RBI Provides In-principle Approval to EaseBuzz for Payment Aggregation Authorisation

EaseBuzz, a leading platform that provides payment solutions in the country received in-principle approval from Reserve Bank of India for Payment Aggregator Authorization. EaseBuzz provides businesses with technology based payment solutions to digitise the payment collection in easy steps. The company is creating easy to use and pocket friendly API (Application Programming Interface) based solutions frome years to help businesses with problems related to payment receival. 

Easebuzz claimed to be assisting MSMEs with end-to-end payment use cases by providing scalable and easily flexible API solutions. It seeks to be the digital transformation engine and the financial operating system for the 63 million MSMEs already operating in India.

Rohit Prasad, MD & CEO of Easebuzz, said that, "the RBI regulation undoubtedly broughts a great trust towards the digital payment ecosystem and empowers companies to innovate, so as to boost and accelerate the growth of digital payments in the nation

He further stated, “Our focus is on creating secure, cutting-edge and easy-to-use Payment Solutions that are more accessible to Indian SMEs and empowering them to be the growth drivers for the USD 5 trillion economy dream".

What are Payment Aggregators?

The RBI published rules in March 2020 to control the Payment Aggregators (PA) and Payment Gateways that handle payments in the internet world. 

According to the guidelines, "payment aggregators" are organisations that enable merchants and e-commerce sites to accept different payment instruments from customers in order to fulfil their payment obligations without the need for the merchants to develop their own separate payment integration system. PAs make it easier for retailers to work with acquirers. They collect payments from clients along the process, pool them, and then eventually send the funds to the merchants.

How are Payment Aggregators Different from Gateways?

Two similar terms,Payment Gateways and Payment Aggregators, are always a matter of confusion among people. A very simple explanation for them is, while the Payment gateway provides the technical assistance only, the payment aggregator takes the payment from the customer on the merchant's behalf. It also sends the payment to the merchant later. 

The Know Your Customer (KYC), Anti-Money Laundering (AML), and Combating Financing of Terrorism (CFT) rules set out by the RBI are followed by all Payment Aggregators. They must also adhere to the Prevention of Money Laundering Act, 2002's rules.

Additionally, payment gateways carry out risk evaluation processes. From the standpoint of contractual or commercial compliance, this reveals any weaknesses or dangers to the confidentiality or integrity of the assets.

The Board has authorised a merchant onboarding policy for PAs. They often do background checks on their merchants to make sure they don't have any bad intentions, like selling fraudulent goods or misleading clients. Payment Aggregators also make sure that Payment Card Industry-Data Security Standard (PCI-DSS) and Payment Application-Data Security Standard (PA-DSS) compliance.

Payment Aggregators may also conduct security reviews of merchant websites to make sure that card-related consumer data is not kept on file. In reality, incident reporting requirements and PA-DSS compliance guidelines are included in Payment Aggregator agreements with merchants.

Similar guidelines are followed by the Payment Gateway for onboarding new merchants. To make sure the retailers follow the fundamental security procedures, they conduct thorough security evaluations.