E-commerce giant Amazon's financial technology arm, Amazon Pay, has secured authorization from the Reserve Bank of India (RBI) to operate as a payments aggregator (PA). The RBI approved Amazon Pay's application on February 20, adding it to the list of companies granted this coveted license in 2024.
This authorization marks a significant milestone for Amazon Pay, allowing it to further streamline its operations and provide innovative payment solutions to merchants and customers across India. The company joins a growing cohort of entities, including JusPay, Stripe, Tata Payments, and Mswipe, authorized to operate as payments aggregators this year.
An Amazon Pay spokesperson reiterated the company's commitment to simplifying transactions and enhancing customer experiences. This license enables Amazon Pay to enhance its distribution channels and offer secure, convenient, and rewarding digital payment experiences to users.
It's noteworthy that Amazon Pay already holds a prepaid payment instrument (PPI) license granted by the RBI in 2017, further strengthening its position in the digital payments landscape.
Introduced in March 2020, the payment aggregator framework mandates that all payment gateway operators obtain a license to facilitate transactions between merchants and customers. This license empowers payment aggregators to consolidate funds received from customers and transfer them to merchants within a specified timeframe.
The RBI's decision to grant Amazon Pay a payment aggregator license underscores the growing importance of digital payments in India's financial ecosystem. This development comes amidst heightened regulatory scrutiny on fintech startups, exemplified by recent restrictions imposed on Paytm Payments Bank by the RBI.
The approval also precedes a crucial meeting between Finance Minister Nirmala Sitharaman and fintech stakeholders, highlighting the government's emphasis on regulatory compliance and governance in the sector.
Overall, Amazon Pay's entry into the payment aggregator space is poised to further accelerate India's digital payments adoption, fueled by increasing internet penetration and smartphone usage. The robust growth of India's digital payments ecosystem is indicative of the country's transition towards a cashless economy, with projections indicating significant market expansion in the coming years.
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