RBI Grants Payment Aggregator Licences to Juspay, Zoho, and Decentro

The Reserve Bank of India (RBI) has recently granted final authorization to fintech firms Juspay and Decentro, along with software-as-a-service company Zoho, to operate as payment aggregators. This approval comes in the wake of stringent criteria set by the regulator and positions these entities alongside other notable players in the payments aggregator landscape.

Payment Aggregator Licences to Juspay, Zoho, and Decentro: Key Points

1. Approval Recipients:

• Juspay, Decentro, and Zoho have secured the coveted payment aggregator licences from the RBI.
• They join established names such as Stripe, Zomato, and Tata Pay, who received approval in January, as well as leading fintech players like Razorpay and Cashfree, which acquired the license last year.

2. Operational Implications:

• Payment aggregator licenses empower companies to offer payment services to merchants, facilitating transactions between customers and businesses.
• These entities consolidate funds from customers and transfer them to merchants within specified time frames, enhancing the efficiency of online transactions.

3. Company Profiles:

• Decentro, backed by Y Combinator, specializes in enabling neo-banks, marketplaces, and fintechs to integrate banking solutions through its APIs.
• Juspay operates as a comprehensive payment gateway, facilitating card, wallet, and UPI-based transactions.
• Zoho stands out as one of the rare enterprise SaaS firms to secure the highly sought-after payments licence, showcasing its versatility in the digital payments landscape.

4. Regulatory Scrutiny:

• The RBI exercises caution in issuing payment aggregator licences, employing stringent eligibility criteria during the application process.
• Notable players like Instamojo, Paytm Payments Services, and Freecharge faced setbacks as their applications were returned for failing to meet the required standards, leading to a halt in new merchant onboarding.

5. Pending Approvals and Ongoing Processes:

• Several prominent entities, including PhonePe, Infibeam, Pine Labs, and Easebuzz, await the final nod after receiving in-principal approval.
• The applications of Cred (Dreamplug Paytech) and PayU remain under review as of February 2024, indicating ongoing developments in the payment aggregator ecosystem.