The Reserve Bank of India (RBI) has approved PhonePe as an online payment aggregator, enabling the company to directly collect and settle payments from merchants and small-to-medium enterprises (SMEs) via credit/debit cards, UPI, and net banking. This move will expand PhonePe's merchant network and enhance its influence in the digital payment sector.
PhonePe: The Reserve Bank of India has granted PhonePe approval to operate as an online payment aggregator, allowing the company to directly collect and settle payments from merchants and businesses via credit cards, debit cards, UPI, and net banking. This approval was received on Friday and aims to further simplify digital payments for small and medium-sized enterprises (SMEs). According to Yuvraj Singh Shekhawat, Head of Merchant Business at PhonePe, this will enable better services for merchants and accelerate the company's network growth.
PhonePe's Merchant Focus and Business Scope
According to Yuvraj Singh Shekhawat, CEO of PhonePe's Merchant Business, the aggregator approval will enable the company to provide enhanced services to businesses that previously had limited facilities. Launched in 2016, PhonePe boasts over 650 million registered users, a network of 45 million merchants, and more than 360 million daily transactions. The company's portfolio spans payments, lending, insurance, wealth products, and hyperlocal e-commerce.
How an Online Payment Aggregator Works
- Merchant Onboarding: The business signs up with the aggregator. After KYC and business details verification are completed, the merchant is onboarded onto the platform.
- Payment Gateway Integration: The aggregator integrates its payment gateway into the merchant's website or app, functioning like a digital "cash counter."
- Multiple Payment Options: The aggregator supports credit/debit cards, UPI, and wallets like PhonePe and Google Pay. This allows the customer to pay using their preferred method.
- Payment Processing and Confirmation: When a customer makes a payment, the aggregator processes it and coordinates with banks, card networks, and other financial partners. Upon successful payment, a confirmation is received, and if rejected, the reason is provided.
