What is a payment gateway license?
The Reserve Bank of India issues a payment gateway license to companies that want to build and operate a payment gateway. This license is promoted by the RBI to:
- To encourage the use of encrypted online transactions.
- To ensure that the payment gateway does not compromise customers’ or sellers’ personal information.
- To ensure that no information is at risk.
- To ensure that users in India are not charged any additional payment gateway fees.
What are the Main Features of a Payment Gateway?
- Merchant Agreement: Payment Gateway Licensees must first enter into an arrangement with the retailer who will be using the payment gateway.
- Secure electronic transactions: This is a type of security system that verifies user information without peeking. It authenticates the details in this way without jeopardizing the security of the user’s credit card, debit card, or net banking information.
The procedure for obtaining a payment gateway license
- In order to make the process of obtaining a payment gateway license as simple as possible, India has formulated the following steps:
- Submit the payment gateway application to the Chief Manager of the PSS Department using FORM A.
- Don’t forget to pay the payment gateway registration fee along with the submission.
RBI will begin its evaluation once you submit your application for a payment gateway license. It will verify the information you provided in your applications.
When RBI determines that you have submitted a complete application, they start scrutinizing it based on the following criteria:
- What services will be provided by the proposed payment system?
- What technological principles would be used in the development of the proposed payment system?
- What protection measures are in place to ensure that electronic transactions via your payment system are secure?
- In your payment system, what mode of transfer do you use?
- What is the method for delivering payment guidance to the customer, and how does it affect the user’s payment obligations?
- What is the applicant’s financial situation?
- What terms and conditions have been established to regulate the relationship between payment providers and customers?
- What monetary and credit policies have you put in place?
- When will the applicant begin operating the payment gateway company after receiving authorization?
- The RBI will give you the payment gateway certification of conducting payment gateway business in FORM B once it has approved your submission.
Learn more about Payment Gateway License from RBI
