Good news for online payment gateways, the Reserve Bank of India (RBI) decided on Thursday to give them a second chance. All Payment Aggregators (PAs) whose applications were rejected by the central bank due to non-compilation of eligibility criteria are eligible to apply.
“Keeping in mind the disruptions caused by the COVID-19 pandemic and to ensure the smooth functioning of the payments ecosystem, it has since been decided to allow another window to all these APs (existing as of March 17, 2020 ) to apply for RBI,” the central bank said in a statement.
APs can apply before September 30, 2022 and must have a net worth of Rs 15 crore as of March 31, 2022, he said.
Additionally, PAs are permitted to continue their operations until they receive communication from RBI regarding the fate of their application. The timeline of March 31, 2023 to achieve net worth of Rs 25 crore must remain, however, the regulator has said.
The RBI said it observed that applications received from some PAs had to be returned as they did not meet the eligibility criteria, including the minimum net worth criterion of Rs 15 crore as of March 31, 2021.
This has led to some APs halting operations within six months of the date the application was returned, RBI said.
“Although they have the option of reapplying if they meet the prescribed criteria, the cessation of operations may lead to disruption of payment systems. It is also possible that some APs did not apply to RBI due to non-compliance with the eligibility criteria”, he added.
Previously, the deadline for submission of permission applications by non-bank companies providing PA services was initially set for June 30, 2021, but was later extended to September 30, 2021 by the RBI.
The RBI had published a payment aggregator framework in March 2020 stating that payment gateways will need to be licensed in order to acquire merchants and offer them digital payment acceptance solutions. This was done to protect the welfare of consumers and businesses.
It also demanded that only companies approved by the RBI can acquire and offer payment services to merchants. RBI has been strict in its assessment of entities that have applied for the payment aggregator license.
Several online payment gateways seeking the aggregator license have come under central bank scrutiny for issues related to know-your-customer (KYC), past transactions with currency exchanges. cryptocurrency and gambling apps, and for not complying with the net worth criteria that RBI had from plan.