Payment Aggregators

• Several startups, including Decentro, Juspay, and Zoho, have recently obtained regulatory approval from the Reserve Bank of India (RBI) to operate as payment aggregators (PAs).
• Other notable companies that received licenses earlier include Zomato, Stripe, and Tata Pay.

What is a Payment Aggregator?

• A payment aggregator is a service provider that allows businesses to process card payments and mobile transactions. 
• They act as an intermediary between businesses and financial institutions, simplifying the process of accepting electronic payments.

NPCI

National Payments Corporation of India (NPCI), an umbrella organisation for operating retail payments and settlement systems in India, is an initiative of Reserve Bank of India (RBI) and Indian Banks’ Association (IBA) under the provisions of the Payment and Settlement Systems Act, 2007, for creating a robust Payment & Settlement Infrastructure in India.

Considering the utility nature of the objects of NPCI, it has been incorporated as a “Not for Profit” Company under the provisions of Section 25 of Companies Act 1956 (now Section 8 of Companies Act 2013), with an intention to provide infrastructure to the entire Banking system in India for physical as well as electronic payment and settlement systems.

The Company is focused on bringing innovations in the retail payment systems through the use of technology for achieving greater efficiency in operations and widening the reach of payment systems.

The ten core promoter banks are State Bank of India, Punjab National Bank, Canara Bank, Bank of Baroda, Union Bank of India, Bank of India, ICICI Bank Limited, HDFC Bank Limited, Citibank N. A. and HSBC.

RuPay

RuPay is an Indigenously developed Payment System – designed to meet the expectation and needs of the Indian consumer, banks and merchant eco-system. RuPay supports the issuance of debit, credit and prepaid cards by banks in India and thereby supporting the growth of retail electronic payments in India.

RuPay is well poised to explore innovative payment opportunities such as Contactless – offline and online to drive adoption of low value payments. All RuPay Cards will now have the functionality of NCMC which can enable low value contactless payments (like transit, toll, parking, retail) using Offline technology.

Practice Questions for Prelims

Consider the following statements:
1. NPCI helps in promoting financial inclusion in the country.
2. NPCI has launched RuPay, a card payment scheme.

Which of the statements given above is/are correct?
a) 1 only
b) 2 only
c) Both 1 and 2
d) Neither 1 nor 2

Ans. b)

Mains Practice Question

How are payment aggregators different from payment gateway? Explain, with special focus on different types of Payment Aggregators.

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