The Reserve Bank of India is set to implement strict capitalisation norms and mandatory Know Your Consumer (KYC) requirements for digital payment companies offering merchant payments through point-of-sale terminals, three people in the know said. This will bring companies like Pine Labs, MSwipe, Innoviti Payments, and Ezetap that are deploying point-of-sales terminals, mobile payment terminals, and QR code terminals at offline merchant outlets within the scope of regulations.
The RBI is currently working on completing the processes for final approval of the PA/PG (payment aggregator/payment gateway) licences… After that gets done, they will come after the offline sector,” a senior banker in the know said. Two startup founders who operate in this space told ET that there have been no consultations with the industry yet, but the policy direction has already been conveyed to the sector. A discussion paper could get circulated very soon,
Unlike online payment aggregators, offline payment players are managed closely by banks and card schemes like Visa and Mastercard. Hence, it should be easier to regulate them, given most of them already operate under strict mandates from their partner banks. Also, many of these companies have already taken an in-principle payment aggregator nod from the regulator, which means the RBI has already scrutinised them. The industry expects that the regulatory process will be simple and fast.
RBI wants to regulate merchant acquirers, given they have the major job of ensuring that the right set of merchants get onboarded and settlements of transactions also happen in a systematic fashion,” said the banker quoted above.