RBI’s Master Direction on Regulation of Payment Aggregators
Reserve Bank of India (RBI) recently issued a comprehensive Master Direction on the regulation of Payment Aggregators (PAs), consolidating earlier guidelines and new regulatory measures for online, offline and cross-border payment aggregation businesses. According to the RBI, the move aims to streamline compliance, ensure customer protection, and enhance the oversight of entities handling large volumes of digital transactions. The directive applies to all payment system providers, system participants, authorised dealer banks, and scheduled commercial banks.
RBI has formalised the payment aggregators into several groups to regulate their specific activities. For instance, the PA-Online facility will regulate aggregators facilitating e-commerce transactions and other online payments. The PA- Physical will facilitate transactions where both the acceptance device and payment instrument are physically present in proximity. Further, PA-Cross-Border will enable specific rules for aggregators that handle cross-border transactions.
Drawing a clear distinction between banks and non-banks, the new master directions allow banks to continue running their PA businesses without fresh approval. However, non-bank players, which include all startups, will have to apply for fresh authorisation by December 31. Those failing to comply with the norms will have to wind up their operations by February 28, 2026.
