TLDR: In today’s fast-paced world, digital transactions have become the lifeline of businesses. From online shopping to paying bills, customers expect seamless payments. But here’s the catch—only those with a Payment Aggregator (PA) License can legally handle such payments. If you're planning to start your own payment gateway business, this guide will walk you through every step to get that coveted PA license from the Reserve Bank of India (RBI).
 

What is a Payment Aggregator?

A Payment Aggregator (PA) acts as a bridge between merchants and customers, collecting funds from customers on behalf of businesses and transferring them to the merchant’s account after deducting processing fees. Think of it as the "middleman" for online payments. PAs provide merchants with various payment modes, including:

  • Credit/Debit Cards

  • Net Banking

  • UPI (Unified Payments Interface)

  • Wallets and more.

This simplifies payments by allowing businesses to avoid integrating multiple gateways. For example, platforms like Razorpay and PayU use PA services to enable online merchants to accept payments seamlessly.

Think of a payment aggregator as the bridge that connects customers to merchants during online transactions. Instead of merchants having to deal directly with multiple banks or payment networks, a PA simplifies everything.

Imagine buying something online. You pay with your credit card or UPI, and the aggregator collects the payment on behalf of the merchant. After deducting service charges, the aggregator transfers the remaining amount to the merchant. It’s all about convenience, security, and speed.
 

Payment Aggregator vs. Payment Gateway

While often confused, payment gateways only facilitate the transaction, whereas payment aggregators handle the collection, settlement, and disbursement of payments. If you’re aiming to handle customer funds, you’ll need a Payment Aggregator License—a step beyond just running a payment gateway.
 

Why is a Payment Aggregator License Necessary?

In 2020, the Reserve Bank of India (RBI) made it mandatory for payment aggregators to get licensed to safeguard customer funds and ensure secure online transactions. A PA license ensures:

  • Accountability and Transparency: Only companies with the required financial stability can operate.

  • Secure Payment Handling: Compliance with data security standards protects customer information.

  • Trust and Credibility: Merchants and customers prefer working with licensed aggregators.

With the booming digital payment sector, having this license gives your business the credibility to handle sensitive customer data and manage financial transactions efficiently.
 

Step-by-Step Guide to Obtaining a Payment Aggregator License

Step 1: Check the Eligibility Criteria

  1. Company Registration

    • Your business must be registered under the Companies Act, 2013.

    • Only public or private limited companies can apply; sole proprietorships and partnerships are not eligible. 

  2. Net Worth Requirements

    • New Applicants: A minimum net worth of INR 15 crores (approximately USD 2 million) is required at the time of application.

    • Existing Payment Aggregators: The net worth must increase to INR 25 crores (USD 3.3 million) within three years of obtaining the license.

      This net worth ensures that aggregators have the financial capacity to handle and process customer payments reliably.

  3. Compliance with Data Security Standards

    • Aggregators must adhere to PCI DSS (Payment Card Industry Data Security Standard) and implement robust fraud detection systems.

    • Securing customer payment data is a non-negotiable requirement.

  4. KYC and AML Compliance

    • PAs must comply with Know Your Customer (KYC) and Anti-Money Laundering (AML) guidelines.

    • This helps identify users, prevent fraud, and monitor suspicious activities effectively.

Step 2: Gather the Required Documents

Here is a checklist of documents you’ll need to submit to RBI for the license:

  1. Company Incorporation Certificate – Proof of your company’s legal existence.

  2. Memorandum of Association (MoA) and Articles of Association (AoA) – Defining the company’s objectives and rules.

  3. Net Worth Certificate – Certified by a chartered accountant to show financial eligibility.

  4. Board Resolution – Authorizing the license application.

  5. Detailed Business Plan – Outlining services, customer onboarding, risk management strategies, and growth projections.

  6. KYC/AML Policy Documents – Highlighting your processes to ensure compliance.

  7. Proof of PCI DSS Compliance – Verifying your data security standards.

Step 3: Submit the Application to RBI

Once your documents are ready, you can submit your application either through the RBI's official portal or by post. Ensure your application is complete and accurate, as any discrepancies could lead to delays.

Step 4: RBI Review and Approval Process

After submission, the RBI will conduct a thorough review. Here’s what to expect:

  • Document Verification: RBI will confirm that your documents meet the eligibility criteria.

  • Business Model Evaluation: RBI will assess your operational strategy and compliance framework to ensure sustainability.

  • Site Visit or Interview: RBI may schedule a visit or meeting to better understand your business operations.

The entire approval process may take several weeks to a few months, depending on the complexity of your application and RBI’s workload.

Step 5: Obtain the Final License

Once approved, you’ll receive the Payment Aggregator License, officially authorizing you to operate as a payment aggregator in India. With this, you can start offering services such as multi-channel payment acceptance (cards, UPI, wallets, etc.) and merchant settlements.
 

Post-License Obligations

Securing the license is just the beginning. You’ll need to comply with several ongoing requirements to maintain it.

  1. Maintain Minimum Net Worth

    • After licensing, you must consistently maintain a net worth of INR 25 crores to retain your PA license.

  2. Data Security Compliance

    • Continuous adherence to PCI DSS and other security measures is mandatory to avoid breaches.

  3. Annual Audits

    • Your company must undergo an annual audit by a certified auditor to ensure financial and operational compliance with RBI guidelines.

  4. Periodic Report Submission

    • You’ll need to submit regular financial and operational reports to RBI, detailing key metrics and compliance measures.
       

Market Overview of Payment Aggregators in India

  • RBI's Vision: India saw over 10 billion UPI transactions in September 2023, and RBI aims for 100% digital transactions by 2030.

  • Key Players: Razorpay, PayU, and Instamojo are dominating the payment aggregator space.

  • Booming Market: The Indian digital payments market is expected to reach $10 trillion by 2026, offering immense growth opportunities for licensed aggregators.

Given the above trends, obtaining a Payment Aggregator License can position your business to thrive in this evolving financial landscape.
 

Renewal and Suspension of License

The Payment Aggregator License is typically issued for a specific period. After expiry, you’ll need to renew it by submitting a renewal application to the RBI.

License Suspension:
Failure to comply with ongoing obligations can result in penalties, suspension, or revocation of your license.
 

Challenges Faced by Payment Aggregators in India

Despite the promising growth, aggregators face several challenges:

  1. Regulatory Compliance: Staying updated with RBI regulations requires constant monitoring.

  2. Cybersecurity Risks: With increasing online transactions, payment aggregators need to invest heavily in fraud prevention tools.

  3. Competition: The market is competitive, with players like PayU and Razorpay setting high benchmarks.

  4. Capital Requirements: Maintaining a net worth of INR 25 crores can be difficult for smaller businesses.
     

Benefits of Having a Payment Aggregator License

  1. Credibility and Trust: Licensed aggregators gain the trust of merchants and customers.

  2. Business Opportunities: With digital payments growing, the potential for growth is enormous.

  3. Direct Access to Payment Networks: Licensed aggregators get priority access to banks and payment gateways.
     

Why Choose Corpzo for Your Payment Aggregator License Application?

Navigating the regulatory landscape of RBI can be challenging, but Corpzo makes it simple. Our experts provide end-to-end support in documentation, compliance, and submission to ensure a seamless application process.

We help businesses stay compliant with PCI DSS standards and RBI guidelines, saving you time and effort. Whether you are a startup or an established enterprise, Corpzo ensures that you achieve your licensing goals smoothly.

Call +91 9999 139 391 or WhatsApp for a free consultation today!
 

Conclusion

Obtaining a Payment Aggregator License in India requires thorough preparation, compliance with RBI guidelines, and maintaining operational transparency. While the process may seem complex, following this step-by-step guide will make your journey much smoother.

With India’s digital economy booming, becoming a licensed payment aggregator opens doors to exciting business opportunities. Stay compliant, secure your operations, and position your company for long-term growth in the digital payments ecosystem.