The Reserve Bank of India (RBI) has rejected the application of Paytm Payments Services (PPSL) for licence to operate as a payment aggregator, the company informed the bourses on November 26.
The fintech company’s subsidiary had applied for authorisation to provide payment aggregator (PA) services for online merchants. The banking regulator put a pause on onboarding of online merchants by Paytm Payments Services. The company will not onboard new online merchants till the time approvals remain pending.
This makes Paytm the only large payment gateway player to receive a rejection from the regulator. Incumbents like Razorpay, Pine Labs, Cashfree and CCAvenues have received an in-principle nod from the regulator, while BillDesk and PayU are awaiting a response.
Mobikwik is the only other known player, besides other smaller players, whose application was rejected by the RBI as the company failed to meet networth requirements. The company has already reapplied for the license, as per reports.
According to RBI's PAs guidelines, a single entity cannot continue to provide an e-commerce marketplace along with payment aggregator services and such payment aggregator services must be separated from the e-commerce marketplace business.