RBI Releases Draft Guidelines on Payment Aggregator

In an effort to improve rules on payment aggregators and strengthen the payment ecosystem, the Reserve Bank released draft guidelines. The physical point-of-sale operations of payment aggregators (PAs) are also included in the draft.

The RBI stated that the current directions on PAs are proposed to be updated and cover, among other things, merchant KYC and due diligence, operations in Escrow accounts, and intended to strengthen the payment ecosystem.

In India, the payments ecosystem involves online PAs and PAs, which facilitate face-to-face/proximity payment transactions.

The draft suggests that payment aggregators must conduct the due diligence of the onboarded merchants in accordance with Customer Due Diligence (CDD) prescribed in Master Directions on Know Your Customer (MD-KYC), 2016.

"PAs shall ensure that marketplaces onboarded by them do not collect and settle funds for services not offered through their platform," said the draft on which the RBI has invited comments by May 31, 2024.

The draft also said that from August 1, 2025, in face-to-face/proximity payment transactions done using cards, no entity apart from the card issuers and/or card networks, shall store the Card-on-File (CoF) data.

"Any such data stored previously shall be purged," the draft added.

The draft further said non-banks providing PA-P services should have a minimum networth of ₹ 15 crore at the time of submitting an application to the RBI for authorisation and a minimum networth of ₹ 25 crore by March 31, 2028.

The net worth of ₹ 25 crore shall be maintained at all times thereafter.