Cred receives RBI’s Nod for Payment Aggregation Business


Bengaluru-based fintech startup Cred has received in-principle approval from the Reserve Bank of India (RBI) to venture into the payment aggregation (PA) business. This approval allows Cred to intensify its presence in the merchant payments domain, positioning itself alongside industry players like Razorpay and Cashfree.

Typically, it takes approximately six months following the initial approval from the RBI for a company to secure the final authorization. Notably, recent recipients of the final PA license include CCAvenue, Innoviti Payments, and MSwipe.

Under the RBI’s framework, payment aggregators are empowered to oversee funds via an escrow account while providing value-added services alongside payment processing. Draft guidelines from the regulator suggest stringent know-your-customer protocols for merchants.

In addition to online merchant payments, Cred is forging ahead with plans to establish an offline payments arm featuring QR code-based ‘scan and pay’ transactions at retail establishments. Leveraging its existing Unified Payments Interface (UPI) infrastructure, Cred aims to bolster its offerings in this segment.

PA-P License
Cred may need to pursue a separate application for the payment aggregator-point of sale (PA-P) license. Clarity on the application process is expected upon the release of final guidelines.

Wealth Management Expansion
Cred’s strategic moves extend beyond payment aggregation, with its recent acquisition of Kuvera signaling an entry into the wealth management arena. Kuvera, boasting a clientele of around three lakh affluent customers, enriches Cred’s portfolio with its wealth products.

Financial Performance
Cred has reported a substantial revenue increase, reaching ₹1,400 crore in FY23 from ₹393 crore in FY22. However, its losses saw a marginal uptick, rising to ₹1,347 crore in FY23 from ₹1,280 crore in FY22.

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