Fintech Law Advisory – Regulation Of Cross Border Payment Aggregators

INTRODUCTION

The RBI issued a Circular dated October 31, 2023, titled "Regulation of Payment Aggregator – Cross Border (PA - Cross Border)" ("Circular"). The Circular primarily regulates entities that facilitate the processing or settlement of cross-border payment transactions for the import and export of goods and services (referred to as "PA-CB Entities"). The Circular creates a robust framework for the regulation and supervision of PA-CB Entities and introduces a licensing requirement which was previously reserved for payment aggregators. Unlike earlier, all PA-CB Entities are now mandated to obtain a license from the RBI under the Circular.

KEY TAKEAWAYS

Existing PA-CB Entities have to apply for the RBI license by April 30, 2024, and they are permitted to continue providing PA-CB services in the interim. However, PA-CB Entities have to ensure compliance with certain norms prescribed under the Circular by 31 January 2024. These include norms on