On March 17, 2020, RBI issued Guidelines on Regulation of Payment Aggregators and Payment Gateways (“Guidelines”) that came into effect from April 1, 2020.
In terms of the Guidelines, Payment Aggregators (“PA”) are entities that facilitate e-commerce sites and merchants to accept various payment instruments from the customers for completion of their payment obligations without the need for merchants to create a separate payment integration system of their own.
Non-Bank PAs Need RBI Authorization: These PAs should be a company incorporated under the Companies Act, and could be either bank entities or non-bank entities. The existing non-bank entities offering PA services are required to apply for authorization to RBI on or before June 30, 2021. The banks are not required to seek any authorization for these services.
Net Worth Requirements: The Guidelines lay down the net worth requirements for the PA. Existing PA will have to achieve a net worth of Rs. 15 crores by March 31, 2021 and a net worth of Rs. 25 crores on or before March 31, 2023. New PA, on the other hand, should have a minimum net-worth of Rs.15 crore at the time of application and shall attain a net-worth of Rs.25 crore by the end of third financial year from grant of authorisation.
PAs to follow PMLA: The Guidelines require the PA to follow the KYC norms and obligations under the Prevention of Money Laundering Act, 2002.
Grievance Redressal Mechanism: RBI has asked the PA to establish a consumer grievance redressal and dispute mechanism framework including appointment of a Nodal Officer for handling consumer grievances.
This post has been contributed by Ms. Vaneesa Agrawal.
[DISCLAIMER: This article is for academic purpose and is solely to provide readers with general information regarding developments in Indian law. The information contained herein does not constitute legal or a professional advice.]