PayU gets RBI nod to operate as online payment aggregator

Online payments services provider PayU Payments Private Limited has secured final authorisation from the Reserve Bank of India (RBI) to function as an online payment aggregator under the Payment and Settlement Systems Act, 2007.

With this licence, the company joins a cohort of fintech players officially cleared by the RBI to process online transactions on behalf of merchants.

"We are happy to announce that PayU Payments Pvt. Ltd. has received the final authorization from the Reserve Bank of India (RBI) to operate as an online payment aggregator under the Payment and Settlement Systems Act, 2007," a company spokesperson said in a statement.

"We are grateful to the RBI for granting us the opportunity to be a responsible contributor to India’s payments ecosystem. As we move forward, we remain dedicated to building a resilient, compliant, inclusive, and innovation-driven institution—one that serves merchants of all sizes and contributes meaningfully to the Digital India vision of the RBI and the Government."

The approval ends a long wait for PayU, which has operated its payments business while undergoing the formal licensing process. India’s central bank has tightened its scrutiny of payment aggregators in recent years, requiring them to meet stringent norms related to data localisation, risk management, and customer onboarding.

PayU, which is backed by Prosus, services more than 5 lakh businesses in India, ranging from large e-commerce platforms to small and medium enterprises. It offers digital payment collection through over 150 payment methods, including credit and debit cards, net banking, UPI, QR codes, wallets, and EMI options.

As part of its value proposition, PayU claims to offer "best-in-industry" success rates while ensuring a seamless checkout experience" for online merchants. The company also provides financing solutions, such as card-based and cardless EMI options, in an effort to make financial products more inclusive and affordable.

The RBI’s payment aggregator framework, formalised in 2020, aims to ensure that only well-capitalised and secure platforms are allowed to handle merchant payments at scale. Companies without a licence must wind down such operations or partner with authorised entities.