A.  INTRODUCTION:

The Reserve Bank of India (RBI) had recently rolled out new guidelines in order to regulate the activities of the online Payment Aggregators (PAs) and to implement baseline technology-related recommendations for Payment Gateways (PGs).

 

B. WHO IS WHO

 

Payment Aggregators PAs 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. PAs facilitate merchants to connect with acquirers. In the process, they receive payments from customers, pool and transfer them on to the merchants after a time period. (PayUMoney, BillDesk, CC Avenue, AmazonPay, PayTM, Razorpay and Instamojo etc.)

 

Payment Gateways PGs are entities that provide technology infrastructure to route and facilitate processing of an online payment transaction without any involvement in handling of funds. (SBI epay, Paypal, HDFC, Gpay, Netflix , and Flipkart etc.)

 

C. DIFFERENCE BETWEEN THE PAYMENT AGGREGATORS & PAYMENT GATEWAYS:-

 

Factors	Payment Aggregators (PA)	Payment Gateways (PG)
Function	Intermediary between merchant and his bank	Interface platform of different payment Gateways
Payment mode	Only Online via Website/Mobile App	Both Online & /or Offline
Payment Option	Single	Multiple
Integration Solution	Yes	Yes
Payment Success Rate	Depends upon how much load a payment gateway can hold	A higher payment success rate due to payment gateway can had integrated system
Ownership	By public/private banks, merchants, vendors, and payment aggregators	Owned by large Fin-tech entities
Authorization	Authorized by RBI under Payment & Settlement Systems Act (PSSA) 2007.	This requires the mandatory Payment & Settlement Systems Act (PSSA) Card Industry Data Security  Standard  (PCI-DSS) certification

 

 

1. ELIGIBILITY TO APPLY FOR PAYMENT AGGREGATOR LICENSE

 

Net-worth for RBI authorization:

 

Thus, new PAs at the time of application for RBI authorization must have a minimum net- worth of ₹15 crore. By the end of 3^rd financial year of grant of RBI authorization, they must attain a net-worth of ₹25 crore.

 

• Composition of the net worth of PAs:-

The net-worth of the all the PAs shall consist of the following:-

• Paid-up equity share capital;
• Preference shares that are convertible to equity*;
• Free reserves,
• The balance must be in share premium account and capital reserves representing surplus due to sale of fixed assets.

 

• Foreign Direct Investment (FDI):

All the non-bank entities having FDI shall be governed by the Consolidated Foreign Direct Investment policy as well as the relevant FEMA regulations in this regard. Our FEMA Advisory team can provide you expert help and guidance regarding the same.

 

E. ESCROW ACCOUNT AND ITS MANAGEMENT

 

As per the RBI guidelines, all the Non-bank PAs are required to deposit the amount collected from merchants in an “escrow account”. This is an account which shall be opened with any of the RBI scheduled commercial banks. Hence, the activity of the PAs shall be deemed as ‘designated payment systems’ u/s 23A of the Payment and Settlement Systems (Amendment) Act for the maintenance of this escrow account.

 

F.  GOVERNANCE

 

• The PA Guidelines require PAs to be professionally managed, where the ‘promoters’ of the PA entity should satisfy the ‘fit and proper’ criteria prescribed by the RBI, and the directors of the applicant entity are required to submit a declaration in the requisite format. Pursuant to the Notification, the RBI has clarified that the ‘Promoters/ Promoter Groups’ shall conform to the RBI’s fit and proper criteria, and has further set out in

detail, a standard criterion for evaluating the directors of the PA entity against the fit and proper criteria. However, the RBI has not clarified whether the fit and proper criteria is applicable for both promoters and promoter groups or compliance by either of the two is sufficient.

 

• Under the PA Guidelines, PAs are directed to disclose comprehensive information regarding merchant policies, customer grievances, privacy policy and other terms and conditions on the website and / or their mobile In the Notification, the RBI has clarified that this obligation refers to policies of the PA and not of individual merchant’s on boarded by it.

 

G.  TERMS AND CONDITIONS:

• Assigner shall nominate specific person(s) for co-ordination and shall provide relevant data support in concern assignment Mr. Pramodkumar Ladda and will be assigned
• All the payments should be made in the name of “Ladda Bhutada & Associates”.
• GST will be added separately additionally @18% on above mentioned
• All the disputes shall be subject to Pune
• Termination of this contract requires 30 days’
• Payment Terms- 50% advance along with Work Order, 50% after submission of Application for approval.
• GST- Extra as Applicable

 

 

H.  PLACE OF RENDERING SERVICES

 

The place of rendering services generally shall be our office situated at Office No. 106, Sr No. 55, Sukhniwas, 15^th August Chowk, Mangalwar Peth, Pune – 411011, Maharashtra, India.

 

Thanking you and wishing long term relationship with your esteemed organization.

Sd/-

PRAMODKUMAR R. LADDA

Company Secretary & Insolvency Professional