In a recent development, Amazon Pay, the fintech arm of Amazon India, has secured a Payment Aggregator (PA) licence from the Reserve Bank of India (RBI).
What Happened: The RBI has granted Amazon Pay, along with a total of 10 entities since the beginning of 2024, the PA licence as part of the latest batch of companies to receive it. Other notable recipients include Zomato, Juspay, Decentro, Mswipe, Zoho, and Stripe.
The licence, issued on February 20, empowers Amazon Pay to serve as a middleman between merchants and payment processors or banks. With this, the platform can now accept payments on behalf of various merchants, consolidate these funds, and distribute them to the respective merchants.
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Beyond the PA licence, Amazon Pay also possesses a Prepaid Payment Instruments (PPI) licence, which allows it to offer wallet services like Amazon Pay balance: Money, in compliance with RBI regulations.
The recent approval places Amazon Pay in line with other fintech firms that have been authorised by the central bank to operate as payment aggregators, such as Razorpay and Cashfree Payments, which received their licences in December of the previous year.
Why It Matters: This development is significant as it allows Amazon Pay to expand its operations and offer a wider range of services to its users. The PA licence will enable Amazon Pay to consolidate payments from various merchants, thereby simplifying the payment process for customers and merchants alike. Moreover, this aligns Amazon Pay with other major players in the fintech industry, potentially increasing competition and innovation in the sector.
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