Bengaluru-based fintech startup Cred has received in-principle approval from the Reserve Bank of India (RBI) to venture into the payment aggregation business. The approval allows the fintech firm to intensify its presence in the merchant payments domain.
Following the initial approval from the RBI, it usually takes six months for a company to secure the final authorisation.
Under the RBI’s framework, payment aggregators are empowered to oversee funds via an escrow account while providing value-added services alongside payment processing. Draft guidelines from the regulator suggest stringent Know-Your-Customer (KYC) protocols for merchants.
In addition to online merchant payments, Cred is forging ahead with plans to establish an offline payments arm featuring QR code-based ‘scan and pay’ transactions at retail establishments.
In addition, the fintech may need to pursue a separate application for the payment aggregator-point of sale (PA-P) license. Clarity on the application process is expected upon the release of final guidelines.
