RBI issued Draft Guidelines on Regulation of Payment Aggregators

The Reserve Bank of India (RBI) issued draft guidelines to improve rules on payment aggregators with the aim of expanding the payment ecosystem on Tuesday.

The draft guidelines also address the physical point of sale activities of payment aggregators (PAs).

The RBI stated that provided the growth in digital transactions and the significant role that PAs play in this space, the current PA directions are proposed to be updated to include, among other things, merchant KYC and due diligence, Escrow account operations, and measures to strengthen the payment ecosystem.

In India, the payments ecosystem includes both online PAs and PAs that allow for face-to-face/proximity payment transactions.

Regarding KYC and due diligence, the draft stated that payment aggregators should conduct due diligence on merchants onboarded by them in accordance with the Customer Due Diligence (CDD) requirements outlined in the Master Directions on Know Your Customer (MD-KYC), 2016.

“PAs will guarantee that marketplaces onboarded by them do not collect and settle funds for services not offered through their platform,” according to the draft, on which the RBI has requested feedback by May 31, 2024.

The proposal states that beginning August 1, 2025, no entity in the card transaction/payment chain, other than card issuers and/or card networks, shall store Card-on-File (CoF) data.

“Any such data that was previously saved shall be purged,” the draft stated.

The draft requires non-banks offering PA-P services to have a minimum net worth of Rs.15 crore when applying to the RBI for authorization and a net worth of a minimum of Rs.25 crore by March 31, 2028.

For draft Guidelines Download PDF Given Below: