By Sayan Sen

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The Reserve Bank of India issued a consolidated rulebook for payment aggregators (PAs) on Monday, easing how the industry onboards merchants.

Master Direction, which folds in cross-border provisions and replaces a patchwork of circulars, takes effect immediately, the central bank said in a press note.

The biggest operational gain is on-ramps for merchants. Non-bank aggregators can now use agents to help a merchant complete identity checks, including digital KYC and what the regulator calls “assisted V-CIP,” provided the aggregator records who the agent is and remains responsible for the diligence.

The direction states that a PA “shall maintain the details of the agent” and that agents “can only be used for limited purposes,” making it clear that the decision-making stays with the aggregator.

If a merchant’s annual turnover is up to Rs 40 lakh, or export turnover up to Rs 5 lakh, onboarding can run on a slimmer set: verify PAN, conduct a basic on-site or equivalent check, and capture one valid ID for the proprietor or signatory. That trims time and cost without waiving checks.

PAs must go beyond GST registration to perform thorough due diligence and KYC checks on merchants, including PAN verification, contact point verification (CPV), officially valid documents of proprietors, and background checks. They are also required to assign proper merchant category codes and IDs. Non-bank PAs must register with the Financial Intelligence Unit (FIU-IND) and monitor transactions for suspicious patterns.

Aggregators, including those with applications pending at RBI, must bring merchants onboarded through December 31, 2025 into compliance with the new due diligence standard within one year from the date of the Master Direction, and follow the new standard for all onboarding from January 1, 2026.
According to the Reserve Bank of India (Regulation of Payment Aggregators) Directions, 2025, payments aggregators are categorised into three categories on the basis of the work they undertake.

These categories include PA-P for physical PAs; PA-CB for cross-border and PA-O for online PAs, as per the directions.

A bank does not require authorisation to carry out PA business, while for non-banks, the RBI has set specific capital requirements.

“An entity seeking authorisation to commence or carry on PA business shall have a minimum net-worth of Rs 15 crore at the time of tendering application for authorisation; and shall attain a minimum net-worth of Rs 25 crore by the end of the third financial year of grant of authorisation,” it said.

The directions have provisions on escrow accounts and fund management, cross-border limits for PA-CBs and also on governance, wherein the promoters will have to adhere to the ‘fit and proper’ criteria, it said.

The central bank in April 2024 issued draft directions on PAs; the final guidelines have been issued after getting feedback from all stakeholders.

(With inputs from PTI)

(Edited by Kanishk Singh)