Master Direction on Regulation of Payment Aggregator (PA)

RBI/DPSS/2025-26/141 CO.DPSS.POLC.No.S-633/02-14-008/2025-26

September 15, 2025

All Payment System Providers and Payment System Participants / All Authorised Dealer banks / All Scheduled Commercial Banks

Madam / Dear Sir,

Master Direction on Regulation of Payment Aggregator (PA)

The Reserve Bank of India had issued the ‘Guidelines on Regulation of Payment Aggregators and Payment Gateways’ vide circular DPSS.CO.PD.No.1810/02.14.008/2019-20 dated March 17, 2020 and CO.DPSS.POLC.No.S33/02-14-008/2020-2021 dated March 31, 2021 for regulation of entities that were engaged in online payment aggregation. Further, vide circular CO.DPSS.POLC.No.S-786/02-14-008/2023-24 dated October 31, 2023, directions were issued on ‘Regulation of Payment Aggregator – Cross Border (PA - Cross Border)’.

2. Subsequently on April 16, 2024, Reserve Bank of India, placed on its website, for public comments, the following draft directions on regulation of PA:

• ‘New draft directions on regulation of Payment Aggregators – Physical Point of Sale’, and
• ‘Amendments to the existing directions on Payment Aggregators’.

3. On a review of the inputs received and in line with RBI’s endeavour to further rationalise the regulations, this comprehensive Master Direction is issued under Section 18 read with Section 10 (2) of the Payment and Settlement Systems Act, 2007, and Section 10 (4) and Section 11 (1) of the Foreign Exchange Management Act (FEMA), 1999 for regulation of various categories of PA.

Yours faithfully,

(Gunveer Singh) Chief General Manager-in-Charge

Encl.: As above

Master Direction on Regulation of Payment Aggregators

Table of Contents

Chapter I: Preliminary

• 1. Short Title and Commencement
• 2. Effective Date
• 3. Applicability
• 4. Definitions

Chapter II: Authorisation and Capital Requirements

• 5. Authorisation for PA Business
• 6. Capital Requirements

Chapter III: Conduct of PA business

• 7. Governance
• 8. Dispute Management Framework
• 9. Security, Fraud Prevention and Risk Management Framework
• 10. General Directions
• 11. Specific Directions applicable to PA – CB
• 12. Reports

Chapter IV: KYC and due diligence

• 13. Due Diligence for PA
• 14. Responsibilities of Acquiring Bank
• 15. Due Diligence through Assisted Mode

Chapter V: Settlement of Funds and Escrow Accounts

• 16. Escrow Accounts for PA
• 17. Core Portion of Escrow Accounts
• 18. General Directions on Escrow Account of PA

Chapter VI: Repeal and Savings

In exercise of the powers conferred by Section 18 read with Section 10(2) of the Payment and Settlement Systems Act, 2007 (51 of 2007), and Section 10 (4) and Section 11 (1) of the Foreign Exchange Management Act (FEMA), 1999 (42 of 1999), the Reserve Bank of India, being satisfied that it is necessary and expedient in the public interest so to do, hereby, issues the Directions hereinafter specified.

Chapter I

Preliminary

1. Short Title and Commencement

• a. These Directions shall be called the Reserve Bank of India (Regulation of Payment Aggregators) Directions, 2025.

2. Effective Date

• a. These Directions shall be effective immediately unless indicated otherwise for any specific provision herein.

3. Applicability

• a. These Directions shall apply to all bank and non-bank entities undertaking the business of Payment Aggregator (PA) as defined herein. These Directions shall also apply to all Authorised Dealer banks as well as Scheduled Commercial Banks which engage with entities undertaking PA business, to the extent hereinafter specified.

4. Definitions

• a. Cash-on-delivery transaction: A merchant transaction wherein banknotes or currency notes, being legal tender in India, is offered or tendered, for and at the time of, delivery of goods and / or service(s).
• b. Contact Point Verification (CPV): Physical verification of the address or place of business of the merchant.
• c. E-commerce: Buying and selling of goods and services, including digital products, conducted over digital and electronic network.

Explanation: For the purposes of this definition, the term ‘digital & electronic network’ shall include network of computers, television channels and any other internet application used in automated manner such as web pages, extranets, mobiles, etc.

• d. Inward transaction: Transaction involving the inflow of foreign exchange.
• e. Marketplace: An e-commerce entity which provides an information technology platform on a digital or electronic network to facilitate transactions between buyer(s) and seller(s).
• f. Merchant: An entity or a marketplace that sells goods, provides services, or offers investment products, and includes exporters and overseas sellers.
• g. Outward transaction: Transaction involving the outflow of foreign exchange.
• h. Payment channel: The method or manner through which payment instruction is initiated and processed in a payment system.
• i. Payment Aggregator (PA): An entity that facilitates aggregation of payments made by customers to the merchants through one or more payment channels through the merchant’s interface (physical / virtual) for purchase of goods, services or investment products, and subsequently settles the collected funds to such merchants. PA is categorised as below:
  • i. PA – Physical (PA – P): PA that facilitates transaction(s) where both the acceptance device and payment instrument are physically present in close proximity while making the transaction.
  • ii. PA – Cross Border (PA – CB): PA that facilitates aggregation of cross-border payments for current account transactions, that are not prohibited under FEMA, for its onboarded merchants through e-commerce mode. There are two sub-categories of PA-CB:
    • PA-CB facilitating inward transaction
    • PA-CB facilitating outward transaction

  Note: (1) A non-bank entity authorised as AD Category-II, and facilitating current account transactions not prohibited under FEMA (other than purchase or sale of goods or service), shall not fall within the purview of PA – CB business. (2) A card transaction, where the foreign exchange settlement is facilitated by a card network and the aggregator receives the payment in local currency, is not part of PA – CB activity.

  • iii. PA – Online (PA – O): PA that facilitates transaction(s) where the acceptance device and payment instrument are not present in close proximity while making the transaction.
• j. Payment Gateway (PG): An entity that provides technology infrastructure to route and facilitate processing of a payment transaction without any involvement in handling of funds.
• k. Central KYC Records Registry (CKYCR), Officially Valid Document (OVD), equivalent e-document, digital KYC, and Video-based Customer Identification Procedure (V-CIP) shall have the same meanings as defined in RBI Master Direction DBR.AML.BC.No.81/14.01.001/2015-16 dated February 25, 2016 on ‘Master Direction - Know Your Customer (KYC) Direction, 2016’, as amended from time to time (hereinafter referred to as ‘MD on KYC’).

Chapter II

Authorisation and Capital Requirements

5. Authorisation for PA Business

• a. A bank does not require authorisation to carry out PA business.
• b. A non-bank entity shall seek authorisation for operating as a PA by submitting an application through RBI’s online portal. An entity, regulated by any of the financial sector regulator(s), shall apply along with a ‘No Objection Certificate’ (NOC) from such regulator(s), within 45 days of obtaining the NOC.
• c. A non-bank PA shall be a company incorporated in India under the Companies Act, 2013. The Memorandum of Association of the applicant entity should cover the proposed activity of operating as a PA.
• d. Following is applicable from the date of these Directions:
  • i. A PA having a Certificate of Authorisation (CoA) issued by RBI, and
    • already carrying on business as a PA-P – shall intimate RBI. A revised CoA shall be issued to the PA.
    • desirous of commencing business in another PA category – shall intimate RBI at least 30 days prior to commencing the new business.
  • ii. An entity, whose application for grant of CoA for PA-O or PA – CB is under consideration of RBI – shall intimate the Reserve Bank about its existing PA-P business, if any, through the online portal, by December 31, 2025.
  • iii. An entity carrying on only PA-P business shall apply for authorisation as prescribed in 5 (b) above, by December 31, 2025. An entity which fails to apply by the due date shall intimate its banker(s) forthwith and wind up its business by February 28, 2026.
• e. Application of an entity, not meeting the minimum capital requirement, or which is incomplete / not in the prescribed form, shall be returned.

6. Capital Requirements

• a. An entity seeking authorisation to commence or carry on PA business shall have a minimum net-worth of ₹15 crore at the time of tendering application for authorisation; and shall attain a minimum net-worth of ₹25 crore by the end of third financial year of grant of authorisation.
• b. The minimum networth, as applicable, shall be maintained by a PA on an ongoing basis.
• c. For the purposes of this MD, computation of net worth of an entity shall be guided by the directions in RBI circular DPSS.CO.AD.No.1344 02.27.005/2014-15 dated January 16, 2015 on ‘Computation of Net-worth’, as amended from time to time. In addition to the items provided in the said circular, “net worth” shall also include preference shares that are compulsorily convertible to equity. Compulsorily convertible preference shares can be either non-cumulative or cumulative, and they should be compulsorily convertible into equity shares and the shareholder agreements should specifically prohibit any withdrawal of this preference share capital at any time. Additionally, if Deferred Tax Assets have been included in any of the components, the same shall be deducted while arriving at the net-worth value.
• d. An entity, having Foreign Direct Investment (FDI), shall be guided by the Consolidated FDI Policy of the Government of India, and the relevant Foreign Exchange Management Regulations on this subject.
• e. An entity seeking PA authorisation shall submit a certificate in the enclosed format (Annexure 2.1) from their statutory auditor evidencing compliance with the applicable net-worth requirement while submitting the application for authorisation. A newly incorporated non-bank entity which may not have an audited statement of financial accounts shall submit a certificate in the enclosed format from their statutory auditor regarding current networth along with a provisional balance sheet as of recent date.