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Payment Aggregators such as Paytm and Razor Pay now comes under RBI Norms – 30.03.2020

As per the news published in ET, the RBI has directed to payment gateways aggregators such as Paytm and RazorPay, to comply with the regulation of Payment and Settlement Systems Act (2007). Under this act, the following is needed to comply.

a) The minimum Net-Worth of Payment gateway to be 15 Cr.

b) Strict Governance, Operational, and Fit and Proper norms for the board of directors, similar to what we see in Banks.

c) Mandatory compliance on technology and cyber-security requirements at par with standards for the regulated financial institution.

The above compliances will increase operational overheads for these companies. The sector is already working on very small margins, so for smaller companies the business would become difficult. As per market statistics, there are close to 65-70 payment aggregators working in our country.

With these guidelines in place, the bigger companies such as Paytm and RazorPay will benefit as competition will reduce from smaller companies.

Interested folks can buy Paytm Unlisted shares at our website.

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