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Payment aggregators are playing a crucial role in India’s digital economy. From small shops to large e-commerce platforms, they have made transactions easier everywhere. These companies have created a secure payment bridge between customers and merchants.
But the risk is also increasing with the rapid growth of digital transactions. Strong controls on issues like fraud, data security, and transparency are also becoming important factors. So, the Reserve Bank of India (RBI) has created a new single framework.
On September 15, 2025, the RBI issued a master direction called “Reserve Bank of India (Regulation of Payment Aggregators) Directions, 2025.” These directions have come into effect immediately. This aims to ensure transparency, accountability, and customer protection in the activities of payment aggregators.
A payment aggregator is an organization that works like a bridge between the customer and the merchant. This eliminates the need for merchants to directly contract with banks or payment gateways. Customers can easily make payments online or offline. Merchants also receive money without any hassle.
In countries like India, where online shopping and digital transactions are growing rapidly, payment aggregators are of great importance. They make business easier and provide a stronger foundation for the country’s digital economy.
On September 15, 2025, the RBI issued a new master direction for payment aggregators. It aims to create a single regulatory framework, so all types of payment aggregators adhere to a specific set of rules.
The new directive mainly focuses on four aspects-
This applies equally to both banks and non-banks. Banks will be able to operate their existing payment aggregator businesses. However, non-bank entities will have to obtain fresh approval from the RBI.
This framework will create greater trust and security for merchants, consumers, and the entire digital payments ecosystem.
RBI has divided payment aggregators into three categories in the new guidelines. Different rules will apply to each category.
PA-O (Online):
They handle e-commerce and other online transactions. Their role is important for online transactions where there is no direct connection between the customer and the merchant.
PA-P (Physical):
Here, transactions take place only when the customer’s payment instrument (such as a card or mobile wallet) and the merchant’s receiving device are in the same place. Examples include card swipes or QR code scans at the store.
PA-CB (Cross-Border):
They regulate cross-border transactions. They are divided into two categories: one inward (bringing money from abroad) and the other outward (sending money abroad). Different conditions apply to each.
This classification is important because the risks and challenges of online, offline and international business are different from each other. Therefore, regulating each model under different rules will make each model more transparent and secure.
All entities other than banks will have to obtain fresh RBI approval. The deadline is December 31, 2025. If an entity does not get approval, it will have to cease operations by February 28, 2026.
The main conditions for non-bank payment aggregators are—
RBI has given special importance to corporate governance and risk management in the new guidelines. The key points are-
Merchant Verification: Mandatory KYC for every merchant or PAN verification with an annual turnover less than INR 40 Lakhs, an annual exporter turnover less than INR 5 Lakhs and a background check of merchants.
Transaction Monitoring: Regular transaction monitoring is required to ensure that merchants do not sell prohibited products and that fraud is prevented.
Grievance Officer: Every payment aggregator should have a designated officer who will resolve merchant complaints.
Risk Management System: A strong risk management system should be developed for fraud prevention, customer protection and financial security.
Data Protection: All data should be stored with local data storage norms, and privacy laws should be followed.
FIU-IND Registration: Non-bank aggregators should register with the Financial Intelligence Unit and submit prescribed reports.
Dispute Resolution: Effective mechanisms should be put in place for speedy resolution.
These steps will increase customer confidence and make the entire digital payment system more secure.
RBI has set separate rules for cross-border payment aggregators.
Fund segregation: Inward and outward transaction funds cannot be mixed together because no co-mingling of funds is permitted.
Foreign merchant onboarding: Foreign merchants or payment aggregators can be onboarded.
Authorized methods: Outward transactions can be made only using an authorized payment method, except for small prepaid payment instruments (PPI).
Transaction limit: The maximum limit for each transaction is ₹25 lakh for inward or outward payments processed by a PA-CB.
Forex transactions: No PA-CB will be able to directly buy or sell foreign currencies to any entity, except an authorized dealer.
These rules will help in transparency and risk control in cross-border transactions.
RBI has issued strict guidelines on escrow accounts to keep customer money safe.
Escrow account: An escrow account must be opened with a designated commercial bank.
Fund segregation: Merchant funds and the aggregator’s own funds must be kept separate.
Settlement Time: Money should reach the merchant’s account within a maximum of T+1 (where T is the transaction date) days.
Regular Credit and Debit: Only approved credit and debit transactions can be carried out.
Interest Rules: Interest will be earned on the core portion of the domestic escrow balance, but no interest will be earned on the international balance.
Ensure Transparency: RBI has reiterated that a PA’s agreement with a merchant should disclose all applicable charges. It must include the merchant discount rate (MDR). set-up fees, maintenance charges and any other fees to ensure transparency.
Cash on Delivery: Cash-based transactions cannot be held in the escrow account.
This framework will ensure that customer money is properly protected.
The new rules have increased challenges for startups and non-bank payment aggregators. They will have to accept high net worth and adhere to strict compliance. However, this will increase credibility in the long run.
Merchants will be able to operate in a more transparent environment. They will have increased security due to clear fee structures and risk control mechanisms.
Customers will benefit from reduced fraud, faster settlements and increased data security. This will increase trust in the entire digital payment ecosystem.
RBI’s new Master Direction brings a major change in the digital payments sector in India. While the rules are stringent, they will ensure good governance, customer trust and alignment with international standards.
Businesses operating as non-bank payment aggregators will need to get approvals quickly, strengthen risk control mechanisms and prepare proper documentation. Delays can lead to the closure of operations.
Enterslice can be your trusted partner in this regard. Our experts will provide full support in the application process, approvals, compliance and policy implementation.
Payment Aggregators (PA) are organizations that facilitate merchants accepting digital payments from customers. Through this, merchants don’t need a separate payment system. They collect money from customers and send it to the merchant. RBI regulates these organizations to maintain transparency, prevent fraud and enable customer security.
Banks will be able to run PA services as before. However, all non-bank Payment Aggregators, such as startups or payment service providers, will have to apply for approval by December 31, 2025. If they do not get approval, they will have to stop their activities by February 28, 2026. Otherwise, they may face fines and legal complications.
Non-bank Payment Aggregators must have a net worth of at least ₹15 crore at the time of application. This amount should reach ₹25 crore within three years of approval. This limit should be maintained regularly. In addition, compliance with this condition should be ensured by a statutory auditor. This rule is applicable even if there is foreign investment.
Payment Aggregators have to verify the details of merchants. Full KYC is mandatory for large merchants and PAN verification will continue for small merchants. Their transactions will have to be monitored regularly. It should also be ensured that merchants are not selling illegal or prohibited products. This will reduce fraud and protect the interests of customers.
In the case of cross-border PA (PA-CB), inward and outward transaction amounts cannot be mixed. Outward transactions should be done only through approved methods. The maximum limit for each transaction is ₹25 lakh. In addition, they will not be able to participate in direct foreign exchange trading. RBI conditions will have to be met before adding foreign merchants.
Payment Aggregators will have to keep the merchant's money in a separate Escrow account, which will be opened in a specific bank. The transaction money will have to be sent to the merchant within a maximum of one day (T+1). The Aggregator's own corporate funds cannot be kept in this account. Only interest will be available on domestic balances, but interest will not be available on international balances.
The main objective of RBI is to increase customer protection and transparency. For this, merchant verification, risk management and fraud monitoring are now mandatory. Every PA will have to appoint an officer to handle customer complaints. In addition, it will have to be registered with FIU-IND. These steps will increase trust in digital payments and prevent fraud to a large extent.
The entry requirements for startups and small Payment Aggregators have become tougher because of the higher net worth thresholds and costs. However, this will create more trust in the market. Those who comply with the rules will gain credibility in the long run, attract investors and build strong relationships with merchants.
If a non-bank Payment Aggregator does not get approved by December 31, 2025, they will have to cease operations by February 28, 2026. Operating without approval can lead to fines and legal action. It will also damage the reputation of the business. Therefore, timely application and compliance with the rules are very important.
Enterslice provides complete support to merchants for easily complying with the new RBI rules. We help in preparing applications, meeting the net worth and foreign investment requirements, creating risk management policies and building a merchant verification framework. Our experienced team ensures your business can run smoothly and build trust in the market.
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