PayU Receives RBI Approval to Operate as Payment Aggregator in India

PayU, a leading digital financial services provider in India, has received in-principle approval to operate as a payment aggregator in 2024. This authorization allows PayU to start onboarding new merchants on its platform as it aims to establish a globally recognized digital payment infrastructure rooted in India.

Anirban Mukherjee, CEO of PayU, expressed appreciation for the RBI's trust, stating, "This license is critical in our mission to establish a globally recognized digital payment infrastructure rooted in India. We are aligned with the government's Digital India initiative and the RBI's forward-thinking regulations, and are dedicated to driving digitization and financial inclusion, particularly for small merchants."

The RBI's approval comes after PayU had to reapply for the license following an initial rejection due to concerns over its complex corporate structure. The fintech firm paused onboarding new merchants during this period. The central bank has been actively regulating various fintech segments in recent years, including payment aggregators and peer-to-peer lending.

PayU is one of the latest fintech firms to receive the RBI's nod, along with others like Razorpay, Cashfree, and Cred. The company has a base of over 500,000 merchants in India across its payments, credit, and PayTech businesses, generating over $60 billion in annualized transaction volumes. PayU's Indian entity reported more than 30% growth in revenue to $400 million (Rs 3,300 crore) for the financial year ended in March 2023.

Why this matters: The RBI's approval to operate marks a significant achievement for PayU and the digital payments landscape in India. It enables the company to expand its payment processing capabilities, offer a wider range of services to merchants, and contribute to the government's vision of a digitally empowered economy. The move also underscores the RBI's proactive approach in regulating the fintech sector to ensure secure and efficient digital transactions.

Mukherjee emphasized that PayU has attracted tremendous interest from businesses across sectors and sizes to join its platform. The company is dedicated to building a world-leading digital payment infrastructure that originates from India, for India and the world, accelerating its next growth phase. PayU aims to create a full-stack digital financial services platform to serve the financial needs of customers through technology solutions, enabling businesses to collect digital payments across 150 online payment methods.

Key Takeaways

• PayU receives in-principle approval from RBI to operate as a payment aggregator.
• This allows PayU to onboard new merchants on its platform to build a globally recognized digital payment infrastructure.
• PayU had to reapply for the license after initial rejection due to concerns over its corporate structure.
• PayU is one of the latest fintech firms to receive RBI's nod, along with Razorpay, Cashfree, and Cred.
• The RBI's approval enables PayU to expand its payment processing capabilities and contribute to India's digital economy.