RBI plans to implement uniform licensing for online and offline payment aggregators

Aug 28, 2024

Synopsis
The Reserve Bank of India will streamline its licensing process for payment aggregators by merging requirements for online and offline entities. This unified license aims to facilitate seamless operations across both domains. The RBI stresses the need for secure transactions and plans to integrate Aadhaar-enabled Payment Systems with POS machines to boost financial inclusion in rural areas.

The Reserve Bank of India (RBI) is working towards streamlining its licensing process for payment aggregators by merging the requirements for online and offline entities. K. Vijayakumar, General Manager DPSS RBI, announced the upcoming change during a discussion at the Global Fintech Fest.

Speaking at the event, he said that the regulator's intention is to authorise online payment aggregators under a unified license, eliminating the need for separate applications for offline operations.

"We understand that the distinction between physical and online spaces is becoming increasingly blurred," Vijayakumar stated. "To address this, we are moving towards a uniform license for payment aggregators, ensuring they can operate seamlessly across both domains."

Vijayakumar said that the importance of security in payment transactions and that it remains a primary concern for the RBI.

"Innovation by merchants and payment service providers is encouraged, but it is crucial that they adhere to the principles of customer assurance and transaction authentication from the very beginning,” he said.

Vijayakumar talked about the need for integrating Aadhaar-enabled Payment Systems (AePS) with existing Point of Sale (POS) machines to aid financial inclusion in rural areas, which could reduce costs and increase merchant transactions. He talked about allowing transactions without internet access, which could give alternative in areas with poor connectivity or during network outages.

[The Economic Times]