Decoding the Myth of Payment Aggregator and Payment Gateway
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The story comes up with ambition of digitalization and innovation in Banking and Financial Service Industry back in 2000 by Reserve Bank of India. The process is ongoing but now a days, the system has witnessed the drastic innovation and scalability in Finance Business, precisely on Payment Industry. Today’s Payment Industry was myth few years back but the challenge and momentum catch by the Payment Industry is appreciable. Massive Cheque clearance activities are somehow to extend managed well enough to address the payment channel. It is observed either e-commerce or grocery shop at local market has practice well enough to crystalize the payment system idea into reality. Credit goes to demonetization too, which obviously help the people to digitize their currency as payment mode via wallet and other instruments easily and conveniently. Now a days, people prefer digital wallet instead of cash carry on their pockets. News is awesome and same has challenge as far as regulatory approval and commencement of business is matter of fact.
Identifying the Stakeholders
Moving ahead to understand the major stakeholders on payment industry, its Prepaid Payment Instrument, Aggregator and Gateway. Prepaid Payment Instrument is well versed and aware to all, as all the licensing policy to compliance and exit regulation been well articulated, practiced and industry set is ready. However, while coming to Payment Aggregator and Payment Gateway, again Regulator and Industry People need in depth working experience and practice case, as many of industry player thought these two different products as packet and not different altogether.
Read Our Service: Payment Gateway and Aggregator - License By RBI
Question: Is the Payment Aggregator and Payment Gateway are same?
Today in market, we can observe various player doing aggregator and gateway business as packet and the early stage stone has kept on this prototype is in early 2009. Where Reserve Bank of India (RBI) issued operating guidelines on recommendation nature to practice the Aggregator and Gateway business. However, in 2019, the draft regulation is placed for public comments which has been now issued in 17th Nov, 2020 as “Guidelines on Regulation of Payment Aggregators and Payment Gateways”. Now its applicable guidelines to all the operating aggregator and gateway to get them registered and complied with regulation in the given time frame. However new player can keep this guideline as principal documents to move for license to do Payment Aggregator and Gateway basis. Entrepreneur has to decide the mode of its business license and operating viability thereon.
Writeup will not more engage on explaining the rules and regulation, instead the prime focus is to aware the public at large regarding the interpretation and its operating manual, not as packet but different products as Payment Gateway and Payment Aggregator. Let’s solve the above question with differentiating perspectives as below: -
|Basis||Payment Aggregator||Payment Gateway|
|Definition||Entities that facilitate tripartite money management for consumption of services, goods or both||Entities that provide technology infrastructure to route and facilitate processing of an online payment transaction|
|Industry||E-commerce and Merchant to accept various instrument from customers||Open for all|
|Money||It holds Money||It does not hold Money|
|Process||It receives payments from Customers, Pool and transfer them on to the merchants after a time period||Collects information on cipher text, transfer between sender, receiver and involve stakeholders to materialize the execution on secured platform|
|Technology Baseline||Pool Fund Management Company with Baseline Technology of Payment Gateway||Core Technology Company|
Ample of entities are doing this business practice based on Guidelines issued earlier in 2009 and letter of acknowledgement receipt from Regional RBI, are now required to go for Certificate of Authorization with Minimum Net Owned Fund of INR 15 Crore to Central, Reserve Bank of India by 30th Sept, 2021.
Often it is observed and understood the Payment Aggregator and Payment Gateways are same, as packet from various Industry people whereas we stand it as not same but 360-degree different product as nomenclature and operating modes are totally different. The understanding of taking aggregator license will empower us to act as gateway too is not true at all as far as regulator is aware and concern. Hope the matter is clear and been more transparent on subject line.