Reserve Bank of India releases draft guidelines for payment aggregators

The draft also covers physical point-of-sale activities of payment aggregators (PAs).

New Delhi:

The Reserve Bank on Tuesday issued draft guidelines to further tighten regulation of payments aggregators, a move aimed at boosting the payments ecosystem.

The draft also covers physical point-of-sale activities of payment aggregators (PAs).

The Reserve Bank of India said that in view of the growth in digital transactions and the important role played by PAs in this area, it is recommended to update the current direction of PAs and cover KYC and due diligence of merchants, operations of escrow accounts, and others. Designed to strengthen the payments ecosystem.

The payments ecosystem in India includes online PA and PA, which facilitate face-to-face/proximity payment transactions.

In terms of KYC and due diligence, the draft says payment aggregators should conduct due diligence on the merchants they onboard in accordance with the customer due diligence (CDD) stipulated in the Master Directives on Know Your Customer (MD-KYC) 2016.

“PAs should ensure that the markets they join do not collect and settle funds for services not provided through their platforms,” ​​the draft, which has been sought for comments by the Reserve Bank of India by May 31, 2024, said.

For face-to-face/contactless payment transactions using cards, the draft stipulates that from August 1, 2025, no entity in the card transaction/payment chain other than the card issuer and/or card network shall store card information. – File (CoF) data.

“Any such data previously stored should be purged,” the draft added.

The draft also said that non-banking institutions providing PA-P services should have a net worth of at least Rs 15 crore at the time of submission of authorization application to the Reserve Bank of India and a net worth of at least Rs 25 crore by March 31, 2028 .

Thereafter the net worth of Rs 25 crore will always be maintained.

(Except for the headline, this story has not been edited by NDTV staff and is published from a syndicated feed.)