By Prerna M
Credit and Finance for MSMEs: Point of Sale (PoS) solutions provider Mswipe on Tuesday announced receiving an in-principle approval from the Reserve Bank of India (RBI) for a payment aggregator license. The approval, according to the company, would now enable it to develop an in-house online payment gateway and bridge the gap between merchants and their customers by accepting and processing digital payments instead of outsourcing settlements.
According to ‘Guidelines on Regulation of Payment Aggregators and Payment Gateways’ issued by RBI in March 2020, payment aggregators are entities that facilitate e-commerce sites and merchants to accept various payment instruments from the customers for completion of their payment obligations without the need for merchants to create a separate payment integration system of their own.
For instance, if a merchant intends to provide net banking payment options to his/her customer, he/she may not partner with various banks as it would require a lot of time in due diligence and integration procedures apart from capital. Payment aggregators in such a situation offer merchants different payment options such as net banking, EMI, cards, UPI etc., on a single platform.
Mswipe said it will have the opportunity to grow as a full-stack payments company and develop new products and innovate processes to make life easier for merchants. The company now aims at adding around 2 lakh new merchants.
“We have about a million merchants, Around 600 merchants are using the PoS terminals, so we plan to give them the option to use our payments gateway going ahead. Besides them, we will focus on SMEs with a turnover of Rs 50-200 crore. As per our growth strategy, we expect to add about 2 lakh merchants by the end of the financial year 2023,” Ketan Patel, CEO, Mswipe Technologies told FE Aspire.
The company said it will now reach out to more MSMEs by offering them all payment options including PoS terminals, QR-code payments, boombox (payment soundbox), payment gateways, and lending solutions. Other fintechs with in-principle approval for payment aggregator licenses in India are Razorpay, 1Pay, PineLabs and Stripe.
A payment aggregator could be a bank or a non-bank enterprise. However, only non-bank payment aggregators need authorisation from the RBI as the model involves the handling of funds. Since banks provide payment aggregator services as part of their normal banking relationship with merchants, they do not require a separate authorisation for this from RBI, according to the central bank.