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- These directions shall be effective from Oct 11, 2017.<\/li>\n
- Existing issuers shall ensure compliance with the relevant regulations on or before February 28, 2018.<\/li>\n<\/ul>\n
These directions lay down the legal framework & criteria for holding & issuance of Semi closed & open prepaid payment instruments in the country.<\/p>\n
Authorization of RBI in this regard is a Prerequisite.<\/p>\n
Henceforth, PAYMENTS & SETTLEMENTS ACT, 2007 provides for an illustrative framework for approval of E-wallets & digital prepaid mechanism<\/a>.<\/p>\n
Following Legislations Should Be Kept In Mind before Going Forward With Approval of a Payment Gateway<\/strong><\/h2>\n
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- Section 4 of Payment & Settlements Act, 2007 under Reserve Bank of India guidelines needs to be complied with<\/li>\n
- The application is to be made in Form A under Regulation 3(2) under Payment & Settlement System Regulations, 2008 with prescribed enclosures & annexure to Department of Payment & Settlements Systems (DPSS), RBI, and Mumbai.<\/li>\n
- All the AML, KYC& CFT Norms need to be completed before setting up any payment interface for ensuring transparency & accuracy.<\/li>\n
- Ensuring complete authorization of RBI norms in this regard.<\/li>\n
- Compliance with Prevention of Money Laundering Act, 2002 & Anti Financial Terrorism Norms so that any access to Black Money through such instruments can be foreseen.<\/li>\n
- Filing of STR’s Suspicious Transaction Reports to Financial Intelligence Unit – India<\/li>\n<\/ul>\n
How to Start One’s Own Payment Gateway<\/strong><\/h2>\n
A payment gateway is a merchant service provider through an E-commerce<\/a> platform for processing & furtherance of Debit & Credit Card Payments affected by the masses, business houses & other concerned.<\/p>\n
It is responsible for quick, safe transfer of funds from buyer to seller.<\/p>\n
This data is secured on a server or database which is kept confidential & only persists between buyer, seller & concerned bank. Pre-requisites for this are:<\/p>\n
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- Creation of a Merchant Account for transactions pertaining to buyer & sellers.<\/li>\n
- Setting up of Payment gateway from where the payments shall be effected.<\/li>\n
- The building of own software product & alignment with a variety of financial institutions for the creation of Wallet.<\/li>\n
- Obtaining necessary certifications.<\/li>\n<\/ul>\n
It is an auto-checkout mechanism in order to effect transactional payments for web-based merchants. All the major payment gateways support all sorts of payment facilities for closing the transaction.<\/p>\n
![\"Payment](\"https:\/\/enterslice.com\/learning\/wp-content\/uploads\/2018\/01\/2.png\")
<\/a><\/p>\nA). Best way to start a Payment Gateway or aggregator service is to register it as a Private Limited Company under Indian Companies Act, 2013.<\/p>\n
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- The Company Registration<\/a> must have a minimum paid-up share capital of 5 Crore & minimum positive net worth of 1 Crore at all times.\n
<\/p>\n<\/li>\n
- Even BANKS are permitted to issue the same in all categories.\n
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B). Application of PAN Card, GST Registration No. & opening of Current Bank Account of the Company.<\/p>\n
C). Compliance with the standards of Payment Card Industry Data Security Standard (PCI DSS) for the security of credit information.<\/p>\n
D). Application for license or merchant service provider or payment facilitator with Banks; depending upon the credibility & financial soundness of applicant, Banks shall grant the approval for payment alignment.<\/p>\n
Alternatively, in case of Internet banking, an aggregator license is what is required from individual banks which is a tedious process.<\/p>\n
E). Once the licenses are in custody and approvals are sorted one can start with operations.<\/p>\n
F). Overall Cost for installation of a Payment Aggregator<\/a> anywhere is between 30 Lacks to 1 Crore depending upon the capital adequacy.<\/p>\n
Back then the topic of Payment Gateway was in its infancy, but due to a revolution in E-Commerce & Digital Wallet facility, it has phenomenally taken the markets with storm & still the unused capacity needs to get tapped.<\/p>\n\n\n
- Even BANKS are permitted to issue the same in all categories.\n
- The Company Registration<\/a> must have a minimum paid-up share capital of 5 Crore & minimum positive net worth of 1 Crore at all times.\n