RBI Issues Master Direction on Regulation of Payment Aggregators, Strengthens KYC and Cross-Border Transaction Rules

The Reserve Bank of India (RBI) has issued a comprehensive Master Direction to regulate payment aggregators (PAs), aiming to enhance the security and efficiency of digital payment systems. The new guidelines impose stricter Know Your Customer (KYC) norms for PAs, ensuring that they conduct thorough due diligence on merchants and customers. Additionally, the direction introduces enhanced monitoring of cross-border transactions to prevent money laundering and other illicit activities. The RBI has also mandated that PAs maintain a minimum net worth and adhere to capital adequacy requirements to ensure financial stability. These measures are designed to protect consumers, promote transparency, and foster trust in the digital payment ecosystem, aligning with global best practices.