After a year of regulatory ban, Razorpay, Cashfree secure RBI nod for payment aggregator business

Digital payment startups Razorpay and Cashfree have received the final approval from the Reserve Bank of India to operate as payment aggregators after nearly a year-long embargo, paving the way for them to add new merchants and accelerate growth.

UPI payments giant Google Pay, Mumbai-based expense management platform Enkash, payment gateway company Paymentz and Bengaluru-based neo banking startup Open Financial have also received the regulatory nod, ET has learnt.

Spokespeople at Cashfree and Razorpay confirmed the development and said they are open to onboarding fresh merchants. It also brings these payment companies within the regulatory fold of the central bank for the first time.

In a statement, Open Financial cofounder Anish Achuthan said the licence will enable them to offer all forms of financial tools to small and medium enterprises.

Emailed queries to Google Pay remained unanswered.

“While the likes of Cashfree and Razorpay were always going to get the clearance from the RBI, the embargo was impacting business in a big way; now, that gets cleared which is a big relief,” said the founder of a payment startup which operates in this space.

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The central bank had barred these fintech startups along with Paytm and PayU from onboarding new merchants almost a year back at a time when they were facing stiff competition from Billdesk, Juspay, and CCAvenue, among others.

Paytm and PayU still continue to be under embargo.

ET reported on December 4 how these payment startups impacted by the embargo were building alternate business models to ensure that their revenues remain unaffected.

However, the RBI was conducting multi-level checks to ensure that it selects the right companies for final approval to operate as a payment aggregator.

Industry insiders said overall, six to seven applicants would have received the final nod from the RBI. The exact count could not be confirmed by ET immediately.