The Reserve Bank of India (RBI) has introduced draft guidelines aimed at enhancing regulations on payment aggregators (PAs), marking a significant step towards fortifying the payment ecosystem.Incorporating Physical Point-of-Sale ActivitiesThe draft guidelines extend to encompass the physical point-of-sale activities of payment aggregators, recognising their growing significance in facilitating transactions.Enhancing Regulatory FrameworkGiven the surge in digital transactions and the pivotal role played by PAs, the proposed directions seek to update existing regulations. Key areas addressed include Know Your Customer (KYC) and due diligence of merchants, operations in Escrow accounts, and overall ecosystem fortification.Emphasis on KYC and Due DiligenceUnder the draft guidelines, payment aggregators are mandated to conduct thorough due diligence of onboarded merchants in alignment with prescribed Customer Due Diligence (CDD) norms outlined in the Master Directions on Know Your Customer (MD-KYC), 2016.Marketplace OversightPAs are required to ensure that marketplaces onboarded by them strictly adhere to collecting and settling funds solely for services offered through their platforms, fostering transparency and accountability.Stricter Data Handling ProtocolsEffective from August 1, 2025, entities involved in face-to-face/proximity card payment transactions, excluding card issuers and networks, are prohibited from storing Card-on-File (CoF) data. Any existing stored data must be promptly purged.Financial Requirements for Non-Bank EntitiesNon-bank entities offering Payment Aggregator-Payments (PA-P) services must maintain a minimum net worth of ₹15 crore upon application submission for RBI authorisation. This requirement increases to ₹25 crore by March 31, 2028, with the stipulation to maintain this net worth continuously thereafter.The proposed guidelines signify a concerted effort by the RBI to bolster the regulatory framework governing payment aggregators, underscoring the importance of transparency, security, and accountability in Indias evolving payment landscape. Stakeholders are invited to provide feedback on the draft guidelines until May 31, 2024, before their formal implementation.
