PayU has been granted in-principle approval from the Reserve Bank of India (RBI) to work as a payment aggregator. The move will enable the fintech company to onboard new merchants on the platform.
The RBI, in January 2023, asked PayU to reapply for the licence. As a result, the company stopped onboarding new customers. Market reports indicate the complex corporate structure of the fintech firm was one of the reasons contributing to the rejection.
The banking regulator has become extremely vigilant for the last few years. It has tightened its noose around several segments, including peer-to-peer lending, PA-PG, credit cards, buy now pay later, structure of NBFCs, etc.
PayU adds to the list of fintech firms having received the RBI nod for payment aggregator. These firms include Cashfree, EnKash, Juspay, Open, Razorpay and Infibeam et al.
The Economic Times report states that Cred has also been granted a payment aggregator licence. However, neither RBI nor Cred has officially confirmed the same.
PayU also plans to get listed on the stock exchanges with Initial Public Offerings (IPO). Other fintech firms eyeing IPO include MobiKwik, Navi and Pine Labs.
PayU has a merchant base of over 5 lakhs across credits, payments and PayTech. The company claims to have generated annualised volumes worth more than $60 billion.
The Indian entity of PayU recorded revenue growth of over 30% to $400 million for FY23. It also recorded impressive operational revenue of $211 million from the Indian market in the current fiscal, according to startup news India.
YFS Shares Opinion on PayU Receiving Nod for Payment Aggregator
The RBI nod will likely allow PayU to gain a good market share in the payment aggregation space. To operate without any interruptions, it will have to continue monitoring the organisational structure and operational mechanisms, reckons Your First Startup (YFS).