In a significant move, the Reserve Bank of India (RBI) has granted final approval to fintech firms Juspay, Decentro, and software-as-a-service (SaaS) company Zoho to operate as payment aggregators.
The decision places them alongside established names such as Stripe, Zomato, Tata Pay, Razorpay, and Cashfree, who have previously received the regulator's nod.
The approvals was issued on February 6, 2024.
What does this approval mean for companies?
For Juspay and Decentro, both fintech startups, and Zoho, a SaaS enterprise, this approval is a gateway to expanding their services in the ecommerce sector.
Juspay, known for its payment gateway services, and Decentro, which facilitates ecommerce and consumer-facing players with financial services, are poised to enhance their offerings. Zoho's achievement is notable as it became the first enterprise SaaS player to receive the payment aggregator license from the RBI.
The impact on the fintech ecosystem
The RBI's decision is part of its broader initiative to regulate digital banking platforms, aiming to protect customers and ensure the security of financial offerings. Payment aggregators play a pivotal role by acting as intermediaries between customers and merchants, facilitating online payments through various methods.
The approval is expected to foster innovation and compliance within the fintech ecosystem, as companies like Juspay and Decentro look forward to entering new growth phases and expanding their operations.
Pratik Daudkhane, said, "The Reserve Bank's inputs helped shape our payments business while adhering to the highest standards of compliance & security. This is a crucial step for us to enter the next growth phase."
RBI's cautious approach
The RBI's cautious approach in issuing payment aggregator licenses, with stringent criteria, has led to a selective approval process. While some companies like PhonePe, Infibeam, Pine Labs, and Easebuzz await their final nod, others have seen their applications returned.
However, the recent approvals signal a positive trend for the fintech industry, with expectations of more companies receiving the green light in the coming months.
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