RBI Issues Master Direction on Regulation of Payment Aggregators: Strengthens Rules on KYC, Cross-Border Transactions [Read Notification]
RBI laid down a unified regulatory framework for payment aggregators covering authorisation, KYC, escrow, and cross-border rules.
![RBI Issues Master Direction on Regulation of Payment Aggregators: Strengthens Rules on KYC, Cross-Border Transactions [Read Notification]](https://images.taxscan.in/h-upload/2025/09/17/2088139-rbi-payment-aggregator-rules.webp "RBI Issues Master Direction on Regulation of Payment Aggregators: Strengthens Rules on KYC, Cross-Border Transactions [Read Notification]")
The Reserve Bank of India (RBI) issued notification dated September 15, 2025, announcing a new Master Direction on Regulation of Payment Aggregators (PAs). This comprehensive framework replaces earlier guidelines issued in March 2020, March 2021, and October 2023, and sets uniform rules for regulating bank and non-bank payment aggregators, including those handling cross-border payments.
Key Provisions
1. Authorisation & Capital
- Banks do not need RBI authorisation to run PA business.
- Non-bank PAs must:
- Be incorporated in India under the Companies Act, 2013.
- Apply for authorisation through RBI’s portal.
- Maintain Rs. 15 crore net worth at application stage, and Rs. 25 crore within 3 years.
2. Categories of PAs
- PA-P (Physical): For face-to-face transactions.
- PA-O (Online): For e-commerce and remote transactions.
- PA-CB (Cross-border): For inward and outward forex payments (max. transaction value Rs. 25 lakh).
3. KYC & Merchant Due Diligence
- PAs must carry out full KYC and background checks on merchants.
- Simplified norms for small merchants (turnover below Rs. 40 lakh, export turnover below Rs. 5 lakh).
- Non-bank PAs must register with FIU-IND and comply with anti-money laundering obligations.
4. Escrow & Settlement
- Non-bank PAs must keep customer collections in a dedicated escrow account with a scheduled commercial bank.
- Cross-border PAs must maintain separate:
- Inward Collection Account (InCA), and
- Outward Collection Account (OCA).
- Permitted debits: settlement to merchants, refunds, promotional payouts.
- The “Core Portion” of escrow balances (the lowest average fortnightly balance over 26 fortnights) can earn interest but cannot be used for loans.
5. Governance & Security
- PAs must be professionally managed with directors meeting fit and proper criteria.
- Required to maintain:
- Dispute resolution frameworks with clear refund timelines.
- Cyber security and fraud prevention systems.
- Annual cyber security audits by CERT-In empanelled auditors.
- Must comply with PCI-DSS standards and RBI’s data localisation norms.
Repealed Circulars
The Master Direction formally repeals several earlier circulars, including the 2010, 2013, and 2015 FEMA circulars on online payment gateways, and the 2020 and 2021 PA guidelines, bringing them under this new unified regulation.
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