The Reserve Bank of India (RBI) has granted the fintech upstart BharatPe an in-principle authorization to function as an online payment aggregator (PA). The permission was obtained by Resilient Payments Private Limited, a wholly owned subsidiary of the business.
Worldline ePayments India, a company that processes digital payments, and Paysharp, a fintech startup, had also got in-principle authorization from the RBI to function as a PA in December.
Several other fintech businesses have received approval for the PA licence, including Open, Infibeam, and Cashfree.
By taking consumer payment instruments, a payment aggregator offers payment services to merchants and e-commerce websites. After a predetermined period of time, they combine the monies collected from clients and transfer them to merchants.
In addition to enabling bank transfers for merchants without the need to open accounts directly with a bank, their services also include facilitating integrated payment methods such as cash and check transactions, as well as online and offline touchpoints.
The RBI stated in a fresh set of regulations released in March 2020 that it must approve all PAs.
Non-bank businesses that provide PA services were told by the RBI to apply for authorization by June 30, 2021. Later, the due date was raised to September 30, 2021. Applications for a PA licence had been submitted by over 185 start-ups and fintech companies. The central bank has direct control over the few businesses that have been granted operating permission.
Nalin Negi, CFO and interim CEO, BharatPe, said “This in-principle approval will help catapult our expansion plans and enable us to reach out to millions of more unbanked and underserved merchants, provide digital payment acceptance solutions and in turn, get them to be a part of the Digital India story.”
The accomplishment of a few requirements is necessary for the final authorization. As soon as BharatPe receives the final RBI approval, it will start working on meeting the aforementioned requirements within the allotted time frame and establish the aforementioned online PA business.
Since the split between previous managing director Ashneer Grover and significant investors, the company has been mired in controversy. The fintech unicorn said that its income increased by 169 percent to Rs 321 crore in FY22, while its loss increased by 89 percent to Rs 5,594 crore during the same period due to a number of significant exits.