After a hiatus of nearly 15 months, PayU has finally received in-principle approval from the RBI to operate as a Payment Aggregator (PA) and resume onboarding new merchants. This nod comes after the RBI returned PayU’s initial application in January 2023, citing complexities in its corporate structure.
Regulatory Hurdles
PayU has temporarily halted its merchant onboarding process for its online payment aggregation business and it joined the ranks of other fintech players in the industry like Paytm, Razorpay, and Cashfree who faced similar restrictions. While cashfree and Razorpay had secured their approval in December last year, PayU continued its commitment to the regulator to meet the compliance standards.
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CEO Optimism and Commitment
PayU CEO Anirban Mukherjee expressed happiness at the RBI recognition, emphasizing the company’s dedication towards compliance and corporate governance. Mukherjee underlined the importance of the license in PayU’s mission to establish a strong digital payments infrastructure in line with India’s Digital India initiative and RBI’s progressive regulations. The CEO reiterated PayU’s commitment to promote digitisation and financial inclusion, especially for small merchants.
Path to Growth and Expansion
PayU, which is preparing for an IPO, has actively cooperated with regulators over the past year to improve its license application as a payments aggregator. Although merchant onboarding faced a temporary blockade, the company realized an impressive revenue of USD 400 million in 2023, which represents a significant improvement with a percentage of 31% compared to the previous fiscal year. Additionally, core business revenue growth was 15% to USD 211 million as a result of the new customers and omnichannel business experienced in the first half of FY2024.
About PayU
PayU is a payment gateway that also offers services including buy now-pay later, and competes with Tiger Global-backed Razorpay and Walmart-owned PhonePe. PayU India aims to create a full-stack digital financial services platform to meet all financial needs of customers through technology solutions.
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PA License
Last week, fintech unicorn CRED also reportedly secured an in-principle approval from the RBI for its PA license application. Earlier, the RBI had also granted a PA license to digital payments solutions company Innoviti last month and Amazon Pay, the fintech arm of e-commerce giant Amazon, in February.
