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Payment & Settlement Licensing in India

RBI authorisation advice for payment aggregators, wallets, bill payment platforms and payment infrastructure businesses.

Every payment business in India needs the right RBI approval, and filing under the wrong category can cost months. We help fintechs, wallets and foreign payment groups identify their license, qualify for it and get authorised.

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Advising on PA, PA-P, PA-CB, PPI, BBPS, TReDS and White Label ATM authorisations.

Section 4PSS Act, 2007 requires
RBI authorisation
₹15 crEntry net worth for
payment aggregators
PRAVAAHRBI’s online
filing portal
PerpetualValidity of new
authorisations

Why the right license matters

Not sure which license applies to you? Send us a short description of your payment flow. We will tell you which RBI framework it falls under and what it will take to qualify.

Describe your flow
Digital payments and RBI licensing in India
The costly mistake Filing under the wrong category, or a fund flow the RBI will not accept, can cost around six months.

In India, you cannot run a payment system without the Reserve Bank of India’s permission. Section 4 of the Payment and Settlement Systems Act, 2007 makes that plain. What is less plain is which permission you need.

A company that collects money for merchants needs one license. A company that only routes card data needs none. A wallet, a bill payment app and an export collections platform each sit under a different set of RBI directions, with different net worth tests and different timelines.

Most of the problems we see start at this first step. A founder files under the wrong category, or builds a fund flow the RBI will not accept, and loses six months fixing it.

We advise fintech companies, banks’ partners and foreign payment groups on getting the classification right, building an entity that qualifies, filing on the RBI’s PRAVAAH portal and staying compliant after authorisation.

Which RBI license does your business need?

Start with what your business actually does with money, not what you call it. The table maps common activities to the RBI framework that governs them and the minimum net worth a non-bank applicant must show.

What your business does Likely RBI category Minimum net worth (non-bank)
Collects online payments for merchants and settles to them later Payment Aggregator – Online (PA-O) ₹15 crore at application; ₹25 crore by end of third financial year
Collects payments for merchants at POS terminals or in person Payment Aggregator – Physical (PA-P) ₹15 crore at application; ₹25 crore by end of third financial year
Collects export receipts or pays overseas sellers for e-commerce imports Payment Aggregator – Cross Border (PA-CB), inward or outward ₹15 crore at application; ₹25 crore by end of third financial year
Issues a wallet, gift card or prepaid card usable at third-party merchants Prepaid Payment Instrument (PPI) issuer ₹5 crore at application; ₹15 crore by end of third financial year
Offers bill payments to customers or onboards billers to BBPS Bharat Bill Payment Operating Unit (BBPOU) Separate authorisation not needed if already an authorised PA; otherwise assessed case by case
Runs a platform where MSME invoices are financed TReDS operator ₹25 crore
Sets up and runs ATMs not owned by a bank White Label ATM Operator ₹100 crore
Provides only the technology that routes payment data, never touching funds Payment Gateway (no RBI authorisation needed) No license Not applicable

These thresholds come from the RBI directions in force as of October 2026. Net worth is calculated under the RBI’s prescribed method and certified by your statutory auditor, so a balance sheet figure alone is not enough. If your model mixes two or more of these activities, each one needs to be checked separately.

Payment licenses we advise on

01
PA-O

Payment Aggregator (PA-O) authorisation

If customer money passes through your account before it reaches the merchant, you are almost certainly a payment aggregator. Since 15 September 2025, all PAs are governed by a single RBI Master Direction, which replaced the 2020–2023 guidelines.

We review your fund flow, set up the entity and escrow structure, draft the board-approved policies the RBI expects (merchant onboarding, KYC, refunds, grievance redressal, information security), prepare the net worth certificate and file the application. We also handle the RBI’s queries during scrutiny, which is where most applications stall.

Net worth ₹15 cr → ₹25 crRules 2025 PA Master Direction
Read more about payment aggregator licensing
02
PA-P

Offline Payment Aggregator (PA-P) authorisation

Until 2025, aggregators that collected payments at physical stores were outside the RBI’s licensing net. The 2025 Master Direction changed that. PA-P now covers transactions where the card or phone and the acceptance device are in the same place, such as POS terminals and QR standees.

Standalone PA-P businesses had to apply by 31 December 2025. If you are entering this market now, you need authorisation before you start. If you are an existing PA adding offline acquiring, you need a revised certificate from the RBI.

Net worth ₹15 cr → ₹25 crCovers POS terminals, QR standees
Read more about PA-P licensing
03
PA-CB

Cross-Border Payment Aggregator (PA-CB) authorisation

PA-CB applies to aggregators that handle cross-border current account transactions through e-commerce. It comes in two forms: inward, for Indian exporters receiving payments from abroad, and outward, for Indian buyers paying overseas merchants.

The rules here sit at the meeting point of the PSS Act and FEMA. Inward and outward funds must be kept in separate accounts. Per-transaction limits apply, and the paperwork with your AD bank matters as much as the RBI filing. We structure the flow, the banking arrangements and the application together, so one does not hold up the other.

Net worth ₹15 cr → ₹25 crLaws PSS Act + FEMA
Read more about PA-CB licensing
04
PPI

Prepaid Payment Instrument (PPI) license

A wallet or prepaid card that can be used only at your own business (a closed system PPI) does not need RBI authorisation. Once it can be used at other merchants, it does. The net worth bar is lower than for aggregators, at ₹5 crore to apply, but the PPI Master Direction is detailed on KYC levels, load limits, interoperability and escrow.

We help you choose the right PPI category for your product, design the KYC journey and draft the compliance framework the RBI reviews.

Net worth ₹5 cr → ₹15 crRules PPI Master Direction
Read more about PPI licensing
PG vs PA

Payment gateway or payment aggregator? Getting the classification right

The RBI treats a payment gateway as a technology provider. It routes and processes payment data but never holds merchant funds, so it does not need authorisation. Many businesses describe themselves as gateways while their contracts and settlement flows say otherwise.

We review your agreements and fund flows and give you a written view on where you stand. If you are close to the line, we show you how to restructure so you stay a gateway, or how to apply as a PA if that suits your plans.

Read more about payment gateway regulation
Payment gateway compared with a payment aggregator fund flow

Other payment system approvals

Bharat Bill Payment System (BBPS)

BBPS is run by NPCI Bharat BillPay Limited (NBBL) and governed by the RBI’s BBPS Directions, 2024. Businesses join as Bharat Bill Payment Operating Units (BBPOUs). A Customer Operating Unit serves people paying bills, and a Biller Operating Unit brings billers onto the system. Some do both.

The good news for many fintechs is that a bank or an authorised non-bank PA does not need a separate BBPS authorisation. It only has to inform the RBI before it starts. The catch is that a non-bank BBPOU handling funds is treated as a PA and needs a dedicated BBPS escrow account. We advise on which role fits, the NBBL onboarding, and agreements with billers, agent institutions and technology providers.

Trade Receivables Discounting System (TReDS)

TReDS platforms let MSMEs sell their invoices to banks and NBFCs so they get paid faster. In June 2026, the RBI replaced the old TReDS guidelines with a single Master Direction. New operators need ₹25 crore net worth, and existing ones have until 31 March 2028 to meet it.

TReDS is a small field with five authorised platforms, so applications are closely examined. We help with the eligibility review, shareholding structure, governance framework and the application itself.

White Label ATMs (WLA)

Non-bank companies can own and run ATMs under their own brand, with a sponsor bank handling settlement. The entry bar is high. You need ₹100 crore net worth, maintained at all times. Foreign investment of up to 100% is allowed under the automatic route.

We advise on eligibility, the sponsor bank arrangement, outsourcing contracts and the RBI application.

No extra licenseBBPS for banks and
authorised PAs
₹25 croreNet worth for a
new TReDS operator
₹100 croreNet worth for a
white label ATM operator

How RBI authorisation works, and where we fit in

Every application now goes through the RBI’s online PRAVAAH portal. Under the Master Directions issued on 15 June 2026, new authorisations are valid perpetually, so getting the first application right matters more: a rejected or withdrawn application can trigger a cooling-off period before you can apply again.

RBI payment system authorisation process on the PRAVAAH portal
7Steps from fund flow
to launch
Start with step one
  1. 01

    Map the fund flow.

    We start with a diagram of how money moves: who pays, which accounts it touches, when it is settled and who carries the risk. The classification follows from this, not from your pitch deck.

  2. 02

    Confirm the category and eligibility.

    We identify the applicable directions, the net worth test, the foreign investment rules and any FATF-related shareholding restrictions.

  3. 03

    Build a qualifying entity.

    This covers incorporation or restructuring, objects clause changes in the MoA, board composition, fit-and-proper declarations for directors, and capital planning to reach the net worth threshold.

  4. 04

    Prepare the application.

    We draft the business plan, the policies the RBI asks for, the escrow arrangement with your bank and the auditor’s net worth certificate in the prescribed format.

  5. 05

    File and respond.

    We file on PRAVAAH and manage the RBI’s questions. Answering them quickly and consistently is what keeps the file moving.

  6. 06

    Get launch-ready.

    We put in place merchant and partner agreements, the grievance redressal mechanism and the system audit.

  7. 07

    Stay compliant.

    This means the annual net worth certificate, system and cyber audit reports, change-in-control approvals and RBI inspections. We offer this as a separate engagement.

Who we work with

Our clients range from two-founder startups preparing their first RBI filing to international payment companies setting up an Indian subsidiary. They include:

Fintech startups building payment, wallet or bill payment products
Existing payment aggregators adding PA-P or PA-CB to their license
Export platforms and marketplaces collecting money from overseas buyers
E-commerce and SaaS businesses checking whether their checkout model needs a license
Fintech founders and payment companies we advise
Payment gateways and orchestration platforms that want a clear view of their regulatory position
Foreign payment groups and investors entering India, including those dealing with FDI and FATF-related questions
MSME finance platforms and ATM operators
Building something else? Tell us about it

Why clients come to us

01

We start with the fund flow.

Most licensing mistakes come from a wrong classification. We settle that first, in writing, before any money is spent on the application.

02

We work alongside your bank and auditor.

An RBI file depends on the escrow bank, the statutory auditor and, for PA-CB, the AD bank. We coordinate with all of them, so you are not passing messages between advisers.

03

We tell you when you don’t need a license.

If a partnership with an authorised PA or a restructured flow gets you to market faster, we will say so.

04

We stay current.

The RBI rewrote the PA rules in 2025 and the authorisation and TReDS rules in 2026. Our advice reflects the directions in force today, not the circulars from five years ago.

Frequently asked questions

Can’t find what you’re looking for? Ask us directly and a member of our payments team will reply.

Ask a question

Yes, if you operate a payment system. Section 4 of the PSS Act, 2007 bars anyone other than the RBI from operating a payment system without its authorisation. Collecting and settling funds for merchants, issuing open-loop wallets and running bill payment or ATM networks all qualify. Purely technical services, such as a payment gateway that never handles funds, do not.

A non-bank applicant needs ₹15 crore net worth when it applies. It must reach ₹25 crore by the end of the third financial year after authorisation and keep it there. The same thresholds apply to PA-O, PA-P and PA-CB.

PA-O covers online transactions, where the customer and the acceptance device are in different places. PA-P covers in-person transactions, such as at POS terminals. PA-CB covers cross-border e-commerce payments, either inward (exports) or outward (imports). All three are governed by the RBI’s 2025 Master Direction on Payment Aggregators.

No, provided it only supplies the technology and never holds or settles merchant funds. If your gateway receives money into its own account before passing it on, the RBI will treat it as a payment aggregator.

The license is granted to a company incorporated in India, so a foreign group usually applies through an Indian subsidiary. Foreign investment in most payment activities is permitted, subject to FDI rules and RBI restrictions on investment from FATF non-compliant jurisdictions.

There is no fixed statutory timeline. In practice, it depends on the category, how complete your application is and how quickly you answer the RBI’s queries. Preparing a strong file usually takes us 6 to 10 weeks. RBI scrutiny then commonly runs several months.

New authorisations granted under the June 2026 Master Directions are perpetual, subject to continuing compliance. Some existing operators may first get a time-bound renewal before moving to perpetual validity.

Yes. An authorised PA can also act as a BBPOU without separate authorisation, and a company can hold PA and PPI authorisations together if it meets each set of conditions. Each activity is assessed on its own, so plan the structure before you apply.

Talk to us about your payment business

Tell us what you are building and how money will move through it. Within a short first call, we will tell you which RBI framework applies, whether you meet the entry criteria today and what the realistic path to authorisation looks like.

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Last reviewed: . This page is general information about Indian payment regulation, not legal advice. RBI directions, eligibility criteria and net worth thresholds change from time to time, and no outcome on any application can be guaranteed.

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