The company informed the stock exchanges on November 26 that the Reserve Bank of India has rejected their application for a licence to operate as a payment aggregation service.
The subsidiary of the company applied for permission to provide payment aggregation services.
The only large payment gateway player to be rejected by the regulators is Paytm.
The company failed to meet net worth requirements, which led to the rejection of their application by the Reserve Bank of India. The company has applied for a new license.
The application is not rejected, according to the company. The company was told to reapply in 120 days by the Reserve Bank of India. We are taking all the necessary steps and hope to get the required approvals in the near future.
The central bank requires that the application be submitted again within 120 days. To comply with the government's foreign direct investment guidelines, there are a number of steps that need to be taken.
The company stated in its letter that no other observations were made by the Reserve Bank of India.
The CEO of the company isoptimistic that the firm is close to profitability.
The communication from the Reserve Bank of India only applies to new online merchants, so there is no material impact on our business. The statement said that we can continue to offer payment services to new offline merchants.
The company said that the services will not change for existing online merchants. The company is hopeful of getting the necessary approvals in a timely manner.
The company has 100 million KYC customers and is adding 0.4 million users every month. The website says that we are the largest issuer of FASTag.
The competition is heating up in the payments space with more offline players looking for an online play to offer omnichannel payments services to merchants, and existing players ramping up their offerings. While it waits for the license from the Reserve Bank of India, Phone Pe is working on its own gateway. In August this year, the point of sale player,MSwipe, got in-principle approval for a license to accept online payments.
This is the second blow for the company, after the Reserve Bank of India told them to stop new customers from being added to the payments bank. The ban has not been lifted yet, and the management of the bank has received the central bank's observation on it.
Payment aggregation is what it is.
Payment services are provided to merchants by a payment aggregation. They transfer funds from customers to merchants after a certain time.
The IT report was received by the payments bank.
Integrated payment options, such as transactions of cash and cheque, and online and offline touch points, are included in the services.
A licence is necessary.
The new guidelines issued by the Reserve Bank of India mandated that all PAs be authorized by it. The deadline for non-bank companies to apply for authorization was June 30, 2021.
There is a widening of the Q2 loss to Rs 571.5 cr.
The decision on granting the licence has come after a period of assessment of the applications. The norms made it important for all payment gateways to acquire a licence to continue. The few firms authorised to operate as payment aggregators in India will come under the direct purview of the RBI. Over 185 fintech enterprises and start-ups had submitted their applications for a PA licence.
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