A Perspective On The Current Regulations On Payment Aggregators

The rapid transformation of the Indian economy into a cashless one, particularly with the establishment of e-commerce as a legitimate mode of consumerism, there has been an equally urgent need for innovating and adopting digital payment systems. On one hand, there was a need to bring the required technology into the foray and on the other hand, there needed to be a regulatory framework in place to govern the digital payment providers and systems. At its most nascent stage, the electronic payments space was regulated by Section 18 read with section 10(2) of the Payment and Settlement Systems Act, 2007 (the "PSS Act"). The aim of the PSS Act was to ensure a safe and effectual system of payments and settlement. At the time of its implementation, transactions were heavily dependent on cash or bank transfer, however, with the evolution of the digital payments system, these service providers came to be regulated by the Intermediaries Directions ("Intermediary Directions")