PayU gets RBI's approval to operate as a payment aggregator

PayU, a digital payments service provider in India, has been granted an in-principle Payment Aggregator (PA) license by the Reserve Bank of India (RBI).

"We would like to thank the RBI for granting PayU the in-principle approval to operate as a Payment Aggregator. This validation by RBI fills us with joy as it paves the way for us to welcome new businesses onto our platform. This is also a testament to our relentless focus on compliance and corporate governance," Anirban Mukherjee, CEO of PayU, said.

PayU’s path to approval

Initially, PayU's application was rejected in January 2023 due to its complex corporate structure, prompting the RBI to request a reapplication.

The company, which is owned by Prosus and serves over 500,000 businesses in India, had to reapply for a PA license because of this complexity. After significant structural adjustments, including selling parts of its business to Rapyd, PayU refocused its efforts on becoming more centred on the Indian market.

Mukherjee highlighted this transition, saying, "Aligned with the government's Digital India initiative and the RBI's forward-thinking regulations, we are dedicated to driving digitization and financial inclusion, particularly for small merchants."

Onboarding new merchants

With the in-principle license, PayU is set to start onboarding new merchants soon. The license is a key element in PayU's strategy to establish a globally renowned digital payment infrastructure in India.

Mukherjee noted, "This license is pivotal in our mission to establish a globally renowned digital payment infrastructure rooted in India."

Venturing into the consumer credit sector

PayU is not just focusing on payment services but is also venturing deeply into the consumer credit sector. PayU Finance, its lending arm, offers various loan products, targeting predominantly the young and increasingly affluent demographic, as well as small and medium-sized businesses.

After receiving the final approval, which typically takes between six months to a year, PayU will join the ranks of other major players like Razorpay and CCAvenue.