Razorpay and Cashfree will be able to work as payment aggregators, RBI approved

Payment processing companies Razorpay and Cash Free have received final approval from the Reserve Bank to work as payment aggregators. Both the companies have given information about this. Cash Free said that now they will be able to add new merchants to their platform, while Razorpay informed that it has received approval from the Reserve Bank and they are now starting to add their customers to the platform again. Apart from this, Neobank Open, Enkash and Paymentz have also received approval from the Reserve Bank.

The ban imposed a year ago was lifted

Just a year ago, on the instructions of the Reserve Bank, Razorpay and other payment aggregators had banned adding new customers on their platforms. This ban was imposed on them till the final approval of the Reserve Bank, which has now been received. This approval has come as a big relief for the companies who were bearing the pressure of increasing competition in this sector while waiting for the approval. These companies were changing their way of working and preparing alternative business models so that the income could continue.

What are payment aggregators?

Payment aggregators give merchants an easy option to get paid. These are third party service providers who add the merchants to their platform and give them the option to receive payments from customers. These become a link of payment between the customer and the merchant. Because payment aggregators handle funds, they require a license from the Reserve Bank. Although only non-banking payment aggregators require a license, bank PAs do not require a separate license because the approval to handle funds is already included in the banking license.