Open receives RBI's final nod for payment aggregator licence
The company had received an in-principle approval from RBI for a Payment Aggregator/Payment Gateway (PA/PG) licence in 2022.
Bengaluru fintech startuphas received final approval from the Reserve Bank of India (RBI) to operate as a Payment Aggregator/Payment Gateway (PA/PG).
The company had received an in-principle approval from RBI for a Payment Aggregator/Payment Gateway licence in 2022.
"We are elated to receive the Payment Aggregator/Payment Gateway licence from the RBI. This approval not only acknowledges our dedication to regulatory standards but also signifies a significant leap in fortifying our commitment to SMEs," Open’s Co-founder and CEO Anish Achuthan said.
"The enhanced capabilities will bolster our financial automation platforms, providing SMEs with advanced tools to streamline their financial operations and thrive in the digital era. We are grateful to the RBI for their evaluation and recognition of our contribution."
RBI has been actively engaged in regulating digital banking platforms to safeguard customers, restrict unethical recovery practices, and enhance the security of financial offerings.
To achieve these objectives, the bank implemented various guidelines, including limiting lending through prepaid payment instruments (PPI) like prepaid cards and wallets, prohibiting short-term loan securitisation, and closely scrutinising the issuance of licenses.
On Tuesday, RBI also lifted a year-long embargo on Razorpay and Cashfree Payments, allowing the companies to resume their online payment aggregator operations and onboard new merchants.
Razorpay and Cashfree Payments had received notices from the Reserve Bank of India instructing them to temporarily pause onboarding new online merchants on their platforms until they submit audit reports demonstrating compliance with regulations for payment PA/PG. Similar notices were sent to Pine Labs and Stripe as well.
Launched in August 2017 by Anish Achuthan and Mabel Chacko, along with Deena Jacob and Ajeesh Achuthan, Open is a neobanking platform dedicated to assisting small businesses in handling cash flows, automating accounting, and accessing credit lines.
In May 2022, Open raised $50 million in a Series D round from IIFL, along with existing investors Temasek Holdings, Tiger Global Management, and 3one4 Capital, becoming the 100th unicorn in India.
Edited by Affirunisa Kankudti