RBI approves Amazon Pay as Payment Aggregator

Amazon Pay, the digital payments arm of Amazon India, has received a payment aggregator (PA) licence from the Reserve Bank of India (RBI), marking a significant milestone for the fintech sector. This accreditation enables Amazon Pay to offer online merchant payment services to its clients, strengthening its distribution channels and delivering innovative solutions for merchants and customers across India.

What is a payment aggregator licence?

A payment aggregator licence allows a company to operate as an intermediary between merchants and payment processors or banks. This model is often used by businesses that operate online marketplaces or platforms where multiple sellers offer goods or services. As part of the process, PAs pool the funds received from customers and transfer them to merchants after a certain time period.

Why is this important for Amazon Pay?

Amazon Pay is one of the leading players in the digital payments space in India, with over 6.6 crore wallets and operational revenue of Rs 2,093 crore in FY23. It operates a consumer-focused mobile wallet which can be used for all forms of digital and UPI payments. It also offers various services such as bill payments, recharges, money transfers, insurance, loans and more.

With the payment aggregator licence, Amazon Pay can now expand its merchant payments business, which is a major opportunity for the ecommerce giant given its large online shopping business in India. It can now facilitate payments for third-party sellers on its platform as well as other online and offline merchants who partner with Amazon Pay.

How did Amazon Pay get the licence?

Amazon Pay applied for the payment aggregator licence in March 2020, following the RBI guidelines issued in February 2020. The guidelines mandated that all existing and new PAs should obtain authorisation from the RBI by June 30, 2021. However, due to the COVID-19 pandemic, the deadline was extended to March 31, 2022.

Amazon Pay received the final authorisation from the RBI on February 20, 2024, becoming one of the few companies to have obtained this licence so far. Around 10 companies have received this licence since the start of the year 2024. These include Zomato, Google Pay, Zoho, Juspay, Decentro and others.

What did Amazon say about the licence?

“We are excited and thankful to receive the final authorisation from the Reserve Bank of India (RBI) to function as a Payment Aggregator. We remain committed to simplify lives and fulfill the aspirations of merchants and customers,” an Amazon spokesperson said.

“This allows us to further strengthen our distribution channels and deliver innovative solutions for our merchants and customers across India providing them with secure, convenient, and rewarding digital payment experiences,” the spokesperson added.

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