RBI Lifts Ban on Razorpay and Cashfree, Allowing New Merchant Onboarding
- ByStartupStory | December 20, 2023
The Reserve Bank of India (RBI) has lifted the ban on payment aggregators Razorpay and Cashfree after almost a year. This move by the RBI authorizes the payment companies to onboard new merchants onto their platforms for processing online payments.
A spokesperson from Cashfree Payments expressed their excitement, stating, “Securing the Payment Aggregator (PA) licence 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. We are now onboarding new merchants on our payment gateway. We are very excited about this new phase of our journey, where we continue to drive exponential growth and retain our market leadership as the preferred aggregator in the payments space.”
Similarly, a spokesperson from Razorpay remarked, “Having received the new PA licence, we now restart onboarding new customers and are committed to serving them with our industry-first payment solutions. We welcome this new development and are delighted to be one of the first Payment Gateways to have received the final PA licence from the RBI.”
Previously, the RBI had instructed Razorpay, Cashfree, PayU, and Paytm, which held in-principal approvals for the payment aggregator licence, to stop onboarding new merchants until they obtained the final licence. Paytm and PayU India are still awaiting clarification. “We have resubmitted our application and are waiting for a decision,” said PayU India.
Last year, the RBI had asked these aggregators to temporarily withhold onboarding new online merchants until additional documents were submitted. The companies had been in constant talks with the regulator ever since.
According to a payment aggregator official, Razorpay, PayU India, and Cashfree accounted for about 70-80% market share in terms of onboarding new merchant accounts. With these top four players out of action for the past year, new merchants have been turning to other aggressive players such as Infibeam Avenues, PhonePe, and others.
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