RBI issues regulations to govern payment aggregators in cross-border transactions
Reserve Bank of India (RBI) on Tuesday issued regulations aimed at governing entities that facilitate payment and settlement for online cross-border export/import transactions. These regulations encompass Payment Aggregators (PAs), which are entities that support the processing of domestic transactions in online mode.
The central bank's regulations aim to bring all entities involved in facilitating cross-border payment transactions for the import and export of goods and services under direct RBI regulation, considering the developments in cross-border payments.
This includes Authorised Dealer (AD) banks, PAs, and PAs-CB (Payment Aggregators for Cross-Border transactions).
Entities participating in the processing or settlement of cross-border payment transactions for import and export activities are required to adhere to these instructions, which may be updated over time by the RBI.
Payment gateways, which provide the technology infrastructure for online monetary transactions, have been facing challenges in obtaining payment aggregator licenses, with the RBI granting in-principle approvals but delaying final approvals for over a year. Some companies with in-principle authorization have also been prevented from onboarding new customers.
Payment Aggregators play a crucial role in enabling e-commerce sites and merchants to accept various payment instruments from customers and fulfill their payment obligations without needing to create their own systems.
