In a move aimed at enhancing regulatory oversight in the payment ecosystem, the Reserve Bank of India (RBI) has proposed new guidelines for non-bank entities offering physical point of sale (PoS) services. The circular, released late on Tuesday, outlines stringent requirements for non-bank physical payment aggregators (PA-P) to ensure compliance and operational continuity.
Under the proposed guidelines, non-bank PoS providers are mandated to notify the RBI of their intent to seek authorization within 60 days and submit their applications for approval by 31 May 2025. Until a decision is communicated by the RBI regarding their application, these entities are permitted to continue operations.
However, the circular also sets a deadline for existing non-bank physical payment aggregators failing to meet the net worth requirements or not applying for authorization within the specified timeframe. Such entities must cease operations by 31 July 2025. Additionally, banks have been directed to close accounts associated with the PA activities of these non-banks by 31 October 2025, unless evidence of a submitted authorization application is provided.
The RBI emphasized the importance of aligning regulations for both online and offline payment aggregators, stating that payment aggregators play a crucial role in the payments ecosystem. While regulations were previously applicable only to those processing online or e-commerce transactions, the new draft seeks to harmonize regulations between the two sets of service providers.
As per the notifications, non-bank PoS providers in the online domain are now required to seek approval from the Department of Payment and Settlement Systems (DPSS) within 60 calendar days to continue their business. These entities are also expected to adhere to guidelines on governance, merchant onboarding, customer grievance redressal, dispute management framework, baseline technology recommendations, security, fraud prevention, and risk management within three months from the date of the circular.
For non-banks providing PA-P services as of the date of the circular, a minimum net worth of ₹15 crore is required at the time of applying for authorization. This net worth threshold is set to increase to at least ₹25 crore by 31 March 2028 and must be maintained thereafter. New non-bank PA-Ps or those yet to commence operations before the issuance of this circular are also subject to similar net worth requirements, with a minimum of ₹15 crore at the time of applying for authorization and achieving ₹25 crore by the end of the third financial year post-authorization.
