RBI gives PayU permission to function as a payment aggregator

The Reserve Bank of India has given PayU permission in principle to function as a payment aggregator, facilitating the onboarding of new merchants. The RBI's action comes after it was previously rejected because of PayU's intricate organisational structure. This permission is in line with the RBI's recent proactive regulation of the fintech industry. PayU is the latest company to receive a similar nod, joining Razorpay and Cashfree on the list.

As per a report, Cred also received payment aggregator license but the official confirmation is awaited from both sides (RBI and Cred). PayU is one of the fintech firms along with MobiKwik, Pine Labs, and Navi among others, which have been eyeing initial public offerings.

In India, PayU has a base of over 5,00,000 merchants across three business sectors – payments, credit, and PayTech. It also claims to generate over $60 billion in annualised volumes (read as total transaction volume or TPVs).

PayU’s Indian entity reported more than 30% growth in its revenue to $400 million (Rs 3,300 crore) for the financial year ended in March 2023. Even in the current fiscal, the firm maintained the show with $211 million (Rs 1,700 crore) in revenue from Indian operations.

Back in January 2023, the apex banking body (RBI) had asked PayU to reapply for the license and consequently, the Prosus-controlled firm had to halt onboarding new customers. As per reports, the fintech firm’s complex corporate structure was one reason behind the rejection.