Cred receives in-principle
approval from RBI for payment aggregator business
Fintech firm Cred has received
in-principle approval from the Reserve Bank of India (RBI) for the payment
aggregation (PA) business, said people familiar with the development.
Once it gets the final approval, the
Peak XV-backed Bengaluru-based startup, which primarily runs a credit card bill
payment platform for creditworthy customers, can double down on the merchant
payments business too, joining the ranks of Razorpay and Cashfree.
Once it gets the final approval, the
Peak XV-backed Bengaluru-based startup, which primarily runs a credit card bill
payment platform for creditworthy customers, can double down on the merchant
payments business too, joining the ranks of Razorpay and Cashfree.
It usually takes about six months after
the in-principle nod for a company to get the final approval from the RBI.
CCAvenue, Innoviti Payments and MSwipe are also among the payment companies
which received their final PA licence recently.
Cred did not comment on the development.
The company runs Cred Pay in partnership
with other payment companies, offering a check out option to its users on
popular ecommerce platforms. Once the final PA licence comes through, it will
be able to settle and transfer funds by itself.
As an online payment aggregator Cred can
offer merchant payments to any online seller. The RBI allows PAs to manage
funds through an escrow account and offer value-added services on top of
payments.
On Tuesday, the regulator issued draft guidelines
for payment aggregators suggesting strict know-your-customer requirements on
the part of merchants.
Cred is also developing an offline
payments business and will start deploying QR code based scan and pay
payments at retail outlets. It will build on the UPI payments facility that
Cred is pushing.
It might need to apply separately for
the payment aggregator-point of sale (PA-P) licence. Once the final guidelines
on PA-P are released, there will be more clarity on the application process.
The company is promoting Cred UPI during
the current season of Indian Premier League. As per industry data for March,
Cred was the fourth largest UPI payments application after PhonePe, Google Pay
and Paytm. While it has a miniscule market share compared to the other three,
it has managed to build its consumer payments business in a short time.
Cred wants to be present at every point
of a transaction for the Cred user payments, shopping and credit and this
payments bet is crucial for that, said a person in the know, who did not wish
to be identified.
www.economictimes.indiatimes.com
dt. 20.04.2024