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RBI Tightens Guidelines for Payment Aggregators
What’s the News?
- The Reserve Bank of India (RBI) has issued the Payment Aggregators Directions, 2025.
- The rules apply immediately, especially for non-bank payment aggregators.
- The aim is to improve consumer protection, reduce fraud, tighten governance, ensure data security, and regulate cross-border and offline/online transactions better.
Key Provisions & Impacts
- Classification of Aggregators
- PA-O: Online aggregators.
- PA-P: Physical/offline aggregators.
- PA-CB: Cross-border aggregators.
- Net Worth & Authorisation
- Non-bank aggregators must have ₹15 crore net worth at application time.
- This must rise to ₹25 crore by the end of third financial year after authorisation.
- Banks are exempt from seeking separate authorisation to operate as PAs.
- Governance, Risk & Fraud Prevention
- Mandatory board-approved dispute resolution policy with defined refund timelines.
- Strong data security, fraud detection/prevention systems.
- Merchant background checks, KYC requirements.
- Escrow & Fund Management
- Funds collected by PAs must go into escrow accounts with scheduled commercial banks
- Separation of aggregator’s own funds from merchant funds.
- Cross-Border and Transaction Limits
- PA-CBs (cross-border) have specific rules on transaction flows and fund segregation.
- No PA can impose transaction-amount limits on specific modes; issuing bank will decide based on customer credit/spending.
- Other Operational Norms
- Authentication standards tightened: e.g. ATM PIN cannot be used as authentication factor for card-not-present transactions.
- Continuous maintenance of net worth and compliance obligations.