RBI PA & PG Audit

On 17th Match’20 RBI circulated a new guideline for the Regulation of Payment Aggregators and Payment Gateways that mandated the entities to get authorization from RBI, for obtaining the settlement of payment to the merchant at fixed transaction time.

Under the issued 'Guidelines on Regulation of Payment Aggregators and Payment Gateways' (the "Guidelines"), the RBI has decided to (a) regulate, in entirety, the activities of payment aggregators; and (b) provide baseline technology-related recommendations to payment gateways. These guidelines aimed at serving and assisting payment aggregators in having a baseline technology related to payment gateways.

From now, the Payment Aggregators and Payment Gateways will be regulated by RBI to ensure the safety of all online transactions. The Key aspects of the guidelines are as follows:

• The Payment Aggregators required baseline technology, which includes the implementation of Data Security standards, Cybersecurity audits, incident reporting, and framing IT policies.

• Payment Aggregators have clear policies while on-boarding the merchant, privacy policy, Customer Grievances, etc. and follow the provisions set by Prevention of Money Laundering ACT 2002.

• E-commerce organizations with a Payment Aggregators business, need to take the authorized license and must segregate Payment Aggregators into the separate entity.

• A non-bank Payment Aggregators must be a complete company incorporated under the Act of the organization with the PA activity forming a party.

• In case of any takeover or acquisition of control or any change in upper management of non-bank Payment, Aggregators must communicate with the Chief General Manager of RBI within 15 days of the change.

• The RBI also gives the format of authorization which includes net-worth certificate director's undertaking, auditor certificate while maintaining the balance on an escrow account, and a format for storing the data of transactions handled by Payment Aggregators every month.

• Non-Banks Payment Aggregators will have the minimum net worth of Rs 15 Crore which also varies up to INR 25 crore by the end of the financial year.