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Mumbai: The Reserve Bank of India (RBI) might bring payment gateways and payment aggregators under its direct supervision, according to a discussion paper of the central bank.

The discussion paper on ‘Guidelines for Payment Gateways and Payment Aggregators’ suggested that payment gateways and payment aggregators be authorised under the Payment and Settlement Systems Act, 2007 (PSSA). The paper said these entities are a critical link in the transaction flow and there is a case to regulate activities and these fall within the ambit of PSSA.

“Sufficient time, of say one year, may be given to the existing market participants to achieve compliance with the required capitalisation norms. They shall adhere to the regulations from the date of issue of the regulations or as specified therein. Further, the authorised Payment Gateways and Payment Aggregators shall also, if required, maintain the funds received from customers in an escrow account with a scheduled commercial bank," it said.

In its Monetary Policy Statement for 2018-19 on 7 February, RBI had indicated that the existing guidelines for payment intermediaries would be reviewed.

Payment aggregators and gateways provide technology infrastructure to route and facilitate processing of an online payment transaction and perform other functions without actually handling the funds. They also facilitate e-commerce sites and merchants to accept various payment instruments from the customers for completion of their payment obligations to the merchants without the need for merchants to create a separate payment integration system of their own.

If they come under direct supervision, the discussion paper said, they should have minimum net-worth as prescribed for Bharat Bill Payment Operating Unit (BBPOUs) (currently 100 crore) to be maintained at all times.

“Existing payment aggregators shall, within one year after the issuance of guidelines by RBI, comply with this net-worth requirement. Entities not able to comply with the net-worth requirement within the stipulated time frame, need not apply for authorisation but shall wind-up payment aggregation business within one year of issuance of guidelines," it said.

ABOUT THE AUTHOR
Shayan Ghosh
Shayan Ghosh is a national writer at Mint reporting on traditional banks and shadow banks. He has over a decade of experience in financial journalism. Based in Mint’s Mumbai bureau since 2018, he tracks interest rate movements and its impact on companies and the broader economy. His interests also include the distressed debt market, especially as India’s bankruptcy law attempts recoveries of billions worth of toxic assets.
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