RBI's Payment Aggregator Regulations, Explained for Merchants

If you accept payments online, at a counter or from abroad, the business that collects the money and pays it to you is very likely a payment aggregator (PA), regulated by the Reserve Bank of India. On 15 September 2025, RBI issued a Master Direction on Regulation of Payment Aggregators that consolidates the rules those businesses follow. You don't have to comply with it yourself, but it shapes what your provider asks of you and what it must do with your money.

This post summarises the parts that matter most to merchants. It's a plain-language summary, not legal advice, and it quotes the Direction where the exact words matter.

The Direction separates two roles that are often confused. A payment gateway is defined as an entity that provides technology infrastructure to route and facilitate processing of a payment transaction without any involvement in handling of funds. A payment aggregator facilitates aggregation of payments made by customers to merchants, and subsequently settles the collected funds to those merchants.

For a merchant, the practical question is simple: who holds your customers' money between payment and settlement? That's the aggregator (or a bank), not a pure gateway. It's the entity whose rules on escrow and settlement protect you.

The Direction groups aggregators by where the payment happens.

The Direction requires a non-bank PA to maintain the funds collected on behalf of its merchants in a separate escrow account with a scheduled commercial bank in India. For cross-border aggregators, the equivalent accounts are called Inward Collection Accounts and Outward Collection Accounts, held with authorised dealer banks.

The Direction lists what may be credited to and debited from these accounts, and says they shall be used only for authorised PA business. For you, this is the reason your money isn't simply sitting in your provider's operating account while it waits to be settled.

Aggregators are responsible for due diligence on the merchants they onboard, which is why onboarding asks for documents, reviews your website and wants to know what you sell. Several details in the Direction explain requests you may have wondered about.

One rule customers notice directly: the Direction says a PA shall ensure that any charges, other than the price of the goods, service or investment, charged by a merchant are distinctly displayed to the payer before the transaction. If you add a convenience fee or surcharge, customers must see it before they pay.

The Direction also says a PA shall not place limits on transaction amount for a particular payment mode; that responsibility lies with the issuer. Limits you encounter on a card or UPI payment come from the customer's bank or the payment system's rules, not the aggregator.

For cross-border e-commerce, the Direction sets the maximum value per transaction for inward or outward transactions processed by a PA-CB at ₹25 lakh. Settlement in currencies other than rupees is permitted only for Indian exporters directly onboarded by the PA-CB handling the inward payment, and the PA-CB must give exporters' and importers' banks the documents they need to close entries in their export and import monitoring systems.

Large export receipts therefore usually still go through your bank directly, with the PA-CB route suited to e-commerce sales.

The Direction is direct on this point: a PA business shall not carry out marketplace business. Marketplaces run listings, orders and commissions; a regulated PA or bank collects and settles the money. If you run a marketplace, that division shapes how your payment flows can be designed.

None of this requires you to file anything with RBI. It does give you better questions to ask your provider.