Cashfree Payments, a payments and banking technology company, receives in principle approval from the Reserve Bank of India (RBI) to operate as a payment aggregator.

Now, the State Bank Of India-backed firm Cashfree Payments is the latest player to get an in-principle approval for a payment aggregator (PA) license

The approval brings relief for the company, as its application had been pending for a long time, leading to speculation on whether it would receive approval.

A payment aggregator license allows firms to process large numbers of payments and also be involved in settling payments. PA/PG platforms have been offering payment aggregation, but the RBI in 2020 asked them to apply for a license.

This will enable Cashfree to join Razorpay, Stripe, Pine Labs, MSwipe and Innoviti in receiving the RBI nod for a payment aggregator license.

At least 185 fintech firms — including big names like Cred, Razorpay and PhonePe — had submitted proposals seeking the license.

As of now, Pine Labs, Razorpay, Stripe and 1Pay Mobileware are the only companies to get approval for PA/PG license officially. The central banking agency is expected to release the names of selected entities soon.

In March 2020 the payment aggregator framework was officially introduced, to mandate firms approved by the RBI to allow them to acquire and offer payment services to merchants.

RBI has been holding presentations with payment gateway providers and other fintech firms that have applied for the license for quite a while. However, it has been strict in its evaluation process.

Some online gateways and payment fintech firms which have sought the license, came under intense scrutiny of late for issues related to know-your-customer (KYC) guidelines and past dealings with cryptocurrency exchanges as well as with gaming apps.

The RBI rejected over 100 applications for PA as many firms were engaged in cryptocurrency trading, betting, gambling and didn’t meet its criteria of Rs 15 crore net worth. MobiKwik-owned Zaakpay is apparently facing rejection because it had an inadequate net worth