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RBI uplifts year-long ban, grants Payment Aggregator licences

20 Dec 2023

Razorpay, Cashfree, and a few other startups received the licence. However, Paytm and PayU didn't get the central bank's approval.

Reserve Bank of India uplifted the year-long ban on fintech startups like Razorpay, Cashfree and gave them the license to operate as Payment Aggregators (PA). Besides these, Google Pay, payment gateway Paymentz, expense management company, Encash, and neobanking startup Open have also received the PA licence.

However, Paytm and PayU are yet to receive the central bank's nod. The PA licence allows a company to add new merchants and add various financial offerings to their portfolio.

RBI had put the embargo on these startups last year when they failed to monitor payout transactions and carry out risk profiling. While RBI continued its multi-level checks of these startups, these companies were forced to look for alternate revenue mechanisms. Razorpay and Cashfree had started focusing on international markets and offline payments and remittances. Razorpay concentrated on its operations in Malaysia and Cashfree on value add services besides payments.

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