The Reserve Bank of India (RBI) has released guidelines for regulating activities of Payment Aggregators (PAs) and Payment Gateways (PGs) in the country.
More about the regulations
- Banks provides Payment Aggregators (PA) services as part of their normal banking relationship and do not therefore require a separate authorization from RBI.
- Non-bank PAs shall require authorization from RBI under the Payment and Settlement Systems Act, 2007 (PSSA).
- PA shall be a company incorporated in India under the Companies Act, 1956 / 2013.
- E-commerce marketplaces providing PA services shall be separated from the marketplace business and they shall apply for authorization on or before June 30, 2021.
- Existing PAs have to achieve a net worth of ₹15 crore by 31st March, 2021 and a net worth of ₹25 crore on or before 31st March, 2023.
- New PAs should have a minimum net worth of ₹15 crore at the time of application for authorization and have to attain a net worth of ₹25 crore by the end of the third financial year of the grant of authorization.
Payment Aggregators (PA)
- PAs 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.
- PAs facilitate merchants to connect with acquirers.
- In the process, they receive payments from customers, pool and transfer them on to the merchants after a time period.
- Examples: PayPal, Google Checkout, and Amazon Payments
Payment Gateways (PG)
- PGs are entities that provide technology infrastructure to route and facilitate processing of an online payment transaction without any involvement in handling of funds.
- In simple terms, gateways are the online equivalent to card terminals used in bricks and mortar establishments.
- Without an online payment gateway, payment transactions cannot be accepted on an ecommerce site.
- Examples of Payment Gateways: In India, only Banks take up the responsibility to act as Gateways such as HDFC, AXIS, and UBI etc.
Note:
- A payment Aggregator covers a payment gateway in its ambit whereas it’s not necessary that an aggregator act as a specific gateway.
- A Payment Gateway will allow the merchants to deal in a specific payment option put on the portal, whereas a Payment Aggregator allows you to have, multitudes of options for payment & leaves no stone unturned in fetching payment from the customer towards the vendor.
No comments