The Reserve Bank of India (RBI) has unveiled regulations for payment aggregators, marking a significant shift in the regulatory framework governing fintech and Point of Sale (PoS) operators. Aligned with the RBI guidelines, these regulations are set to impact the business models and operations of stakeholders in the payment aggregator ecosystem.
Potential Impact on Fintech and PoS Operators
Experts have emphasised the potential impact of the RBI rules and regulations on fintech and PoS operators, who will now fall under the purview of these rules. The proposed payment aggregator guidelines, such as restrictions on transaction data storage and increased compliance requirements, have raised concerns about their implications for payment gateways and fintech companies.
Minimum Net Worth Requirements and Compliance Timelines
The RBI guidelines include minimum net worth requirements and compliance timelines for entities handling physical PoS services. Banks offering physical payment aggregator services must ensure compliance within three months, while non-bank entities must notify the RBI of their intent to seek authorisation within 60 days.
Net Worth Requirements for Entities
Non-bank entities seeking licenses for physical payment aggregator services must maintain a minimum net worth of Rs 15 crore at application submission. By March 31, 2028, existing non-bank entities in this space must have a net worth of Rs 25 crore and maintain it afterwards. Those unable to meet the net worth requirements must cease their services by July 31, 2025.
KYC and Governance Updates
The RBI guidelines have updated specific directions regarding payment aggregators, focusing on areas such as know-your-customer (KYC), due diligence of merchants, and operations in escrow accounts. These updates reflect the growing significance of digital transactions and emphasise the importance of governance and adherence to regulatory standards.
Conclusion
The RBI’s proposed regulations for payment aggregators represent a significant step towards enhancing transparency, security, and governance in the digital payments ecosystem. While aimed at strengthening consumer protection and reducing systemic risks, these regulations pose challenges for stakeholders regarding compliance and financial requirements. As the industry adapts to these changes, collaboration and innovation will be essential for navigating the evolving regulatory landscape.
FAQs
1. What are the key provisions in the RBI’s draft circular for payment aggregators?
Ans: The key provisions include restrictions on transaction data storage, increased compliance requirements, and minimum net worth requirements.
2. How will the proposed regulations impact fintech and PoS operators?
Ans: The rules could affect their business models and operational costs due to heightened compliance requirements and financial thresholds.
3. What are the compliance timelines for entities offering physical payment aggregator services?
Ans: Banks must comply within three months, while non-bank entities must notify the RBI within 60 days.
4. What are the net worth requirements for entities seeking physical payment aggregator services licenses?
Ans: They must maintain a minimum net worth of Rs 15 crore at the time of application submission, increasing to Rs 25 crore by March 31, 2028.
5. What updates have been made regarding KYC and governance for payment aggregators?
Ans: The RBI has issued updates on KYC, due diligence of merchants, and operational guidelines to align with the evolving digital payments landscape.
