Amazon Pay secures RBI's payment aggregator licence

Payment aggregator licence: Amazon Pay, the financial technology arm of e-commerce behemoth Amazon, has clinched the esteemed payment aggregator (PA) licence from the Reserve Bank of India (RBI), marking a pivotal milestone in its operational journey.

The regulatory green light, received on February 20, now enables Amazon Pay to operate as a payment aggregator, empowering the platform to facilitate seamless e-commerce transactions through its application.

This announcement arrives amid a flurry of licensing approvals, with 10 companies being granted the coveted licence since the inception of 2024. Notable recipients include prominent entities such as food aggregator Zomato, Juspay, Decentro, Mswipe, Zoho, and Stripe, underscoring the expanding horizons of fintech innovation within the Indian market.

What is payment aggregator licence?

A payment aggregator licence signifies authorisation for a company to act as an intermediary between merchants and payment processors or banks. Essentially, it empowers the aggregator to accept payments on behalf of multiple merchants, consolidate them, and subsequently distribute the funds to the respective merchants. This operational model is particularly beneficial for businesses operating online marketplaces or platforms hosting multiple sellers. The acquisition of such a licence ensures adherence to regulatory standards, encompassing stringent financial and security protocols set forth by relevant authorities.

In addition to the PA licence, Amazon Pay already holds a Prepaid Payment Instruments (PPI) licence, allowing it to operate wallet services such as Amazon Pay balance, according to RBI.

A spokesperson from Amazon Pay told the media, "We remain committed to simplifying lives and fulfilling aspirations of merchants and customers. This (licence) allows us to further strengthen our distribution channels and deliver innovative solutions for our merchants and customers across India, providing them with secure, convenient, and rewarding digital payment experiences."