PayU Granted Approval to Onboard New Customers: RBI Lifts Moratorium, Invites Applications for New License

Nearly 15 months after its application, the Reserve Bank of India (RBI) has sanctioned fintech firm PayU to function as a Payment Aggregator (PA) and onboard new merchants. This significant approval isn’t a final license but allows companies to operate for a period ranging from 6 to 12 months.

In January 2023, the banking regulator had initially rejected the fintech firm’s application to operate as a payment aggregator due to its complex corporate structure. It had advised them to reapply, which they did subsequently. Following this saga, PayU had to halt adding new merchants for its online aggregation business.

Restrictions Lifted on Paytm, Razorpay, and Cashfree

A ban was imposed on Paytm, Razorpay, and Cashfree, but later, similar restrictions were lifted, with Razorpay and Cashfree receiving approval in December of the same year. 

Sources close to the matter have indicated that CRED, another fintech company, has also been granted approval by the RBI to operate as a payment aggregator.

Third-Party Service Providers as Payment Aggregators

A payment aggregator is a third-party service provider that enables customers to make online payments and allows businesses to accept payments. 

Payment aggregators provide the convenience of payment through various modes such as debit cards, credit cards, cardless EMI, UPI, bank transfers, and e-wallets.

PayU India’s Financial Performance in FY24

In the first six months of FY24, PayU India recorded a revenue of ₹1,757 crore. In the financial year 2022-23, the company had earned $399 million (approximately ₹3,323 crore), marking a significant increase of 31% compared to the previous financial year 2021-22.

During the same period of FY23-24 (April 23-September 23), the company’s revenue from core payment business witnessed a growth of 15%, reaching $211 million (approximately ₹1,757 crore).