The Reserve Bank of India (RBI) on Friday announced that the regulations for online Payment Aggregators (PAs) will be extended to offline PAs as well.
Offline Payment Aggregators handle proximity or face-to-face transactions. Since March 2020, online PAs have been brought under the purview of RBI regulations and it mandates that only firms approved by the RBI can acquire and offer payment services to merchants.
RBI Governor Shaktikanta Das said, "This measure is expected to bring in regulatory synergy and convergence on data standards."
Payment aggregators are service providers that facilitate merchants as well as e-commerce sites to accept various payment instruments from customers. They offer payment gateways to merchants.
In 2020, the central bank came up with detailed guidelines that said PAs should submit the list of merchants acquired by them to the bank where they are maintaining the escrow account and update the same from time to time.
Also, the banks should ensure that payments are made only to eligible merchants.
Fintech firms such as Razorpay, Pine Labs and 1Pay have received in-principle approval to operate as PAs. Cashfree is the latest one to join the list.
The governor also said that Regional Rural Banks (RRBs) are currently allowed to provide Internet Banking facility to their customers.
"Keeping in view the need to promote the spread of digital banking in rural areas, these criteria are being rationalised," he said.