PayU Receives RBI’s In-Principle Approval as Payment Aggregator

In a significant development, PayU, the digital financial services provider, has obtained the coveted in-principle authorization from the Reserve Bank of India (RBI) to function as a Payments Aggregator (PA) under the Payment Settlements Act, 2007. This approval, after a year-long process, marks a pivotal moment for PayU’s operations in India.

Background and Regulatory Hurdles

Initially, PayU faced setbacks when the RBI rejected its application due to concerns regarding its intricate corporate structure. Consequently, the company had to halt the onboarding of new merchants for its online payment aggregation business, aligning with the central bank’s regulations aimed at tightening scrutiny in the payments sector.

Dedication to Compliance and Financial Inclusion

Anirban Mukherjee, the CEO of PayU, emphasized the significance of this approval, highlighting the company’s unwavering commitment to compliance and corporate governance. He expressed PayU’s dedication to driving digitization and financial inclusion, particularly focusing on small merchants, in alignment with the government’s Digital India initiative and the RBI’s progressive regulations.

Path Forward and Strategic Focus

Following this in-principle approval, PayU is poised to resume onboarding new merchants onto its platform. The company, which has already implemented substantial structural simplifications as recommended by the RBI, is now aiming to strengthen its position in the Indian market. With a base of over 500,000 merchants and operations spanning payments, credit, and PayTech, PayU is gearing up to tap into the consumer credit space, particularly targeting the young and increasingly affluent demographic.