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RBI to regulate payment gateway providers

Thursday 7 February 2019 | 12:10 PM CET

Reserve Bank of India (RBI) has announced that it will regulate payment gateway service providers and payment aggregators.

Due to the new regulations, payment gateways such as Paytm, Mobikwik, Bharat Bill Pay, and others would have to adhere to RBI guidelines like other financial entities. Consequently, these gateways can be expected to become more transparent and accountable in their processes.

According to The Economic Times, in 2017 RBI said that intermediaries like aggregators and payment gateways that facilitate payment services and not authorised by the central bank, have to route their transactions through a nodal account opened with a bank under Reserve Bank's guidelines of November 24, 2009.

The 2009 guidelines asked for the maintenance of nodal accounts of intermediaries like payment gateway providers and payment aggregators. All accounts opened and maintained by banks facilitating collection of payments by intermediaries from customers or merchants will have to be treated as internal accounts of the banks. While it is left to the banks to decide on the exact nomenclature of such accounts, it shall be ensured that such accounts are not maintained or operated by the intermediaries, the publication continues.

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