After a wait of almost 15 months, the Reserve Bank of India (RBI) has given in-principle approval to process-backed fintech firm PayU to act as a payment aggregator (PA) and on-board new merchants. This principal approval is not a final license, but companies can operate through it for 6 to 12 months.
In January 2023, the banking regulator had returned the fintech firm's application to operate as a payment aggregator due to its complex corporate structure. He was instructed to apply again for this. Following the move, PayU had to stop adding new merchants for its online aggregation business.
A similar ban was imposed on Paytm, Razorpay and Cashfree, of which Razorpay and Cashfree had received approval in December last year. Money Control, quoting sources, has said that another fintech company CRED has also received RBI approval to work as a payment aggregator.
Payment aggregator is a third party service provider that enables customers to make online payments and merchants to accept payments. The payment aggregator facilitates payment through payment modes like debit card, credit card, cardless EMI, UPI, bank transfer and e-wallet.
PayU India had earned $ 399 million (about ₹ 3,323 crore) in the financial year 2022-23. This was 31% more than in the financial year 2021-22. At the same time, in the first half of the financial year 2023-24 (April 23-September 23), the company's income from core payment business increased by 15% to $ 211 million (about ₹ 1,757 crore).
