RBI directs Razorpay to stop onboarding new merchants

The Reserve Bank of India (RBI) has asked fintech giant Razorpay to pause onboarding of new online payment merchants as the central bank requires the company to make certain changes and provide more information before it is granted the final payment aggregator (PA) licence.

Razorpay is expected to submit a report to the RBI early next week and once that is approved, the company can continue onboarding new merchants. As part of the migration to a full PA licence, Razorpay will have to make some systematic upgrades and migrations to an escrow account from a nodal account, among a few other things.

Razorpay is among several fintech companies to receive in-principle approval from the RBI for a PA licence including Stripe, MSwipe, Innoviti and Pine Labs. As part of the payment aggregator framework formed by the RBI in March, only entities approved by the central bank can facilitate payments for merchants and other e-commerce sites.

The company’s spokesperson said, “We are now required to share additional details with RBI to aid in the final licence process. As a responsible corporate that operates under the ambit of RBI, Razorpay has abided by the regulatory requirement. We would like to emphasise that this has no impact on Razorpay’s existing business operations and current merchants. Razorpay’s operations are fully compliant with all regulatory guidelines and the company continues to be in touch with RBI for the next steps.”