Mumbai, Apr 18 (KNN) The Reserve Bank of India (RBI) has released draft guidelines aimed at better regulating payment aggregators operating in the country.

The norms unveiled on Tuesday outline specific Know Your Customer (KYC) requirements that payment aggregators need to fulfil while onboarding small and medium merchants onto their platforms.

Under the draft norms, payment aggregators will have to undertake contact point verification and duly verify the bank accounts of small merchants with an annual turnover below Rs 5 lakh who are not registered under the Goods and Services Tax (GST).

For medium merchants, the guidelines mandate contact verification, verification of officially valid documents of proprietors/owners, and verification of the business itself by payment aggregators.

The move to enforce stricter KYC processes for merchant onboarding comes after the RBI recently cracked down on major player Paytm Payments Bank for alleged KYC violations.

Industry experts suggest the regulator is aiming to mitigate risks like money laundering by placing clear merchant due diligence norms.

Aside from KYC regulations, a key aspect of the draft guidelines is allowing payment aggregators to use a single escrow account for fund settlement across both online and offline (face-to-face) transactions.

Previously, separate escrow accounts were required for online and offline merchant fund pools.

The RBI has also proposed minimum net worth requirements of Rs 15-25 crore for new and existing non-bank payment aggregators facilitating offline retail transactions.

Existing players have welcomed the clarity provided by the regulator, although some anticipate the norms could drive consolidation in the payment aggregator industry.

The draft guidelines have been opened for public feedback before being finalised and notified by the central bank in the coming months.

(KNN Bureau)