RBI Lifts Ban on Razorpay and Cashfree, Allows Onboarding of New Merchants
In a significant development, the Reserve Bank of India (RBI) has lifted the ban on payment aggregators Razorpay and Cashfree, allowing them to resume onboarding new merchants onto their platforms for processing online payments. The central bank's authorization marks a pivotal moment for these payment companies, affirming their focus on compliance and regulatory adherence.
Last year, the RBI had directed Razorpay, Cashfree, PayU, and Paytm—each holding in-principle approvals for payment aggregator licenses—to cease onboarding new merchants until they obtained the final license. The move was part of the regulatory process to ensure that payment aggregators operate in compliance with the necessary guidelines and standards.
Positive Response from Payment Companies:
Cashfree Payments and Razorpay expressed their enthusiasm about receiving the Payment Aggregator (PA) license from the RBI. The license empowers these companies to onboard new merchants on their payment gateways, reinforcing their commitment to providing efficient and well-regulated payment solutions.
Cashfree Payments spokesperson stated, "Securing the PA license from the RBI is a pivotal moment for Cashfree Payments, affirming our focus on compliance and highlighting the significance of a well-regulated payments landscape."
Razorpay's spokesperson added, "Having received the new PA license, we now restart onboarding new customers and are committed to serving them with our industry-first payment solutions."
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Awaiting Clarification:
While Razorpay and Cashfree have received the green light to onboard new merchants, Paytm and PayU India are still awaiting clarification. PayU India mentioned, "We have resubmitted our application and are waiting for a decision."
Market Dynamics:
Before the ban, Razorpay, PayU India, and Cashfree collectively accounted for approximately 70-80% of the market share in terms of onboarding new merchant accounts. During the past year, as these major players were temporarily inactive, new merchants turned to alternative aggressive players like Infibeam Avenues, PhonePe, and others.
While Razorpay and Cashfree have received the green light to onboard new merchants, Paytm and PayU India are still awaiting clarification. PayU India mentioned, "We have resubmitted our application and are waiting for a decision."
Market Dynamics:
Before the ban, Razorpay, PayU India, and Cashfree collectively accounted for approximately 70-80% of the market share in terms of onboarding new merchant accounts. During the past year, as these major players were temporarily inactive, new merchants turned to alternative aggressive players like Infibeam Avenues, PhonePe, and others.
