RBI Issues Master Direction for Payment Aggregators in India

🔔 Important Update from RBI: New Directions for Payment Aggregators (PAs) The Reserve Bank of India (RBI) has issued comprehensive updated guidelines governing the operations of Payment Aggregators (PAs), focusing on enhancing operational clarity, customer protection, and systemic integrity in the payment ecosystem. Here are key highlights from the recent circular: ✅ Segregation of Accounts: PAs must maintain separate escrow accounts for domestic and cross-border activities to streamline fund management and ensure compliance. ✅ Escrow Account Restrictions: Cash-on-Delivery transactions are explicitly prohibited via escrow accounts. All outward and inward cross-border transactions have strict operational mandates to maintain transparency and compliance. ✅ Due Diligence & KYC Compliance: Mandatory retrieval of merchant KYC records from CKYCR during onboarding. Background checks and validation of Merchant Category Codes (MCCs) and IDs are critical to prevent misuse. ✅ Capital Requirements & Authorisation: Non-bank PAs must maintain a minimum net worth of ₹15 crore at application, growing to ₹25 crore by the third financial year, ensuring financial stability. ✅ Audit and Reporting: Regular submission of auditor certificates to RBI confirms adherence to escrow balance maintenance and operational guidelines. ✅ Repeal of Previous Circulars: RBI repealed older guidelines related to processing and settlement of export/import related receipts facilitated by online payment gateways, reinforcing the new framework. ⏳ All entities have a transition period until December 31, 2025, to comply with the new due diligence requirements and escrow account mandates. These updates mark a significant step towards a safer and more accountable digital payments ecosystem in India, especially in an era of growing fintech innovation and digital commerce expansion. #RBI #PaymentAggregators #Fintech #DigitalPayments #Compliance #KYC #EscrowAccount #Regulations #IndiaFinance

🚀 RBI’s New Payment Aggregator Regulations: What It Means for Cross-Border Payments 🚀 The Reserve Bank of India has unveiled its comprehensive Payment Aggregator (PA) framework, harmonizing regulations across online, offline, and cross-border payment aggregation. As fintech professionals involved in cross-border payments, it’s important to understand the implications: 🔹 Cross-border caps: Outward payments capped at INR 25 lakh per transaction and must be routed via authorized dealer banks. This introduces a clear limit aimed at mitigating risk but may restrict high-value transactions for some businesses. 🔹 Escrow & fund segregation: Stringent rules require separate escrow accounts for inward and outward flows, with no interest on cross-border escrow balances. This strengthens customer fund security and reduces misuse risks. 🔹 Stricter KYC & Governance: Enhanced merchant due diligence and promoter/director fit-and-proper criteria will improve transparency and trust in cross-border payment ecosystems. 🔹 Cybersecurity mandates: Mandatory PCI-DSS compliance, data localization in India, and annual CERT-In audits elevate security standards, crucial for safeguarding cross-border transactions. Are these changes good or challenging? ✅ The regulations enhance customer protection, fraud prevention, and market integrity—key to sustainable growth in fintech cross-border payments. ⚠️ However, compliance costs, governance requirements, and transaction caps pose hurdles for smaller players and could impact scalability. For fintech's and payment aggregators, adapting proactively to these regulations is vital to remain competitive and compliant in India’s evolving payments landscape. #Fintech #CrossBorderPayments #RBI #PaymentAggregators #DigitalPayments #Compliance

The Reserve Bank of India (RBI) has now unified all previous guidelines into one comprehensive framework for Payment Aggregators streamlining compliance and boosting trust in India’s digital payments ecosystem. Key Highlights: 📜 Consolidated Framework: Merges earlier regulations (2020/21 for PA–PG, 2023 PA–Cross Border, Apr 2024 PA–Physical drafts) into a single Master Direction for clarity and ease of compliance. 🏬 Offline Aggregators Included: PA–Physical (PoS) entities are now fully regulated. Offline players must seek RBI authorisation, at par with online aggregators. 🪪 Unified Licensing & Reporting: Single authorisation and reporting system for PA–Online, PA–Physical, and PA–Cross Border ensures harmonised compliance, simplifying obligations for all players. 💳 Escrow & Settlements: Mandates escrow accounts with scheduled commercial banks; stricter settlement flows mean marketplaces cannot split funds directly—everything must route via escrow for safer fund handling. 🧾 KYC & Due Diligence: Enhanced onboarding checks including CPV for small merchants and streamlined norms for MSMEs, with stronger monitoring. Non-bank PAs must register with FIU-IND, reinforcing AML controls. 🌐 Cross-Border Payments: PA–CBs now need dedicated import/export escrow accounts and a ₹25 lakh cap per transaction, replacing the earlier $2,000 limita big step for safer cross-border volumes. 📊 Impact: Stricter compliance for fintechs and merchants, greater responsibility for banks; but clearer, unified rules that strengthen digital payment trust, safety, and innovation. RBI’s move marks a pivotal moment: not just increased regulatory scrutiny, but a foundation for the next phase of digital payment growth in India. Payment aggregators online, offline, and cross border are now on a level playing field, with trust and customer protection at the core.

Key RBI Guidelines for Payment Aggregators (PAs) & Payment Gateways (PGs) The Reserve Bank of India (RBI) has laid out a comprehensive framework to enhance trust, transparency, and security in the digital payments ecosystem. Here are the top takeaways: • Definitions & Roles • PAs: Non-bank entities that handle funds for merchants – RBI authorisation required. • PGs: Tech-only facilitators for routing transactions – must follow outsourcing norms. • Authorisation • Non-bank PAs must be licensed under the Payment & Settlement Systems Act, 2007. • Bank PAs follow banking regulations (no separate licence). • Cross-border PAs (PA-CB) need RBI approval/notification. • Capital & Escrow • ₹15 Cr net worth at authorisation → ₹25 Cr within 3 years. • 100% funds in a non-interest escrow account, settlement by T+1 (or T+0 with consent). • Governance & Compliance • Board with 50% independent directors. • Full KYC for merchant onboarding. • RBI must be notified of ownership/control changes ≥26%. • Security & Consumer Protection • PCI-DSS compliance, tokenisation, and data localisation. • Strong grievance redressal with defined timelines. These norms strengthen digital payments reliability while aligning with global best practices. For detailed reference: RBI Guidelines #DigitalPayments #Fintech #RBI #Payments #GDBWrites Disclaimer: Views expressed are personal. Based on three decades of experience in financial services across SEA and

The RBI has just released a new Master Direction for Payment Aggregators (Sept 15, 2025) – and it’s a big one for India’s digital payments ecosystem. Here are some of the key takeaways: ✅ Applies to both online, physical (POS), and cross-border PAs. (Payment Gateways still excluded as they don’t handle funds) ✅ Capital requirements raised – ₹15 Cr net worth to apply, ₹25 Cr within 3 years (for non-bank PAs) ✅ Stronger governance norms – fit & proper criteria for directors, RBI nod needed for ownership/control changes ✅ Consumer-first approach – transparent pricing, quick dispute resolution, refunds back to original payment method ✅ Cybersecurity gets serious – PCI-DSS compliance, fraud prevention frameworks, annual CERT-In audits ✅ For cross-border payments – separate inward/outward accounts, ₹25 lakh per transaction cap, strict FEMA compliance ✅ KYC/AML tightened – PAN & address verification, FIU-IND registration, ongoing monitoring of merchants ✅ Escrow accounts made stricter – mandatory settlement timelines, limited permitted debits/credits, interest allowed only on “core portion” ✅ Reporting obligations – monthly, quarterly, and annual filings made more robust ✅ Old guidelines (2020, 2021, 2023) now repealed – everything consolidated under this single Master Direction Why does this matter? Because it’s another step towards making India’s fintech ecosystem more secure, transparent, and globally aligned, while also pushing players to raise their compliance game. #RBI #Fintech #DigitalPayments #Compliance #PaymentAggregators #CircularsRBI

The Payment Landscape Just Got a Major Upgrade The RBI's Master Direction 2025 marks a transformative moment for India's digital payment ecosystem. From unified compliance frameworks to enhanced security standards, this regulation brings much-needed clarity and structure to payment aggregators. Key highlights that matter: • Clear categorization: PA-Online, PA-Physical & PA-Cross Border • Stringent capital requirements: ₹15 Cr minimum, scaling to ₹25 Cr • Robust governance and fit-and-proper criteria for all stakeholders • Mandatory data localization and PCI-DSS compliance • Enhanced merchant onboarding with comprehensive KYC norms • Critical deadline: 31 Dec 2025 for applications This isn't just regulation—it's a blueprint for building trust, transparency, and resilience in India's fintech infrastructure. For businesses operating in the payment space, compliance is no longer optional. The era of structured growth has arrived. Read our detailed analysis to understand how these changes impact your operations and what steps you need to take now. Insights By Aditya Kaushik Shruti Kesarwani #RBI #PaymentAggregators #Fintech #DigitalPayments #RegulatoryCompliance #IndianBanking #PaymentSystems #FintechRegulation #DigitalIndia #ComplianceMatters #PaymentGateway #FintechIndia #RBIGuidelines #FinancialRegulation #PaymentIndustry

💡 4 Key Insights from RBI’s Master Direction on PAs (2025): 1️⃣ Unified Regulation = Clarity For the first time, Online, Offline (PoS), and Cross-Border PAs are under a single framework. This removes ambiguity, ensures a level playing field, and sets a standardised compliance calendar. 2️⃣ Escrow & Settlement = Trust Mandatory escrow accounts with Scheduled Commercial Banks (SCBs), prohibition on marketplaces directly splitting funds, and clear timelines for settlement will protect merchants and customers while improving transparency in fund flows. 3️⃣ Cross-Border Rules = Scale with Safety By introducing ₹25 lakh per-transaction cap (replacing the old $2,000 limit) and mandating separate Inward/Outward accounts, RBI has given exporters/importers more flexibility but within a tightly monitored ecosystem aligned to FEMA. 4️⃣ KYC & Governance = Higher Entry Bar Fit & proper criteria for promoters/directors, FIU-IND registration, CPV for small merchants, and stronger monitoring mean new entrants must invest in compliance early on. This will reduce weak players and build resilience in the sector. 📌 Net effect: Stricter norms will increase compliance costs in the short term, but in the long term, this will strengthen trust, reduce disputes, and build global credibility for India’s payments ecosystem. #RBI #Compliance #Fintech #DigitalPayments #PaymentAggregator

Regulatory Update from RBI – Master Direction on Payment Aggregators (2025) The Reserve Bank of India (RBI) has issued a comprehensive Master Direction on Regulation of Payment Aggregators (PA), effective immediately. This unified framework consolidates and supersedes previous circulars, bringing online, physical, and cross-border Payment Aggregators under a single regulatory structure. 🔑 Key Highlights: • Authorisation & Capital Norms: Non-bank PAs must maintain a minimum net worth of ₹15 Cr at application, reaching ₹25 Cr within 3 years. • Categories of PAs: • PA-Physical (PA-P) • PA-Online (PA-O) • PA-Cross Border (PA-CB) – inward & outward transactions • Governance & Risk: Fit-and-proper criteria for promoters/directors, mandatory dispute resolution framework, cyber resilience & annual CERT-In security audits. • KYC & Merchant Due Diligence: Stronger CDD norms with CKYCR, CPV, PAN/OVD checks, FIU-IND registration, and ongoing transaction monitoring. • Escrow Accounts & Settlement: Stricter timelines, segregation of domestic vs cross-border funds, “core portion” interest eligibility, and enhanced reporting. • Consumer Protection: Transparency in charges, refunds to original payment mode, MDR compliance, and prohibition of PIN authentication for card-not-present transactions. • Repeal & Consolidation: Earlier circulars on PAs (2020, 2021, 2023) stand repealed with this Direction. 📌 This marks a significant step in strengthening the digital payments ecosystem, ensuring transparency, security, and accountability across both domestic and cross-border payment flows. 👉 Fintechs, banks, and payment players will need to align their governance, compliance, and operational practices swiftly to meet these requirements. 🔗 Read the full Master Direction here: https://lnkd.in/d6q2BusC #RBI #DigitalPayments #Fintech #Regulation #Compliance #PaymentAggregators

🚨 Breaking Fintech News: RBI has directed Simpl to halt all payment operations, citing non-compliance with the Payment & Settlement Systems Act. This comes at a time when regulators are tightening oversight on BNPL and pay-later platforms. With compliance gaps surfacing, the industry faces a reality check: growth cannot outpace regulation. 👉 For fintechs, this highlights three urgent priorities: 1️⃣ Regulatory alignment – ensuring your operating model has the right licences/authorisations. 2️⃣ Robust compliance infrastructure – clear audit trails, settlement systems, and user liability management. 3️⃣ Merchant/user trust – proactive communication and smooth migration support when disruptions occur. While this pause is a setback for Simpl, it’s also a signal to the entire ecosystem: resilient fintechs will be those who embed compliance and risk management as core business pillars, not afterthoughts. 💡 At times like this, there’s also opportunity – from helping merchants migrate, to building compliance-ready infrastructure for fintechs, to advising on regulatory re-architecture. What are your thoughts? Will this move slow BNPL adoption in India, or push the sector towards a stronger, more sustainable future? Read more on : https://lnkd.in/gDtmrSR9 #Fintech #BNPL #RBI #Payments #Compliance #Innovation

The Reserve Bank of India has released a comprehensive new Master Direction on Regulation of Payment Aggregators (PAs), effective immediately and issued under the Payment and Settlement Systems Act, 2007 and FEMA, 1999. Key Highlights for the Payments Ecosystem - All bank and non-bank entities undertaking Payment Aggregator business are now covered, including those handling both online and physical point-of-sale (POS) transactions, as well as cross-border payments. - Non-bank PAs must obtain RBI authorisation and meet increased minimum net-worth norms: ₹15 crore at the time of application and ₹25 crore within three years. - The guidelines set clear standards for governance, KYC/due diligence, robust dispute management, and advanced security—including annual CERT-In empanelled cyber audits and baseline tech measures like PCI-DSS. - Escrow account operation and settlement norms for merchant funds have been detailed, with prohibitions on interest except for a “core portion” and new rules for cross-border (“InCA/OCA”) management. - The new Direction repeals and supersedes all prior RBI circulars on PA/PG regulation, aiming to rationalise and future-proof compliance. 𝐖𝐡𝐚𝐭 𝐓𝐡𝐢𝐬 𝐌𝐞𝐚𝐧𝐬 𝐟𝐨𝐫 𝐅𝐢𝐧𝐭𝐞𝐜𝐡𝐬, 𝐁𝐚𝐧𝐤𝐬 & 𝐌𝐞𝐫𝐜𝐡𝐚𝐧𝐭𝐬 𝐓𝐡𝐢𝐬 𝐮𝐧𝐢𝐟𝐢𝐞𝐝 𝐟𝐫𝐚𝐦𝐞𝐰𝐨𝐫𝐤 𝐜𝐫𝐞𝐚𝐭𝐞𝐬 𝐜𝐥𝐚𝐫𝐢𝐭𝐲 𝐚𝐧𝐝 𝐬𝐭𝐫𝐢𝐜𝐭𝐞𝐫 𝐜𝐨𝐦𝐩𝐥𝐢𝐚𝐧𝐜𝐞 𝐟𝐨𝐫 𝐭𝐡𝐞 𝐞𝐧𝐭𝐢𝐫𝐞 𝐩𝐚𝐲𝐦𝐞𝐧𝐭𝐬 𝐞𝐜𝐨𝐬𝐲𝐬𝐭𝐞𝐦. 𝐏𝐀𝐬, 𝐚𝐜𝐪𝐮𝐢𝐫𝐞𝐫𝐬, 𝐚𝐧𝐝 𝐦𝐞𝐫𝐜𝐡𝐚𝐧𝐭𝐬 𝐦𝐮𝐬𝐭 𝐚𝐮𝐝𝐢𝐭 𝐭𝐡𝐞𝐢𝐫 𝐨𝐧𝐛𝐨𝐚𝐫𝐝𝐢𝐧𝐠, 𝐞𝐬𝐜𝐫𝐨𝐰, 𝐚𝐧𝐝 𝐫𝐞𝐩𝐨𝐫𝐭𝐢𝐧𝐠 𝐩𝐫𝐨𝐜𝐞𝐬𝐬𝐞𝐬 𝐭𝐨 𝐚𝐯𝐨𝐢𝐝 𝐛𝐮𝐬𝐢𝐧𝐞𝐬𝐬 𝐝𝐢𝐬𝐫𝐮𝐩𝐭𝐢𝐨𝐧 𝐢𝐧 2026. 𝐅𝐨𝐫 𝐬𝐞𝐜𝐭𝐨𝐫 𝐧𝐞𝐰𝐜𝐨𝐦𝐞𝐫𝐬: 𝐝𝐞𝐭𝐚𝐢𝐥𝐞𝐝 𝐞𝐥𝐢𝐠𝐢𝐛𝐢𝐥𝐢𝐭𝐲, 𝐜𝐚𝐩𝐢𝐭𝐚𝐥 𝐫𝐞𝐪𝐮𝐢𝐫𝐞𝐦𝐞𝐧𝐭, 𝐬𝐞𝐜𝐮𝐫𝐢𝐭𝐲, 𝐚𝐧𝐝 𝐊𝐘𝐂 𝐫𝐮𝐥𝐞𝐬 𝐚𝐫𝐞 𝐧𝐨𝐰 𝐧𝐨𝐧-𝐧𝐞𝐠𝐨𝐭𝐢𝐚𝐛𝐥𝐞 𝐟𝐨𝐮𝐧𝐝𝐚𝐭𝐢𝐨𝐧 𝐬𝐭𝐨𝐧𝐞𝐬. Are you a fintech, bank, or merchant navigating these changes? Let’s connect to explore compliant growth strategies under the latest RBI regime. GenZCFO NBFC Advisor #Payments #RBI #Fintech #PaymentAggregator #RegulatoryUpdate #Compliance #DigitalPayments