Authorisation and scope
Determine whether the model is online PA, physical PA, cross-border PA or technology-only gateway.
Payment aggregators: authorisation, merchant checks and settlement
Follow the actual fund-handling role, merchant type and domestic/cross-border account before choosing the rule.
13 unitsPSS Act, 2007; PMLA and IT overlaysMerchant funds and safeguards
Published by Finin2min · Source review 24 October 2026
Payment aggregators: authorisation, merchant checks and settlement
Follow the actual fund-handling role, merchant type and domestic/cross-border account before choosing the rule.
- A PA collects customer payments and settles them to merchants. A gateway that only routes technology without handling funds is outside this PA MD’s definition/scope; names such as checkout partner do not settle the classification.
- Bank PAs do not need a separate PA authorisation under paragraph 5(a). Non-bank PAs need RBI authorisation, an Indian company and the actual capital conditions: ₹15 crore at application, ₹25 crore by the end of the third financial year of authorisation and continuing maintenance.
- Merchant due diligence is substantive, including consented CKYCR retrieval, permitted fallback checks, antecedents, correct merchant identity/category and transaction monitoring. The old-merchant transition ended in September 2026; it is not an open future grace period.
- Domestic escrow, inward collection and outward collection accounts have different currency, pre-funding, inter-account transfer and core-portion rules. Settlement to merchants is governed by a fair, equitable and transparently stated agreement under the 2025 table, rather than a copied universal 2020 T+1 formula.
- Use the actual refund/TAT route, website disclosures, cyber controls and Annex 2 returns. The June 2026 authorisation direction supplies common covered requirements and does not erase PA-specific ₹15/₹25 crore thresholds.
Practical illustration
A company offers a domestic checkout, an export collection service and loans through an NBFC. Map PA-O/PA-P/PA-CB funds and the separate lender/LSP role before choosing escrow accounts, disclosures and licences.
This illustration is not a reported company or court case.
Questions answered
Is every payment gateway a regulated PA under this direction?
No. A gateway without involvement in handling funds is expressly distinguished; actual activity determines the role.
Does the old 2020 settlement shorthand control every current PA transaction?
No. The 2025 MD has its own settlement table and repeal/saving provisions.
Primary source and edition
RBI PA Directions of 15 September 2025, read with the stated current common and payment-system instruments. PA Directions 2025 paragraphs 4–18, Annexes 1–2; common PSO Authorisation Directions 2026
Read the actual official provision
Scope and source editions
Reviewed against the named official editions on 24 October 2026. Product, regulated entity, transaction type and the instrument’s commencement or saving provisions determine applicability. Examples are illustrations rather than reported company cases.
Module register
Net-worth and capital maintenance
Track initial/continuing net-worth, auditor certificate and shortfall escalation.
Governance and fit-and-proper
Screen promoters/directors, ownership/control changes and conflicts.
Merchant onboarding and KYC
Verify business, beneficial ownership, website/app, prohibited goods, settlement account and risk rating.
Merchant monitoring
Monitor abnormal transaction, refund, chargeback and customer-complaint patterns.
Escrow account and permissible flows
Reconcile collections, settlement, refunds, fees and permitted debits daily.
Settlement timeline
Apply merchant agreement and regulatory outer limits; preserve cut-off and exception evidence.
Customer disclosures
Show merchant identity, payment status, refund route and complaint contact.
Data security and card credentials
Do not store prohibited authentication data; comply with tokenisation, PCI and RBI security controls.
Dispute, refund and chargeback
Use documented responsibility, timeline, evidence and ageing controls.
Outsourcing and service providers
Map critical vendors, cloud, gateway, fraud, reconciliation and customer support contracts.
Cross-border payments
Separate import/export collection, FEMA, merchant due diligence and settlement currency controls.
Audit, reporting and change control
Submit statutory/system audit, cyber incident, escrow and regulator returns and pre-clear material changes.
Related provisions and official resources
- Payment systems, aggregators and settlement controls | Finin2min
- Payment Deadline and Acceptance | Finin2min
- Historical2020 escrow-account circular; use the current PPI/PA clauses cited above
- Historical2023 PA-CB circular (repealed subject to the specific pending-applicant saving in the2025 PA direction)
- Historical2019 RBI PA/PG discussion paper: background, not the current operative direction
- Payment-system Authorisation Directions, 15 June 2026