RBI Payment Aggregator vs PA-Cross Border: Which Authorisation?

One direction, three categories

On 15 September 2025 the Reserve Bank of India issued the Reserve Bank of India (Regulation of Payment Aggregators) Directions, 2025 (RBI/DPSS/2025-26/141). It brings the earlier payment aggregator circulars of March 2020, March 2021 and October 2023 into a single master direction and repeals them. Authorisations granted under the earlier circulars continue under the new direction.

The direction recognises three categories of payment aggregator (PA):

• PA-Online (PA-O): aggregation of payments for online or e-commerce transactions;
• PA-Physical (PA-P): aggregation for face-to-face or proximity transactions, such as point-of-sale acceptance;
• PA-Cross Border (PA-CB): aggregation for cross-border transactions, split into PA-CB facilitating inward transactions and PA-CB facilitating outward transactions.

So the question is less “PA or PA-CB” as two separate regimes, and more which categories of PA business an entity will carry on under the same framework.

What counts as payment aggregation

The direction defines a payment aggregator as an entity that facilitates aggregation of payments made by customers to merchants through one or more payment channels and subsequently settles the collected funds to those merchants. The defining feature is handling of funds.

A payment gateway, by contrast, provides the technology infrastructure to route and process a payment transaction without any involvement in handling funds. Payment gateways do not need authorisation, although the direction encourages them to follow its baseline technology recommendations.

The direction also provides that a PA business shall not carry out marketplace business.

Who needs which authorisation

• Banks do not require authorisation to carry on PA business. Banks that act as acquiring banks for non-bank PAs have their own obligations under the direction, such as merchant policies.
• Non-banks need a Certificate of Authorisation from the Reserve Bank under the Payment and Settlement Systems Act, 2007, covering the category or categories of PA business they carry on. An authorised PA that wants to start another category must inform the Reserve Bank at least 30 days before commencing it.

In practical terms:

• A company collecting payments for Indian merchants selling online in India needs PA-O coverage.
• A company settling card or UPI payments collected at physical outlets needs PA-P coverage.
• A company collecting payments from overseas buyers for Indian exporters, or from Indian buyers for overseas merchants, needs PA-CB coverage for inward or outward transactions, as the case may be.

The earlier position, under which PA-CB was regulated by a separate October 2023 circular, has been folded into the 2025 direction. Expertvuw’s pages on RBI payment aggregator authorisation and PA-Cross Border set out the application stages for each.

Eligibility and net worth

For a non-bank, the main eligibility points in the direction are:

• the applicant must be a company incorporated in India under the Companies Act, 2013;
• it must have a minimum net worth of ₹15 crore at the time of applying;
• it must reach a minimum net worth of ₹25 crore by the end of the third financial year and maintain it thereafter;
• net worth is computed as prescribed, with compulsorily convertible preference shares counted and deferred tax assets excluded, and certified by the statutory auditor in the prescribed format.

The same net worth thresholds apply whichever category is sought; the direction does not set a separate figure for PA-CB. The statutory auditor’s certificate is issued by an independent chartered accountant.

Application route

Non-bank applicants apply to the Reserve Bank’s Department of Payment and Settlement Systems through the RBI’s online portal. Where the applicant is regulated by another financial sector regulator, a no-objection certificate from that regulator is required and the application must be made within 45 days of obtaining it.

The application is generally supported by:

• a Memorandum of Association that covers the proposed activity of operating as a PA;
• audited financial statements and the net worth certificate;
• shareholding, ownership and management details, including fit and proper information on promoters and directors;
• a business plan and a description of the technology and security set-up;
• board-approved policies on merchant onboarding, KYC/AML, refunds and grievance redressal.

After authorisation, any takeover, acquisition of control or change in management of a non-bank PA must follow the Reserve Bank’s circular of 4 July 2022 on change in control of non-bank payment system operators.

Operating requirements that differ for PA-CB

Cross-border aggregation carries additional conditions:

• Transaction limit: the maximum value per PA-CB transaction is ₹25 lakh.
• Separate accounts: funds for inward transactions are held in an Inward Collection Account and funds for outward transactions in an Outward Collection Account, maintained with Authorised Dealer Category-I banks. Inward and outward funds may not be co-mingled or netted.
• Foreign exchange: a PA-CB may buy or sell foreign currency only from or to an Authorised Dealer.
• Merchant onboarding: a PA-CB may onboard merchants located abroad directly or through agreements with e-commerce marketplaces, and must carry out due diligence on them.
• FEMA: cross-border flows remain subject to FEMA and the related reporting through the AD bank.

All PAs, domestic and cross-border, must carry out merchant due diligence, check the Central KYC Records Registry where applicable, register with FIU-IND and monitor merchant transactions on an ongoing basis. Settlement to merchants follows the timelines set out in the direction.

Where PPI authorisation fits

PA authorisation allows an entity to collect and settle payments for merchants. It does not allow the entity to issue prepaid payment instruments such as wallets or prepaid cards, which need a separate authorisation. On 22 April 2026 the Reserve Bank released a draft Master Direction on Prepaid Payment Instruments for public comments, so entities planning a PPI business should check the current framework before applying. Expertvuw’s PPI licence page explains that route.

Transition for existing entities

The direction set out a transition for entities already in the business. Existing authorised PAs and pending applicants carrying on PA-P business had to inform the Reserve Bank by 31 December 2025, entities carrying on only PA-P business had to apply for authorisation by the same date, and entities that did not apply were required to wind up that business by 28 February 2026. New merchant onboarding from 1 January 2026 follows the prescribed due diligence requirements.

Practical points

• Map each payment flow first: domestic online, physical, inward cross-border or outward cross-border. The categories in the application should match the flows.
• Plan capital for both thresholds: ₹15 crore at application and ₹25 crore by the end of the third financial year.
• Build policies and technology controls before applying; the Reserve Bank reviews them as part of the process.
• Approval timelines are not fixed in the direction and typically depend on the completeness of the application and the Reserve Bank’s queries.

Expertvuw’s team can help you assess which PA categories apply to your business and prepare the application, with certification and audit work handled by independent licensed professionals.

Sources

• RBI – Reserve Bank of India (Regulation of Payment Aggregators) Directions, 2025 (RBI/DPSS/2025-26/141, 15 September 2025)
• RBI press release, 15 September 2025 – issue of the Payment Aggregator Directions
• RBI – Regulation of Payment Aggregator – Cross Border (PA-CB), circular dated 31 October 2023 (now repealed)
• RBI – Draft Master Direction on Prepaid Payment Instruments, 22 April 2026