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Mswipe Technologies has received in-principle approval from the Reserve Bank of India (RBI) for a payment aggregator (PA) licence, said the company that provides point of sales (PoS) solutions and helps businesses with digital payments.
A payment aggregator is a third party responsible for managing and processing merchants’ online transactions. A PA licence will allow Mswipe to develop an in-house online payment gateway, moving away from outsourcing transaction settlements.
“Mswipe will now concentrate on expanding and reaching out to more MSMEs by offering them with all the options, including PoS terminals, QR-code payments, boombox (payment soundbox), payment gateways, and even lending solutions”, said Ketan Patel, chief executive officer of the company.
Razorpay, Pine Labs, Stripe, 1Pay, and Innoviti Payments are other payment providers that have RBI’s in-principle approval for PA licences and more companies are expected to get the central bank’s nod.
Last month, RBI allowed another window to PAs existing as of March 2020 to apply for licences. PAs can now apply for licences by September 30, 2022 and should have a minimum net worth of Rs 15 crore as on March 31, 2022.
In 2020, RBI issued guidelines that said only approved firms could acquire and offer payment services to merchants. Banks do not need approval separately, but non-bank entities offering payment aggregator services had to apply for authorisation by June 2021. The deadline was later extended. The central bank had, however, allowed them to continue their operations till they received communication from the regulator regarding the fate of their application.
The central bank had specified the criteria the entities have to fulfil to secure such a license and a number of firms have seen their applications being rejected while many have also got the nod from the RBI. According to reports, about 180 applications were made to the RBI. A number of applications were rejected and quite a few approved.
“Though they have the option to apply afresh on meeting the prescribed criteria, ceasing operations may lead to disruption in payment systems. It is also possible that some PAs had not applied to RBI due to non-fulfilment of eligibility criteria”, it added.
Payment aggregators are entities that facilitate e-commerce sites and merchants to accept various payment instruments from the customers for completion of their payment obligations without the need for merchants to create a separate payment integration system of their own.
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