The central bank is expected to soon release the list of firms that have been granted approvals: Report
185 fintech firms, including big names such as CRED, Razorpay and PhonePe, have reportedly submitted proposals to acquire the licence
Earlier this month, Razorpay, Stripe, Pine Labs and 1Pay Mobileware reportedly received the payment aggregator licence
Update | July 26, 07:18 PM
In a statement, Innoviti confirmed that it has received an ‘in-principle’ authorisation from the RBI to operate as a payment aggregator.
“We are excited to receive an in-principle authorisation from RBI to operate as a payment aggregator under the Payments & Settlements Act…We are cognizant of the responsibility that this authorisation brings, to not only continue to innovate and contribute to digital payments growth, but to do so through solutions that are safe, secure and value additive to the ecosystem,” Innoviti CEO Rajeev Agrawal said.
Original Story | Published On July 26, 6:00 AM
Digital payments solutions startup Innoviti has reportedly received an ‘in-principle’ nod from the Reserve Bank of India (RBI) to commence operations as a payment aggregator.
The news was reported by Economic Times quoting people familiar with the matter. The central bank is expected to soon release the list of firms that have been granted approvals.
As per the report, as many as 185 fintech firms, including big names such as CRED, Razorpay and PhonePe, have submitted proposals to acquire the payment aggregators licence.
Earlier this month, the RBI granted the licence to Razorpay, Pine Labs and Stripe. Additionally, another payments startup 1Pay Mobileware also reportedly received approval to operate as a payments aggregator.
Incorporated in 2002, the Bengaluru-based startup offers point of sale (PoS) terminals and enables retail enterprises to process card payments. The fintech platform also provides customer relationship management (CRM) solutions to retailers, processing more than $10 Bn in purchase volume annually.
Innoviti claims to have a presence across 25,000 retail stores in 2,000 cities, handling 90 Mn customer purchases every year.
Innoviti recently announced raising $45 Mn via a mix of debt and equity as part of its Series D round led by Singapore-based Panthera Growth Partners.
Who Gets The Licence?
The much touted payment aggregator framework was unveiled by the central bank in March 2020. Under this, all payment gateways are required to have a licence in order to acquire merchants and to deploy digital payments solutions.
As a result, a slew of companies have made a beeline to apply for the licence and have made presentations before the central bank. Under the requirements set by the RBI, payment aggregators are expected to have a net worth of INR 15 Cr on the date of their application, or as of FY21.
The companies will also be required to show a net worth of INR 25 Cr by the end of FY23.
Meanwhile, the central bank has tightened its norms as to which companies can offer services as payment aggregators.
The central bank has been strict in evaluating companies, with applicants being under the RBI lens for their previous brushes with the law including past dealings with crypto and flouting know your customer (KYC) norms.
Companies such as Zaakpay and payment gateway arm of MobiKwik have reportedly seen their application being rejected by the central bank over similar issues. Once rejected, merchants will have three months to stop using the services of companies whose licences have been rejected.
According to Statista, 3.6 Mn PoS terminals were deployed across the country in 2015. This number is expected to surge to more than 22.6 Mn terminals by fiscal year 2025.