New Delhi, 17th April. The Reserve Bank issued draft guidelines on Tuesday to enhance regulations on payment aggregators, with the goal of strengthening the payment ecosystem.
The draft guidelines also address the physical point-of-sale operations of payment aggregators (PAs).
Given the rise in digital transactions and the important role PAs play, the proposed updates to the current guidelines cover aspects such as KYC and due diligence of merchants, operations in Escrow accounts, and are intended to enhance the payment ecosystem.
The payments ecosystem in India includes online PAs and PAs that facilitate face-to-face/proximity payment transactions.
Regarding KYC and due diligence, the draft specifies that payment aggregators must conduct due diligence on merchants they onboard in line with Customer Due Diligence (CDD) requirements outlined in the Master Directions on Know Your Customer (MD-KYC), 2016.
PAs must ensure that marketplaces they onboard do not handle funds for services not offered through their platform, as per the draft, which is open for comments until May 31, 2024.
For face-to-face/proximity payment transactions using cards, starting August 1, 2025, the draft stipulates that entities in the card transaction/payment chain, other than card issuers and/or card networks, cannot store Card-on-File (CoF) data.
Any previously stored data must be deleted, as per the draft.
Additionally, non-bank entities offering PA-P services must have a minimum net worth of ₹15 crore when applying for RBI authorization, and a minimum net worth of ₹25 crore by March 31, 2028.
This net worth of ₹25 crore must be maintained at all times thereafter.
