PhonePe gets RBI approval to operate as online payment aggregator

RBI – PhonePe:  The Reserve Bank of India has given PhonePe, a fintech company providing online payment services, a major gift ahead of Diwali. The RBI has approved PhonePe as an online aggregator. This will enable shopkeepers and businesses to easily collect and settle payments. Until now, it was only authorized for online payments.

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PhonePe, one of the country's leading fintech companies

PhonePe received permission to operate as an online payment aggregator. This will allow the company to expand its merchant network, focusing on small and medium businesses (SMEs). Yuvraj Singh Shekhawat, Chief Executive Officer (CBO) of PhonePe's Merchant Business, said that with this aggregator, PhonePe will be in a position to provide better services to businesses, especially in the SME segment, which previously lacked access to better services.

RBI grants PhonePe a major boost

This decision will help PhonePe further expand its payment gateway. This gateway provides quick onboarding of merchants, easy integration for developers, and a smooth checkout experience to increase payment success rates. Launched in 2016, PhonePe is one of India's largest fintech companies. It has over 650 million registered users, a network of 45 million merchants, and over 360 million daily transactions. Its portfolio spans payments, lending, insurance distribution, wealth products, hyperlocal e-commerce (Pincode), and the Indus Appstore.

Online Payment Aggregator

An online payment aggregator is a service that helps businesses (merchants) easily accept online payments from their customers.

Merchant Onboarding - A business (such as an online store) signs up with a payment aggregator. The aggregator onboards the merchant to its platform, which involves KYC and verification of business details.

Payment Gateway Integration - The aggregator integrates its payment gateway into the merchant's website or app. This acts as a kind of digital "cash counter."

Multiple Payment Options - The aggregator supports multiple payment methods, such as credit/debit cards, UPI, net banking, wallets like PhonePe, Google Pay, etc. The customer chooses the payment option of their choice.

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Payment Processing - Once the customer makes a payment, the aggregator processes the funds. It coordinates with banks, card networks like Visa, Mastercard, and other financial companies. The user receives confirmation when a payment is successful, and if a payment is rejected, the reason is also provided.