PayU Receives RBI’s Nod to Operate as Payment Aggregator

• ByStartupStory     |    April 24, 2024

PayU Payments, backed by global internet group Prosus, has been granted in-principle approval by the Reserve Bank of India (RBI) to operate as a payment aggregator. This approval allows PayU to resume onboarding new merchants on its platform, ending a year-long wait marked by regulatory hurdles.

The application by PayU was initially rejected by the RBI due to its “complex corporate structure,” prompting the firm to halt the addition of new merchants to its payment aggregation services. This clampdown was part of a broader RBI initiative to enhance oversight in the online payments sector, which also affected other major players like Paytm, Razorpay, and Cashfree. These firms were instructed to increase monitoring of transaction-related activities and ensure compliance with new guidelines.

PayU stood out as the only major payment firm left in limbo, eagerly waiting for the green light from the RBI. The approval finally came, and PayU’s CEO, Anirban Mukherjee, expressed his satisfaction, stating, “The RBI’s approval is a testament to our relentless focus on compliance and corporate governance.”

Mukherjee further elaborated on the implications of the license for PayU’s strategic objectives: “This license is pivotal in our mission to establish a globally renowned digital payment infrastructure rooted in India. Aligned with the government’s Digital India initiative and the RBI’s forward-thinking regulations, we are dedicated to driving digitization and financial inclusion, particularly for small merchants.”

PayU, a prominent player in the payment gateway sector, provides a variety of financial services, including buy-now-pay-later options. It competes with other well-known firms such as Razorpay, which is supported by Tiger Global, and PhonePe, owned by Walmart.

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