PayU receives in-principal approval from RBI

At the beginning of March 2020, the RBI issued guidance on regulating the activities of payment aggregators, as well as delivering technology-related recommendations to payment gateways. The decision came after the regulator released a discussion paper in September 2019, where it recognised the role of intermediaries in electronic and online payment methods. As of the announcement, online non-bank payment aggregators were required to apply to RBI by September 2021 to seek authorisation, with an extension to September 2022. Since then, several companies obtained authorisation, including Amazon Pay India, CAMS, Google India, Reliance Payment Solutions, and Zomato Payments, among others.

Concerning PayU, RBI instructed the online payment gateway to reapply for its licence in January 2023, according to Economics Time India. At that time, PayU was asked to reapply within three months of receiving RBI’s response to its initial application, which was supposedly denied due to the fintech’s complex corporate structure. Until receiving its approval, the company was prohibited from onboarding new merchants on its platform, however, services continued as usual for existing users.

Providing solutions that focus on meeting the digital payment requirements of the Indian market, PayU intends to develop a full-stack digital financial services platform that serves the financial needs of customers, including ecommerce brands, banks, and customers. Currently, the company delivers payment gateway solutions to online businesses via its technology, allowing firms to collect digital payments across more than 150 online payment methods, such as credit cards, debit cards, net banking, EMIs, QR, UPI, and wallets, among others.

Shortly before the current announcement, PayU partnered with PayPal to improve cross-border payments for India-based merchants. The company was set to merge its suite of solutions and knowledge with PayPal, in a bid to optimise the cross-border payment experience for merchants and traders in the region. Additionally, PayU intended to utilise PayPal ISU 2.0 Checkout to provide customers with access to a more tailored, secure, and inclusive payment experience.

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