Razorpay and Cashfree have been approved by RBI to act as payment aggregators.

The Reserve Bank of India (RBI) has granted final permission for payment processing giants Razorpay and Cashfree to function as Payment Aggregators (PA).

"The Reserve Bank of India (RBI) has granted us final permission to function as a payment aggregator. On December 19, Cashfree posted on LinkedIn, saying, "We are excited to announce that we are now onboarding businesses on Cashfree Payment Gateway."

On December 16, 2022, Moneycontrol was the first to report that, following an RBI advisory, Razorpay and other players had stopped onboarding online payment merchants.

We are currently accepting new companies to join our Payment Gateway platform. In an official statement to Moneycontrol, Razorpay stated that it has now obtained the last permission from the Reserve Bank of India (RBI) to function as a Payment Aggregator (PA) in accordance with the Payment Settlements Act, 2007.

The RBI has also given Neobanking Fintech Open final permission to operate as a payment aggregator.

"This approval not only certifies our adherence to regulatory standards but also marks a major advancement in strengthening our support for small and medium-sized enterprises...Cofounder and CEO of OPEN, Anish Achuthan, expressed gratitude to the RBI for recognizing and evaluating their contribution in a media statement.

The action is a result of the RBI's one-year suspension of Razorpay, Cashfree, and Stripe's onboarding of new merchants pending the issuance of their PA licenses.

PAs are organizations that let e-commerce sites and retailers accept different payment methods from clients in order to fulfill their payment obligations without requiring the retailers to set up their own systems. After receiving payments from clients, PAs combine them and send them to the retailers.

 

Sources claim that PayTm, PayU, and JusPay are still awaiting the RBI's final approval, while others, such as Enkash and Paymentz, have already received approval.

Pine Labs, Razorpay, and American payments company Stripe were the first parties to obtain the PA license's in-principle approval in July 2022. However, the RBI took more than a year to grant the final approval.

According to RBI, an in-principle clearance has been given; however, in accordance with RBI's protocol for all licenses, the companies must carry out an audit within the next six months in order to receive a final nod.

Industry sources predicted that the RBI's notice to payment processing companies would be detrimental to businesses, given the increasing number of payment gateway operators vying for a share of the payment services provided to major corporations.

"We are dedicated to providing our industry-leading payment solutions to new customers, and we have resumed onboarding them since obtaining the new PA license. According to Razorpay's statement, "We are thrilled to be among the first Payment Gateways to have obtained the final PA license from RBI."

"New merchants are currently being added to our payment gateway. A representative for Cashfree said in a media statement, "We are extremely excited about this new phase of our journey, where we continue to drive exponential growth and retain our market leadership as the preferred aggregator in the payments space."