Why Did Instamojo Lose Its Payment Aggregator License?

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Instamojo, originally, was established as a payment solutions provider for SMEs in 2012. Later it introduced an ecommerce software platform in 2021.

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The company offers software to assist businesses in establishing online stores while providing essential services such as branding, analytics, and shipping.

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Since its inception, Instamojo had raised $15.2 Mn from notable names like Mastercard, Gunosy Capital, Kalaari Capital, and Blume Ventures.

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Even after diversified offerings & trust from marquee investors, RBI canceled Instamojo’s and others’ PA. So what went wrong?

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RBI guidelines on PAs necessitated that the licence holders must maintain a net worth of INR 15 Cr for the 1st two financial years, and INR 25 Cr after that.

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This is not a one time criteria, Payment aggregators must consistently adhere to these prerequisites.

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License holders must submit monthly reports related to transaction statistics, frauds, cyber threats on 7th every month, along with many other compliances.

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Non-compliance can lead to penalties and potential license suspension, and in the case of Instamojo and others, they failed to meet the criteria.

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Read the full story of Instamojo’s fallout and RBI’s regulation here:

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