PhonePe, Razorpay rival PayU Payments cleared by RBI to operate as payment aggregator
PayU Payments has received a big shot in the arm from RBI allowing it to operate as a payment aggregator.
PayU Payments has received the Reserve Bank of India's in-principle nod to operate as a payment aggregator. This will now allow PayU to onboard new merchants onto its platform. The step comes some 15 months of its ongoing talks with the RBI after having faced initial rejection.
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What is PayU
Fintech company PayU allows people, including merchants, to buy and sell online, and helps extend the reach of financial services. The payment gateway also offers buy-now-pay-later services. PayU is backed by Prosus and competes with the Tiger Global-backed Razorpay and Walmart-owned PhonePe.
The central bank’s move, according to PayU CEO Anirban Mukherjee is "a testament to our relentless focus on compliance and corporate governance".
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Notably, this nod by RBI comes in the wake of a serious notification sent to other companies in this segment ordering them to tighten scrutiny of the payments sector. The central bank asked online payment firms to monitor transactions-related activities of merchants as well as ensure guidelines are being followed properly.
Notably, the central bank had returned PayU’s application to operate as a payment aggregator and even stopped it from onboarding new merchants. RBI had cited PayU's very complex corporate structure.
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PayU India revenue was reported at $400 million in FY23 and although FY24 results are still to be divulged, MoneyControl reports that its core payments business revenue increased 15 percent to $211 million (H1 FY24), says a report by MoneyControl.
