What Is a Payment Aggregator? Meaning and RBI Rules in India

How a payment aggregator works

• The merchant signs up with the aggregator and completes KYC checks once.
• The aggregator gives the merchant a checkout, payment links, QR codes or APIs to accept payments.
• When a customer pays, the money is collected into the aggregator's escrow account with a bank, not into the aggregator's own account.
• The aggregator matches each payment to the right merchant and deducts its agreed fee.
• The balance is settled to the merchant's bank account on a fixed cycle, such as the next working day.
• The merchant gets reports to match settlements with orders, refunds and chargebacks.

Payment aggregator vs payment gateway

A payment gateway is the technology that carries a payment request from the checkout to the bank, card network or UPI and returns the result. It does not hold the merchant's money. A payment aggregator also handles the money: it onboards merchants, collects funds and settles them. Most well-known Indian providers do both, which is why the two terms are often mixed up. RBI regulates payment aggregators directly; pure gateway technology providers are covered by baseline technology recommendations.

Key RBI rules for payment aggregators

• Authorisation: a non-bank company must get RBI authorisation to work as a payment aggregator. Banks do not need separate authorisation.
• Net worth: RBI sets a minimum net worth for aggregators. Check the current RBI directions for the exact figure.
• Escrow account: customer money must be kept in an escrow account with a scheduled commercial bank and settled to merchants within set timelines.
• Merchant due diligence: aggregators must verify the merchants they onboard and check that they do not sell banned goods or services.
• Card data: aggregators and merchants cannot store full card numbers. Saved cards must use RBI-compliant tokenisation.
• Grievance and refunds: aggregators need a complaint-handling process and must handle refunds to the original payment method.
• Wider scope: RBI has also brought cross-border and in-store (physical) aggregators under its rules, so check which category a provider is authorised for.

How to choose a payment aggregator

• Check that the provider is authorised by RBI or works through an authorised partner. RBI publishes the list on its website.
• Compare payment methods: UPI, cards, netbanking, wallets, EMI and international cards.
• Ask about settlement time, how refunds are handled and how chargebacks are charged.
• Look at success rates and uptime, especially during sale days and peak hours.
• Check the reports and APIs for reconciliation with your accounting system.
• If you use more than one aggregator, consider payment orchestration to route payments between them from one integration.

Frequently asked questions