Overview
Amazon Pay, the fintech arm of ecommerce giant Amazon, has been granted a Payment Aggregator (PA) licence by the Reserve Bank of India (RBI), enabling it to expand its payment services across India.
Licence Approval
The RBI approved Amazon Pay’s application on February 20, adding it to the list of companies that have obtained the PA licence in 2024. This list includes other prominent names like JusPay, Stripe, Tata Payments, and Mswipe.
Amazon Pay’s Commitment
Amazon Pay expressed its commitment to simplifying lives and fulfilling the aspirations of merchants and customers in India. The licence will allow Amazon Pay to strengthen its distribution channels and deliver secure, convenient, and rewarding digital payment experiences.
Regulatory Framework
Introduced in March 2020, the payment aggregator framework requires all payment gateway operators to obtain a licence. This enables them to acquire merchants and provide digital payment solutions, as well as to pool customer funds and transfer them to merchants after a specified period.
RBI’s Increased Scrutiny
The licence comes amid the RBI’s heightened scrutiny of fintech startups due to concerns over corporate governance and compliance issues. This scrutiny recently led to restrictions on Paytm Payments Bank’s operations.
Significance for Amazon Pay
Already holding a Prepaid Payment Instrument (PPI) licence from the RBI since 2017, this new licence marks a significant milestone for Amazon Pay. It reflects the company’s growing presence in the digital payments sector amidst India’s rapidly expanding fintech ecosystem.
Digital Payments Growth in India
Driven by affordable internet and smartphones, India’s digital payments sector is flourishing. According to Inc42, the sector is expected to reach a market size of $253 billion by 2030, highlighting the vast potential for companies like Amazon Pay.
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- Source: https://timesnext.com/amazon-pay-receives-payment-aggregator-licence-rbi/
