RBI tightens rules for offline payments

MUMBAI: RBI on Sept 15 issued new directions for payment aggregators (PAs), mandating stricter merchant vetting and extending oversight to physical payments.

RBI's directions make PAs the first line of defense against fraud by requiring stronger KYC and risk-based due diligence, with larger merchants facing tighter checks. For the first time, offline PAs handling proximity payments - from kirana stores to big retail chains - must seek RBI authorisation and follow the same compliance standards as online platforms.

The rules consolidate all PA regulations into a single master direction covering online, offline, and cross-border players, simplifying compliance. They also tighten norms for escrow accounts, mandating stricter controls on fund flows from delivery-versus-payment transactions to safeguard customers and merchants.