Fintech companies Razorpay and Cashfree Payments have received payment aggregator licences from the Reserve Bank of India (RBI). In a huge relief to these companies, the RBI has also allowed them to onboard new merchants.
A Razorpay spokesperson says the company is now open to onboarding new businesses. "Razorpay has received the final authorisation from the Reserve Bank of India (RBI) to operate as a Payment Aggregator (PA) under the Payment Settlements Act, 2007. Having received the new PA licence, we now restart onboarding new customers and are committed to serving them with our industry-first payment solutions," the spokesperson adds.
Razorpay is one of the first payment gateways to have received the final payment aggregator licence from the RBI, says the statement. On the development, a Cashfree Payments spokesperson terms it a "pivotal moment". The company confirms it is also onboarding new merchants on its payment gateway now.
“Securing the Payment Aggregator (PA) licence from the RBI is a pivotal moment for Cashfree Payments, affirming our focus on compliance and highlighting the significance of a well-regulated payments landscape. We are now onboarding new merchants on our payment gateway. We are very excited about this new phase of our journey, where we continue to drive exponential growth and retain our market leadership as the preferred aggregator in the payments space.”
Razorpay, along with other financial services companies Pine Labs and Stripe, had received an "in-principle approval" from the apex bank for a payment aggregator licence in July 2022. However, Razorpay and Cashfree were asked not to onboard new customers.
There were certain changes these companies incorporated, paving the way for the final RBI approval. In April 2023, Razorpay set up an advisory board to ensure corporate governance and compliance. The company also onboarded former deputy RBI governor NS Vishwanathan and Arijit Basu, the former managing director of the State Bank of India, as part of the advisory board. It also roped in retired IAS officers Aruna Sundarajan and KP Krishnan as part of the advisory board. They were tasked to periodically review, analyse, and provide recommendations and directions on both strategic and tactical levels.
Founded in 2014, Razorpay is the second Indian company to be a part of Silicon Valley’s largest tech accelerator, Y Combinator. It provides technology payment solutions to more than 10 million businesses. It is backed by Marquee investors such as Lone Pine Capital, Alkeon Capital, TCV, GIC, Tiger Global, Sequoia Capital India, Ribbit Capital, Matrix Partners, Salesforce Ventures, Y Combinator and MasterCard, who have invested a total of $741.5 million through Series A to F in funding.
Cashfree Payments, on the other hand, provides full-stack payment solutions to collect payments and make payouts via all available methods. Its offerings include an advanced and easy way to integrate payment gateways, and a split payment solution for marketplaces, among others. It is backed by Silicon Valley investor Y Combinator, Apis Partners, and State Bank of India (SBI), and was incubated by PayPal.
Besides these two, neobank Open has also received the final licence from the central bank to work as a payment aggregator.
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