What is a Payment Aggregator License?

If you are an entrepreneur looking to tap into India’s rapidly growing digital payments ecosystem, obtaining a Payment Aggregator (PA) License is a crucial step. A payment aggregator license is an authorization granted by the Reserve Bank of India (RBI) that allows fintech companies and payment service providers to accept and process digital payments on behalf of merchants.

The payment aggregator license issued to payment aggregators or merchant aggregators enables them to facilitate online transactions among customers and merchant entities registered under the Companies Act of 2013. With a payment aggregator license, businesses can facilitate online transactions through multiple payment modes, including credit/debit cards, UPI, net banking, and digital wallets, all under one integrated platform.

Enables Collection & Processing of Merchant Payments

Ensures Compliance with RBI & Data Security Standards

Acts as an RBI-authorized Payment Facilitator

Creates New Growth Opportunities in e-commerce Sectors

Indian Payment Aggregator Market ($4.13 billion by 2033)

Rising Number of Smartphone Users

Get Payment Aggregator License for Your Fintech Business

Get RBI authorization for a payment aggregator license to manage online payments and streamline transactions with Enterslice.

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Basic IT Requirements for Online Payment Aggregator License

Before applying for the online payment aggregator license in India, businesses are required to adhere to the basic IT security measures, as discussed below:

Corporate

Information Security Governance

The organization must conduct a comprehensive security risk assessment of its personnel, IT infrastructure, and business processes, along with reports presented to the Board.

Foreign Direct Investment

Data Security Standards

Data security standards like PCI-DSS, PA-DSS, the latest encryption standards, and Transport Channel Security shall be put into practice for obtaining an aggregator payment license in India.

Financial Accounting Statements

Merchant Onboarding

The organizations shall undertake detailed security assessments during the merchant onboarding process to ensure that the merchants follow these minimal baseline security controls.

Real Estate Assets and Property

Security Incident Reporting

The entities must ensure compliance with monthly reporting related to the security incidents or breaches in cardholders’ data within a time frame of 2-6 hours to RBI.

Human Resources

Cyber Security Audit and Reports

The entities, like banks and third-party aggregators, must quarterly submit their internal annual and external audit reports to the IT Committee established for the purpose.

NBFC’s IPR

Risk Assessment

The risk assessment must be conducted to identify the threat or vulnerability combinations and the likelihood of impact on the confidentiality, availability, or integrity of the business asset.

Meetings

Access to Application

For administering an application system, the documented procedures must be approved by the application owner and must be kept up to date.

Meetings

Competency of IT Staff

The resources must be trained with IT skills, and a periodic assessment of training requirements must be conducted for them.

Meetings

Cryptographic Requirement

The merchant aggregators use encryption algorithms that meet international standards and have been thoroughly tested and verified by recognized cryptographic experts.

Meetings

Forensic Readiness

The merchant aggregators use encryption algorithms that meet international standards and have been thoroughly tested and verified by recognized cryptographic experts.

Meetings

Data Sovereignty

Payment aggregators must ensure that all data is stored within infrastructure located in India and not under any foreign jurisdiction. They should also implement strong controls to prevent unauthorized access to this data.

Meetings

Data Security in Outsourcing

When payment aggregators outsource any operations, the agreement must include a ‘right to audit’ clause, allowing them, their authorized agencies, or regulators to conduct security audits.

Meetings

Payment Application Security

Payment applications must be developed in accordance with PA-DSS guidelines and must fully comply with the prescribed security standards. It should also verify the PCI-DSS compliance status of merchants during the onboarding process.

Meetings

Security Incident Reporting

The payment aggregators must report any cybersecurity incidents to the regulator within 2 to 6 hours, along with a clear merchant agreement outlining the process & timeline for reporting security incidents.

Types of Payment Aggregators in India

The different types of payment aggregators that require authorization under the regulations laid by the Reserve Bank of India are as follows:

Bank Payment Aggregator

Bank payment aggregators are a type of payment aggregator directly operated by banks to help businesses accept online payments through multiple payment methods.

Third-Party Payment Aggregator

Third-party payment aggregators are non-bank entities that ensure the handling of all technical and operational work involved in processing payments from multiple methods.

Benefits of Payment Aggregator License Registration

Both the merchants and clients obtaining a payment aggregator license registration in India enjoy several benefits, as discussed below:

Intermediary Role

A payment aggregator acts as an intermediary, helping businesses to bridge the gap between merchants and clients by facilitating smooth payment collection and settlement.

Simplifies Online Transactions

Obtaining a payment aggregator license enables businesses to simplify online transactions by integrating multiple payment options into a single platform.

Efficient Payment Processing

A payment aggregator license registration ensures efficient processing and completion of payment transactions, thereby reducing friction in online transactions.

Ease of Establishment

Obtaining a payment aggregator license is a relatively straightforward process that helps competition and clients with more options for making payments.

Facilitates Settlement

A payment aggregator license registration facilitates the transfer of funds between clients and merchants, thereby playing an important role in creating a smooth settlement process.

Regulatory Trust and Credibility

Obtaining a payment aggregator license from the RBI significantly enhances regulatory trust and credibility, thereby increasing customer confidence and merchant partnerships.

Swift Market Entry

Obtaining a payment aggregator license allows swift market entry for businesses, ultimately providing a competitive edge by allowing faster integration with merchants and payment networks.

Real-Time Reporting & Analytics

Obtaining a payment aggregator license allows access to real-time reporting and analytics, helping businesses with valuable insights into their transactions and customer purchase behaviour.

Lower Initial Costs

Obtaining a payment aggregator license helps lower initial costs, expenses and enhances customer satisfaction, enabling business growth and important data analysis.

Process for Obtaining Payment Aggregator License in India

The process of obtaining a payment aggregator license involves compliance with several steps, as discussed below:

Understand Regulatory Framework

Before initiating the application process, the entities must understand the comprehensive regulatory framework governing payment aggregators in India.

Incorporate Your Company

The next step requires the applicant to incorporate your company and obtain a certificate of incorporation under the provisions of the Companies Act, 2013.

Comply with Capital Adequacy

In the next step, the applicants must comply with the minimum capital requirement of Rs. 15 crores to Rs. 25 crores within three years from the date of obtaining the license.

Prepare Application Documents

Next, the applicants must prepare application documents, including Form A, a business plan, and other KYC documents needed for a payment aggregator license in India.

File Application Form

Once all the documents are collected, the application Form A must be duly filed, adhering to the instructions and guidelines as provided by the REBI.

Conduct Regulatory Review & Compliance

Once your application is submitted, the RBI must conduct a regulatory review for any queries or requests for additional information.

Obtain a License from the RBI

Upon successful evaluation and satisfaction with all regulatory requirements, the RBI grants the payment aggregator license, authorizing entities to operate as a regulated payment intermediary in India.

How Long Does It Take to Get an RBI Payment Aggregator License?

The time required to obtain an RBI Payment Aggregator License typically takes around 4 to 6 months, depending on the completeness of documentation, compliance readiness, and the applicant’s technical infrastructure.

Company Incorporation: 2 to 3 Weeks

The first step of obtaining an RBI payment aggregator license starts with company incorporation, which usually takes around 2 to 3 weeks.

Preparation of Business Plans: 3 to 4 Weeks

It typically takes around 3 to 4 weeks for the preparation of a business plan covering the payment flow, risk management framework, IT infrastructure, grievance redressal, and compliance policies.

Net Worth Compliance: 3 to 4 Weeks

It takes approximately 3 to 4 weeks to meet the minimum net worth requirement of Rs. 15 crores, increased to Rs. 25 crores within 3 years.

Documentation & Application Submission: 3 to 4 Weeks

The timeline for preparation and submission of all required documents, including the application form, business plan, and other RBI-specified documents, takes around 3 to 4 weeks.

RBI Review and Feedback: 1 to 2 Months

The RBI takes around 1 to 2 months for the evaluation of a company’s financial soundness, technical capability, and governance structure needed for obtaining a payment aggregator license in India.

Issuance of Payment Aggregator License: 5 to 6 Weeks

Upon being satisfied with all compliance and readiness, the RBI takes around 5 to 6 weeks for the grant of a payment aggregator license in India.

Documents Needed to Get a Payment Aggregator License

The list of essential documents needed for obtaining a payment aggregator license in India is as follows:

  • Copy of Certificate of Incorporation (CoI) of the Company
  • Copy of Memorandum and Articles of Association (M&AOA)
  • Formal board resolution authorizing the issuance of a payment aggregator license
  • PAN Card or Address proof of the directors of the company
  • DSC and DIN numbers of the directors of the company
  • Copy of the address proof of the business location
  • Details of the bank account of the company
  • KYC documents of the shareholders and directors of the company
  • NBFC Business Plan of the last 3 years
  • Details of the audited P&L accounts of the company
  • Copy of the financial statement and balance sheet of the company
  • Code testing report by a software agency
  • Detailed structure of the ownership & shareholding status of the company
  • Comprehensive details of the technology infrastructure of the company
  • Compliance and Anti-Money Laundering (AML) policies
  • Copy of the partnership agreement (if any)
  • Other supporting documents of the company (if required)

Recent Updates on Payment Aggregator License Classification

On September 15, the RBI issued a new master direction titled RBI (Regulation of Payment Aggregators) Directions, 2025. This directive establishes a unified and comprehensive framework to regulate payment aggregators that facilitate digital transactions in India. These changes aim to bring clarity, consistency, and stronger regulatory oversight to India’s rapidly growing digital payment ecosystem. As per the latest RBI Master Direction on Regulation of Payment Aggregators, 2025, entities are classified into PA-Online, PA-Physical, and PA-Cross Border, ensuring better compliance and monitoring.

The new RBI guidelines also highlighted the formal classification of payment aggregators into three specific categories, based on the nature of their operations. Have a look at the following three categories of payment aggregator license, as provided below:

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Payment Aggregators-Online (PA-O)

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Payment Aggregators-Physical (PA-P)

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Payment Aggregators-Cross Border (PA-CB)

Key Features of Payment Aggregator License

A payment aggregator license issued by the RBI allows entities to facilitate digital payment processing for merchants, while ensuring security, transparency, and regulatory compliance. With a payment aggregator license, businesses can operate as intermediaries between customers and merchants, offering a unified platform that supports multiple payment modes.

Overall, this framework enables safer transactions, strengthens customer trust, and promotes a more inclusive digital payment ecosystem in India. Have a look at some of the key features that define the role and responsibility of a licensed payment aggregator:

  • Onboarding, Integration & Merchant Account
    The payment aggregators ensure onboarding multiple merchants into their platform after completing due diligence and KYC verification.
  • Safe Payment Processing
    The license ensures secure and efficient processing of digital transactions through encryption standards such as PCI-DSS and PA-DSS.
  • Fraud Detection & Prevention
    The payment aggregators establish an advanced fraud detection system and risk management tools for identifying suspicious and fraudulent transactions.
  • Municipality of Payment Options
    Licensed payment aggregators offer a diverse range of payment solutions, including cards, UPI, net banking, and EMI options.

Risks Associated in Getting a License for Payment Aggregator

The risks associated with obtaining a license for payment aggregator services in India are as discussed below:

  • Inconsistent Restore Mechanism :- The lack of a standardized restore mechanism and consistency in practices across different companies can be a significant concern.
  • Regulatory Oversight of E-Commerce Marketplace :- The dual regulatory environment can create uncertainties and challenges for payment aggregators, potentially subjecting them to double regulation.
  • Governance Practices :- Lack of adequate governance practices within organisations can pose a risk to the client experience and the technology-intensive nature of payment aggregation.
  • Data Privacy and Security :- Ensuring proper supervision of data privacy and customer data protection is a significant challenge.
  • Transaction Chargebacks & Fraud:- Payment aggregators are susceptible to transaction chargebacks and fraud connected with their sub-merchants.
  • Operational Risks:- Payment aggregation involves complex operational risks that could lead to service interruptions, financial losses, and reputational damage.
  • Compliance Risks:- Staying compliant with regulatory requirements is a major challenge faced by payment aggregators seeking authorization under the RBI guidelines.
  • Market Competition:- Payment aggregators face the risk of losing market share to competitors who offer more attractive terms, lower fees, or better services..
  • Technological Risks:- The payment aggregators face technology-related risks leading to insufficient governance practices affecting the customer confidence and experience.
  • Lack of Redress Mechanism:- The lack of proper redress mechanisms and uniformity in practice across the entities is also a matter of concern..

Talk to Enterslice consultants, and let us help you overcome the challenges with minimum effort.

Penalties for Non-Compliance with Payment Aggregator Regulations

Any non-compliance with the regulations of the Payment and Settlement Systems (PSS) Act attracts several penalties outlined to regulate the conduct of payment aggregators in India:

  • Penalty for operating a payment aggregator system without the necessary authorization
  • RBI penalized if found to violate certain provisions of the PSS Act
  • Penalty for failure to provide statements and reports as per regulatory requirements
  • Any breach of rules, orders, guidelines, or regulations of the RBI results in criminal proceedings
  • Penalty for furnishing incorrect or misleading information or statements to regulatory authorities
  • Penalty for utilization of prohibited information or failure to adhere to directives issued by RBI

Eligibility Criteria for a Payment Aggregator License

The eligibility criteria for obtaining a payment aggregator license in India are as discussed below:

Checklist for Obtaining a Payment Aggregator License RBI

  • Obtain authorisation from RBI under the PSS Act
  • Minimum net worth requirement of Rs. 15 crores at the time of application
  • Minimum net worth requirement of Rs. 25 crores within 3 years of receiving the license
  • A detailed 5-year business plan
  • System flow and code testing report by a software certifying agency
  • Ensure compliance with PCI DSS certification
  • Must perform customer due diligence to verify the identity of their customers
  • Adopt a risk-based approach for KYC/ALM
  • Must have a minimum of 3 directors and 2 members
  • Ensure appointment of a designated nodal officer for client complaint redressal

Who Requires a Payment Aggregator License from RBI?

  • Entities engaged in payment aggregation services
  • E-commerce platforms and marketplaces
  • Mobile wallet providers
  • Third-party payment service providers
  • Software and technology companies
  • Online travel agencies and ticketing platforms
  • Other entities providing payment aggregation services

Post-Licensing Compliance for Payment Aggregators

The following is the list of mandatory post-licensing compliance for payment aggregators in India:

    • Prepare audited annual reports of the company
    • Ensure setup of nodal and escrow accounts with scheduled commercial banks
    • Obtain the auditor’s certificate on the Escrow balance report
    • Maintain records of customer identification and other relevant documents
    • Provide regular training to their employees on KYC/AML procedures
    • Prepare one-time non-periodic audit reports
    • Maintain robust fraud monitoring and prevention mechanisms
    • Regularly review and update access controls and user authentication protocols
    • Conduct ongoing security awareness and training programs for employees
    • Outline strategies for minimizing disruptions and unforeseen events or incidents
    • Ensure security incident reporting to regulatory authorities
    • Ensure compliance with security incident reporting requirements
    • Register for KYC and AML to avoid money laundering fraud in the payment structure
    • Nominates nodal officer held responsible for client redressal
    • Ensure compliance with ongoing obligations and other relevant information
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Difference b/w Payment Aggregator and Payment Gateway

The difference between a payment aggregator and a payment gateway, both playing key roles in online payment processing, is as follows:

Basis of Difference Payment Aggregator Payment Gateway
Definition Entities that enable merchants to accept payments from customers by integrating various payment options and settling funds to merchants. Technology infrastructure that securely transmits transaction data between the merchant’s website and the bank/payment processor.
Role Acts as an intermediary between merchants and banks, collecting payments and settling them to merchants’ accounts. Facilitates the transfer of transaction information but does not hold or settle funds.
Fund Handling Handles customer funds before settling them to merchants. Does not handle or store funds; only transfers data securely.
Regulation Requires authorization from RBI under the PSS Act to operate legally. Does not require separate RBI authorization; works under the aggregator or bank framework.
Settlement Responsible for collecting payments and transferring them to merchants within the prescribed time frame. Not responsible for settlement; it only provides the technology layer for transaction processing.
Examples Razorpay, PayU, CCAvenue, BillDesk Paytm Gateway, Stripe Gateway, Cashfree Gateway

Why Trust Enterslice for a Payment Aggregator License?

As a leading business consulting firm, Enterslice specializes in assisting businesses with obtaining various financial licenses in India. Choose our expert services to simplify and expedite the process of acquiring a payment aggregator license in India:

  • Holds in-depth knowledge of RBI regulations for payment aggregators
  • Access to a strong network of 10,000+ CAs, CS, and legal professionals
  • High success rate in completing the payment aggregator license registration process
  • Provides professional, technology-driven legal and compliance services
  • Ensures hassle-free documentation for the payment aggregator license
  • Helps ensure fulfilment of all regulatory and legal compliance mandated by RBI
  • Promotes transparency by providing a clear breakdown of expenses and charges
  • Provides PAN India services for Payment Aggregator License acquisition
  • Helps gain real-time insights into transactions, refunds, and settlements
  • Offers expert guidance for audits and inspections required by regulators
  • Ensures managing inquiries and any further information or requests from the RBI
  • Assists the business in comprehending the guidelines established by the RBI
  • Helps with technology implementation & linking with banks/financial institutions

FAQs on Payment Aggregator License Registration

A payment aggregator is a service provider through which mobile payments and e-commerce merchants can process payment transactions. An aggregator allows a merchant to accept card payments and bank transfers without opening a merchant account with a bank or credit card association.

A payment aggregator license in India is a regulatory authorization that allows businesses to facilitate online payment transactions between merchants and customers.

Payment aggregators work by providing a single platform for merchants to accept various online payment methods such as cards, UPI, and digital wallets.

Yes, PayPal acts as a payment aggregator, processing online payments for merchants using an aggregated merchant account to manage transactions for multiple businesses simultaneously.

All applicant entities engaged in the business of facilitating online payments are required to obtain a payment aggregator license in India.

The process to start a payment aggregator business in India requires compliance with the following steps, as provided below:
  • Step 1: Understand Regulatory Framework
  • Step 2: Incorporate Your Company
  • Step 3: Comply with Capital Adequacy
  • Step 4: Prepare Application Documents
  • Step 5: File Application Form
  • Step 6: Conduct Regulatory Review & Compliance
  • Step 7: Obtain a License from the RBI

No, UPI is not a payment aggregator; on the contrary, it is a real-time payment system that facilitates direct bank-to-bank transfers through mobile applications.

No, the foreign companies are not directly allowed to apply for a payment aggregator license in India. However, the foreign companies only operate as a merchant or partner within the Indian payment ecosystem, by integrating with existing Indian-licensed payment aggregators, who handle the PA license and compliance requirements on their behalf.

The benefits of obtaining a payment aggregator license are as follows:
  • Helps businesses to bridge the gap between merchants and clients
  • Enables simplifying online transactions by integrating multiple payment options
  • Ensures efficient processing and completion of payment transactions
  • Helps competition and clients with more options for making payments
  • Plays an important role in creating a smooth settlement process
  • Helps enhance the regulatory trust and credibility among customers
  • Provides a competitive edge, allowing faster integration with merchants and payment networks
  • Allows access to real-time reporting and analytics
  • Helps lower initial costs, expenses, and enhances customer satisfaction

Obtaining a payment aggregator license takes around 4 to 6 months, based on the complexity of your application, completeness of the documents, and the RBI’s internal processing timeline.

In case your payment aggregator license is rejected by the RBI, you will be required to cease operations and gradually wind down your payment aggregation activities within a specified period, typically 180 days from the date of its rejection.

The examples of entities registered as a payment aggregator in India are Razorpay, Paytm, PhonePe, Cashfree, and PayU.

Yes, banks can operate as a payment aggregator, i.e., a bank payment aggregator, which is distinct from third-party payment aggregators in India.

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