Payment gateway License in India has paved the way of digital transformation. But has it done so fairly? When we look at the eligibility requirements to obtain this particular license, we see them as cumbersome requirements. Pandemic has turned many billionaires into millionaires and millionaires into common salaried folks. Forcing them to abide by these cumbersome requirements doesn’t seem fair.
However, does the RBI has any choice in the matter? Starting a payment gateway in India is a complex and tech-oriented business that can only be handled by experts bearing a specific set of skills. In that regard, the “cumbersome” requirements for payment gateway certification seem “compulsory” to many eyes.
So, what’s the answer here? And is the process of payment gateway license in India really that unfair. Let’s find out.
The “Cumbersome” eligibility requirement of payment gateway certificate
Following are the eligibility requirements that every applicant has to abide by before he or she can apply for the license:
- A payment gateway company must be incorporated beforehand.
- The applicant’s net worth should be INR 15 Crore
- The applicant’s business plan should be able to increase his or her net worth by INR 25 Crore after three years of operation.
- While there is no net worth requirement for foreign payment gateways, RBI has imposed restrictions on how much money these portals can help transfer electronically.
- The payment gateway software should have the approval of PCY DSS.
Let’s now discuss on the fairness of above points:
- Company incorporation is a fair requirement. It provides structure to the business of payment gateway. Additionally, it institutionalizes the payment gateway’s operation.
- The net worth requirement: The hardware requirement to start a payment gateway is quite high. That’s why, commenting on the fairness of this requirement won’t be the right thing to do. The Reserve bank of India aspects your payment gateway to bear the burden of electronic transactions done by Indian citizens. Thus, they only want those who can afford it to start such a business.
- The applicant’s business plan has to be strong. However, that’s where the things get complicated. If you’re a start-up NBFC, or a start-up bank, you need some pretty good hold over business models that can guarantee that your business grows to almost double in 3 years. Most entrepreneurs these days are novices. And even though they have a good business plan, it rarely pans out in the way it was originally made. Thus, we can say that to some extent, this requirement of payment gateway license in India is kind of unfair.
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- Imposing restrictions on foreign payment gateways is a fair choice. India’s e-payment market is still new. And, we need to make it better by promoting more native payment gateways. Thus, imposing the restriction on foreign payment gateway by restricting the amount of money that can be transferred through them helps the customers choose Indian wallets. So, in a way, it’s a fair choice. Second thing it does is that it helps in reducing the foreign influence on Indian soil.
- Let’s now discuss the final eligibility requirement, the PCI DSS certification. Naturally, it’s the duty of your payment gateway to protect the information of the end users while money is being transferred through it. Thus, in all terms, this requirement is also fair to obtain RBI payment gateway license.
Conclusion
If the payment gateway license cost seems too much to you, there is a reason for that. RBI needs to take the critical task of electronic money transfer seriously. Thus, it is only looking for entrepreneurs who have the financially and technical capabilities to support such a business. Yes, it might seem unfair to many, but you need to understand that when it comes to payment gateway certification, high accountability can only be held by those who can afford it.