PayU Gets RBI's In-Principle Nod To Operate As Payment Aggregator

The Reserve Bank of India has given an in-principle nod to fintech firm PayU to operate as a payment aggregator, the company said in a press release on Tuesday. It comes more than a year after the RBI ordered the Prosus-backed fintech entity to re-apply for the licence as its corporate structure was complex. After this, PayU had to stop onboarding new merchants to its platform.

With the in-principle approval, PayU can now resume onboarding new merchants onto its platform, the central bank said in the release.

Other fintech companies such as Paytm, Razorpay and Cashfree were also under similar restrictions, until the latter two received a green light from the regulator in December to operate as payment aggregators. Paytm's application, however, is still kept in abeyance.

The payment aggregator licence helps entities to process customers' payments to merchants. While an in-principle approval is not the final licence, which is granted in around six to 12 months, it clears the way for companies to continue business.

In fiscal 2023, PayU India reported a 31% growth in revenue to $399 million from the previous fiscal. After the ban, PayU India earned revenue from its core payments business in the first half of FY23.

In the first half of FY24, the IPO-bound company reported a 15% rise in its revenue from core payments business to $211 million. This was primarily from existing merchants and payment processing stack Wibmo and its omnichannel business.