SabPaisa Gets RBI Nod To Operate As A Payment Aggregator

Payments solutions startup SabPaisa has received ‘in-principle’ approval from the Reserve Bank of India (RBI) to operate as a payment aggregator. 

The licence will enable SabPaisa to fill the ‘innovation gap’ and scale its offerings to onboard more merchants onto its fold. The authorisation will also enable the startup to bring ‘unification, inclusivity, experience and performance’ in the platform’s product suite.

“This authorisation reaffirms our vision and has acted as a catalyst in boosting us towards our mission to become one of the best fintech organisations in India. While we recognise the responsibility that this authorisation brings, our objective is to prepare ourselves to provide solutions and ensure that we remain competitive and future-ready,” said SabPaisa chief executive officer (CEO) and cofounder Pathikrit Dasgupta.

SabPaisa joins a small group of fintech startups including Infibeam Avenues, Razorpay, Mswipe and Pine Labs that have received the payment aggregator licence. So far, reports indicate that close to 185 fintech firms have applied for the coveted licence and giants such as MobiKwik’s Zaakpay, Swiggy, Zomato, and Google Pay could likely see their applications rejected.

Founded in 2016 by Pathikrit Dasgupta, Abhimanyu Jha, Rajiv Moti and Kumar Manish, SabPaisa operates a hybrid payment gateway platform that caters to a wide gamut of merchants. It also offers a software suite with products such as payouts and merchant-focused turnkey solutions 

The New Delhi-headquartered bootstrapped startup is still bootstrapped and has not raised any funding so far. The startup claims to have grown its revenue 2X in the past two fiscal years and caters to thousands of merchants including enterprises, banks, and government institutions. 

SabPaisa primarily competes with major players such as Razorpay, Stripe, Pine Labs and CCAvenue. 

The payment aggregator framework unveiled by the RBI in March 2020 mandates all payments gateway operators to have a licence in order to — acquire merchants and deploy digital payments solutions.

While hundreds of players have sought the licence, the stringent norms have seen RBI purportedly rejecting more than 100 applications so far. 

This also comes nearly a month after RBI said that online payment aggregator guidelines will be extended to offline players as well. Interestingly, SabPaisa offers hybrid payment services which also include offline payment gateway services.

The digital payments space has been witnessing a major boom in the past few years owing to the larger penetration of the internet and smartphones. The percolation of payment services such as the unified payments interface (UPI) has also led to a major spurt in the industry’s growth. 

As a result, the digital payments gateway industry has grown manifold. According to a report, the Indian payment gateways market was pegged at $ 1.2 Bn in 2021 and is projected to grow to $ 2.68 Bn by 2027.