How to obtain Payment Aggregator or Payment Gateway License in India?


How to Obtain a Payment Aggregator or Payment Gateway License in India

As India rapidly embraces digital payments, entities offering online payment solutions—like payment gateways and aggregators—must operate under regulatory frameworks to ensure security, transparency, and customer protection. The Reserve Bank of India (RBI) governs these operations through detailed guidelines, mandating a Payment Aggregator (PA) License for non-bank entities. Here's a step-by-step guide to understanding and obtaining this license in India.

What is a Payment Aggregator (PA)?

A Payment Aggregator is an intermediary between merchants and customers, facilitating online payments through various channels—credit/debit cards, UPI, wallets, net banking, etc. Unlike banks, these entities collect payments on behalf of merchants and settle them after a defined period.

RBI Guidelines for PA/PG License

In March 2020, RBI issued "Guidelines on Regulation of Payment Aggregators and Payment Gateways", requiring non-bank entities to seek RBI approval to operate as a PA. The rules aim to streamline digital payments and ensure security.

Who Needs a PA License?

  • Fintech companies providing checkout solutions

  • E-commerce platforms collecting payments on behalf of vendors

  • Businesses offering payment links, subscriptions, or billing APIs

  • Non-banking financial services accepting digital payments on behalf of third parties

Eligibility Criteria

To apply for a Payment Aggregator license, the entity must:

  • Be a company incorporated in India under the Companies Act, 2013

  • Have a minimum net worth of ₹15 crore at the time of application, to be increased to ₹25 crore within 3 years

  • Ensure fit and proper status of directors and promoters

  • Follow Know Your Customer (KYC) and Anti-Money Laundering (AML) guidelines

  • Maintain merchant onboarding guidelines

  • Comply with data storage norms (data localization)

Documents Required

  1. Certificate of Incorporation

  2. Memorandum & Articles of Association (MOA & AOA)

  3. Net worth certificate from a Chartered Accountant

  4. Board resolution approving PA application

  5. Detailed business plan

  6. IT system architecture and security framework

  7. KYC/AML policy

  8. Cybersecurity policy

  9. Audited financials (last 3 years, if applicable)

  10. Details of Directors and Shareholders

Step-by-Step Application Process

1. Company Formation

Ensure your company is registered under the Companies Act, 2013 and meets the net worth requirement.

2. Document Preparation

Compile all required documents, including business plans, compliance policies, and technical infrastructure documentation.

3. Application Submission

Submit the application to RBI’s Department of Payment and Settlement Systems (DPSS) through physical mode (RBI may launch an online portal in future).

4. RBI Scrutiny

RBI will evaluate:

  • Capital adequacy

  • Risk management

  • Technical infrastructure

  • Past track record

  • Governance standards

5. In-Principle Approval

If satisfied, RBI grants in-principle approval, valid for 6 months. During this period, the applicant must comply with all specified requirements.

6. Final Authorization

Once compliance is confirmed, RBI issues the Certificate of Authorization, allowing the entity to operate as a Payment Aggregator.

Key Compliance Obligations After Licensing

  • Ongoing Capital Requirements

  • Periodic KYC & AML Audits

  • IT System Security Audits

  • Customer Grievance Redressal Mechanism

  • Regular Reporting to RBI

Penalties for Non-Compliance

Operating as a Payment Aggregator without a valid RBI license may result in:

  • Immediate suspension of operations

  • Penalties or prosecution under RBI Act

  • Rejection of future license applications

Conclusion

Obtaining a Payment Aggregator license in India is a rigorous but essential process for fintechs and e-commerce platforms dealing with digital payments. By aligning with RBI’s regulatory framework, companies not only gain legal clarity but also build greater trust among customers and merchants. Timely compliance, robust data security, and strong internal controls are key to securing and maintaining this license.


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