license application to RBI with all required documents.

  2. Document Submission: Essential documents include business incorporation details, net worth certificates, security policy frameworks, and compliance reports.

  3. Regulatory Review: RBI evaluates the application based on compliance, governance, and financial stability.

  4. Approval & Licensing: If all conditions are met, RBI grants the PA license to the entity.

Compliance Requirements for Payment Aggregators


After obtaining a license, payment aggregators must:

  • Adhere to Know Your Customer (KYC) and Anti-Money Laundering (AML) guidelines.

  • Maintain segregated escrow accounts to ensure timely merchant settlements.

  • Submit periodic compliance reports to RBI.

  • Implement robust cybersecurity measures.

Conclusion

A Payment Aggregator License is crucial for businesses facilitating online payments in India. With stringent RBI regulations in place, companies must ensure compliance to operate legally and build credibility in the financial ecosystem. Seeking professional consultation can help navigate the licensing process efficiently and meet all regulatory requirements.