SUMMARY
As per RBI website, the central bank greenlit the company’s application on February 20
The company said that the licence will allows it strengthen its distribution channels and deliver innovative solutions for merchants and customers
In total, RBI has granted the PA licence to 10 applicants in 2024 so far including names such as JusPay, Stripe, Tata Payments, Mswipe, among others
Ecommerce giant Amazon’s fintech arm, Amazon Pay, has received authorisation from the Reserve Bank of India (RBI) to operate as a payments aggregator (PA).
As per RBI website, the central bank greenlit the company’s application on February 20. With this, Amazon Pay joins a growing list of companies that have received the coveted licence this year so far.
In total, RBI has granted the PA licence to 10 applicants in 2024 so far including names such as JusPay, Stripe, Tata Payments, Mswipe, among others.
“We remain committed to simplify lives and fulfil (the) aspirations of merchants and customers. This (license) allows us to further strengthen our distribution channels and deliver innovative solutions for our merchants and customers across India providing them with secure, convenient, and rewarding digital payment experiences,” a Amazon Pay told Moneycontrol.
It is pertinent to note that Amazon Pay already holds a prepaid payment instrument (PPI) licence, which the RBI granted to the ecommerce major back in 2017.
Introduced in March 2020, under the payment aggregator framework, all payment gateway operators need to obtain a licence to acquire merchants and deploy digital payment solutions. The licence also enables PAs to pool funds received from customers and transfer them to merchants post a certain time period.
This nod comes at a time when the central bank has tightened its scrutiny around fintech startups amid rising cases of lax corporate governance guardrails and compliance issues. Just recently, the RBI imposed curbs on Paytm Payments Bank and barred it from operating UPI and other services post March 15.
The approval also came just two days ahead of the Finance Minister Nirmala Sitharaman’s much awaited meeting with fintech players. At the meeting, she assuaged the sector stakeholders and underscored the need to strictly adhere to regulatory norms and local laws.
Overall, Amazon Pay operates in the consumer-facing segment of the fintech sector. Buoyed by dirt cheap internet and smartphones, more and more Indians are jumping on the digital bandwagon and experiencing digital financial services.
This has given a major push to the homegrown fintech economy, especially the digital payments ecosystem, which has grown by leaps and bounds. As per Inc42 data, the digital payments sector is projected to soar to a market size of $253 Bn by 2030.
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