The Reserve Bank of India has given a significant boost to PhonePe, a fintech company providing online payment services, just before Diwali. The RBI has approved PhonePe as an online payment aggregator. This will enable the company to easily provide payment collection and settlement services to shopkeepers and business owners. Previously, it was only authorized for online payments.
PhonePe received the authorization to operate as an online payment aggregator last Friday. This will allow the company to expand its merchant network, with a focus on small and medium businesses (SMEs). Yuvraj Singh Shekhawat, Chief Business Officer (CBO) of PhonePe’s merchant business, stated that with this aggregator, PhonePe will be in a position to provide excellent services to businesses, especially in the SME segment, who previously did not receive better services.
This decision will help PhonePe further expand its payment gateway. These gateways provide merchants with immediate onboarding, easy integration for developers, and a smooth checkout experience to increase payment success rates. Founded in 2016, PhonePe is one of India’s largest fintech companies. It has over 650 million registered users, a network of 45 million merchants, and more than 360 million daily transactions. Its portfolio extends to payments, lending, insurance distribution, wealth products, hyperlocal e-commerce (PinCode), and the Indus Appstore.
**Online Payment Aggregator**
An online payment aggregator is a service that helps businesses (merchants) easily accept online payments from their customers.
1. **Adding Merchants:** A business (like an online store) signs up with a payment aggregator. The aggregator onboards the merchant onto its platform, including KYC and business details verification.
2. **Payment Gateway Integration:** The aggregator integrates its payment gateway into the merchant’s website or app. This is a type of digital “cash counter.”
3. **Multiple Payment Options:** The aggregator supports various payment methods like credit/debit cards, UPI, net banking, and wallets like PhonePe, Google Pay, etc. The customer chooses their preferred payment option.
4. **Payment Processing:** When the customer makes a payment, the aggregator processes the money. It coordinates with banks, card networks like Visa, Mastercard, and other financial companies. When the payment is successful, the user receives confirmation, and if the payment is rejected, the reason is also explained.