The Payment Aggregator Framework: What the RBI Requires
The Reserve Bank of India (RBI) first introduced a formal licensing framework for payment aggregators (PAs) in India in 2020. Through Payment Aggregator Framework, these rules apply to non-bank entities that collect payments on behalf of merchants — such as cards, UPI, wallets or other instruments. The rules aim to protect merchant funds, ensure safe flows and limit systemic risk in the payments system.
Key requirements include: a minimum net worth (initially ₹15 crore, rising to ₹25 crore), escrow account structures for merchant funds, strong KYC and AML controls, and segregation of merchant-money from own capital. According to a recent update, aggregators must also implement annual CERT-In audits and keep user payment data in tokenised or localised form.
Another important dimension is authorisation. PAs must apply to the RBI under Section 7 of the PSS Act, 2007, submit details of ownership, systems, governance, and merchant onboarding process. Until final approval is granted, new merchant onboarding is often restricted. }
Insight: A PA licence is no longer a bureaucratic formality — it’s a strategic asset for India’s digital commerce infrastructure.Who Has Already Got the Nod — and Who’s Waiting
Several firms have already secured in-principle or full authorisation from RBI. According to industry sources, major players such as Razorpay Software Pvt Ltd, Cashfree Payments India Pvt. Ltd. and several others received licences while others such as One97 Communications (via its subsidiary) and PayU Payments Pvt. Ltd. continue to await final clearance.
According to a March 2023 list by RBI, 32 entities received in-principle approval. Since then, the approval process has slowed, making the licence increasingly scarce and coveted. A 2025 industry note described PA licences as “India’s next fight club” — where scale, data access and merchant reach become strategic battlegrounds.
Among those waiting, firms with strong merchant-acquiring business, deep fintech-tech stacks and robust governance are best positioned. Smaller players or niche fintechs may find themselves squeezed as number of approved slots remains limited.
What Firms Should Prepare: Criteria for the Next Round
If your firm is eyeing the next wave of PA licences, readiness matters. Through Rbi Pa Authorisation, here are key areas to focus on:
- Governance & Ownership Clean-Up: RBI emphasises transparent ownership, no adverse history, clean foreign-investment compliance and board oversight.
- Capital & Escrow Readiness: Meeting net-worth milestones (₹25 crore by FY 26) and building escrow account links with banks that separate merchant funds from operational funds.
- Technology & Fraud Controls: Tokenisation, local data storage, real-time fraud detection, and CERT-In audit readiness are table-stakes.
- Merchant Network & Scale: Firms with large merchant onboarding, deep Tier-2/3 reach, or embedded finance plays (e.g., Merchant Acquiring Ecosystem) often get preference.
- Compliance Track Record: Platforms must show they have managed merchant funds responsibly, handled disputes, and implemented grievance-redressal frameworks. Weak track records slow approval.
Why These Licences Matter for India’s Fintech Future
The strategic importance of PA licences goes beyond regulatory compliance. Through Fintech Scale Strategies, they shape how India’s digital commerce ecosystem evolves.
Firstly, a PA licence affords merchant onboarding rights, data flows and routing control — important in a world where payments, data, and commerce converge. Firms without licence may be shut out of key segments.
Secondly, licence scarcity drives competitive advantage. When only 60–70 approved aggregators may dominate, those firms gain bargaining power over merchants, pricing (MDR) and access to data — raising systemic importance and scrutiny.
Thirdly, for India’s “digital export” ambitions, licensed aggregators can scale cross-border payments, integrate into global rails, and anchor India’s fintech standards abroad. The PA licence becomes both domestic credential and international leverage point.
For merchants in Tier-2/3 India, the implication is clear: select platforms that are RBI authorised today. Using unlicensed aggregators is a risk to reliability, continuity and compliance. According to lists compiled in August 2025, several aggregators still appear on “under process” status.
Insight: Payment aggregator licences aren’t just paperwork — they determine who builds the rails of India’s digital economy.In summary, the next wave of PA licences in India will be tightly contested. Firms that have prepared capital, governance, tech and scale will move forward. Others risk being left behind as India’s digital payments ecosystem consolidates. For merchants and fintechs alike, staying aligned to authorised platforms isn’t just wise — it’s essential.
The future of India’s digital payments isn’t just about apps — it’s about who holds the credential to power commerce.
Frequently Asked Questions
1. What is a payment aggregator licence in India?
It is the authorisation from RBI for non-bank entities to collect payments on behalf of merchants digitally or physically, under escrow, compliance and governance norms.
2. Why is getting a PA licence difficult now?
Because only a limited number of firms have been approved so far, the criteria have sharpened, and the licence is viewed as a strategic gate to merchant and data flows.
3. What firms are waiting for approval?
Large fintechs with heavy merchant volumes such as those behind Paytm and PayU remain in queue, while newer players with clean structure are making headway.
4. How do merchants choose a payment aggregator now?
Merchants should verify the aggregator is RBI-authorised, check escrow account set-up, tech reliability, settlement timelines and grievance redressal before onboarding.
5. How will PA licences affect India’s fintech ecosystem in future?
They will determine which firms dominate merchant acquiring, data access, payments infrastructure and global fintech exports — shaping who wins in India’s payments economy.