RBI lifts ban on Razorpay, Cashfree; allows onboarding new merchants

RBI lifts ban on Razorpay, Cashfree; allows onboarding new merchants

The Reserve Bank of India, RBI lifts ban on Razorpay and Cashfree after almost a year. The approval from the RBI empowers payment companies to add new merchants to their platform for facilitating online payment processing.

Cashfree Payments spokesperson said: “Securing the Payment Aggregator (PA) licence from the RBI is a pivotal moment for Cashfree Payments, affirming our focus on compliance and highlighting the significance of a well-regulated payments landscape. We are now onboarding new merchants on our payment gateway. We are very excited about this new phase of our journey, where we continue to drive exponential growth and retain our market leadership as the preferred aggregator in the payments space.”

Razorpay spokesperson said: “Having received the new PA licence, we now restart onboarding new customers and are committed to serving them with our industry-first payment solutions. We welcome this new development and are delighted to be one of the first Payment Gateways to have received the final PA licence from the RBI.”

Conclusion

In the previous year, the central bank directed Razorpay, Cashfree, PayU, and Paytm—entities with provisional approvals for payment aggregator licenses—to halt the inclusion of new merchants until they secure the final license.

PayU India has reapplied and is currently awaiting a decision, as stated by the company. There is no response from Paytm to Mint’s queries at this time.

RBI had instructed these aggregators to temporarily suspend the onboarding of new online merchants until additional documentation was provided. Since then, these companies have been engaged in ongoing discussions with the regulatory authority.

According to an official from the payment aggregator sector, Razorpay, PayU India, and Cashfree collectively held around 70-80% market share in terms of onboarding new merchant accounts.

With the top four players inactive for the past year, new merchants have turned to other dynamic players such as Infibeam Avenues, PhonePe, and others.

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