Fintech firm CRED has received an in-principle nod from the Reserve Bank of India for the payment aggregation (PA) business. As per NDTV Profit, CRED is mandated to submit an audit report within 6 months after which the decision on final approval will be made.
After the final approval, the Peak-XV backed Bengaluru based startup can expand to merchant payments business too, thus joining the ranks of Razorpay and Cashfree. At present, CRED primarily runs a credit card bill payment platform for creditworthy customers.
As per The Economic Times, CCAvenue, Innoviti Payments and MSwipe are also among the payment companies which received their final PA licence recently.
At present the firm operates Cred Pay in partnership with other payment companies through which it offers a check out option to its users on popular ecommerce platforms. With the final PA licence, CRED will be able to settle and transfer funds by itself. The licence will also allow CRED to offer merchant payments to any online seller.
Payment Aggregators can manage funds through an escrow account and offer value-added services on top of payments.
On Tuesday, The Reserve Bank of India issued draft rules to regulate payment aggregators who handle physical point of sale services. These regulations include minimum net worth requirements, amendments to certain existing directions as well as a timeline for compliance. The central bank has also invited public comments and feedback on the proposed regulations by May 31.
Also Watch: RBI proposes to tighten regulations for payment aggregators; issues draft rules