By Erick Last week, Razorpay became the first payment aggregator in India to obtain license to operate all three of these – online payments, in-store / POS payments and cross-border payments. In breaking down this piece of news, I will quickly make you understand quite a bit of how payment aggregators work in India.
Payment Gateway
This is the technology. It securely captures your card, UPI, or net‑banking details and sends them to the bank for approval. Think of it as the encrypted pipe that moves payment data between your app and the bank.
Payment Aggregator
This is the service provider, and in India they are regulated by the RBI. It onboards merchants, plugs into multiple payment methods, collects customer money into an escrow/nodal account, and then settles it to the merchant after deducting fees.
In short: gateway moves data, aggregator also touches money and handles settlements, refunds, chargebacks, and dashboards.
In India, some of the most popular payment aggregators are Razorpay, PayU, Cashfree, CCAvenue, PhonePe, Paytm Payments Services, Stripe, and a bunch of bank‑run solutions as well.
The Three Licenses that Razorpay Got
Under RBI’s framework, non‑bank payment aggregators need specific authorisation to operate. Broadly, you’ll see:
- Licences for online payment aggregators serving internet and app‑based merchants,
- Licences aligned to in‑store / POS (Point of Sale)–style aggregation models, and
- Authorisations connected to specialised or cross‑border aggregation setups that still fall under payment and settlement rules.
Each category comes with net‑worth, escrow, KYC, and tech‑security conditions that the RBI checks before granting authorisation.
And Razorpay is the first to get all these three.
And no, they are not sponsoring this post or any of my content. You, however, can support me by sharing this post. 🫶🏼
[…] one company that may be able to do it right, it looks like it’s Razorpay. They were the first to get all three RBI licenses for non-bank payment […]