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PAYMENT AGGREGATORS (PAs)The Reserve Bank of India has formalised guidelines for regulating the activities of payment aggregators (PAs) given the important functions of these intermediaries in the online payments’ space.
Salient features of new guidelines: • Payment Aggregators (PAs) are entities that facilitate e-commerce sites and merchants in accepting payment instruments from the customers for completion of their payment obligations.
• Payment gateways will be considered as technology providers or outsourcing partners of banks or non-banks, as the case may be.
• A Payment Aggregator should be a company incorporated in India under the Companies Act, 1956 / 2013.
• Non-bank entities offering payment aggregator services will have to apply for authorisation on or before June 30, 2021.
• E-commerce marketplaces, according to the guidelines, providing payment aggregator services will have to be separated from the marketplace business and they will have to apply for authorisation on or before June 30, 2021.
◦ The biggest examples of this- PhonePe, a Flipkart company, and Paytm’s payment aggregator business are already separate entities from the marketplace models.
• It has also specified financial requirements for aggregators- payment aggregators existing today will have to achieve a net worth of ₹15 crore by March 31, 2021 and a net worth of ₹25 crore by the end of third financial year, which means or before March 31, 2023.
• The net-worth of ₹25 crore shall be maintained at all times thereafter.
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