An Overview of Payment Gateway License
Do you want to set up a Payment Gateway business in India? Then, the first step is to obtain a Payment Gateway License from the Reserve Bank of India (RBI) in order to run the gateway legally.
In today’s era of technology and cashless transactions, a payment gateway plays a vital role in everyday business operations. It acts as a secure bridge between the customer and the seller, allowing electronic transactions to take place safely. The platform ensures a confidential path where customers can enter their payment details and complete transactions smoothly.
To start a Payment Gateway business in India, obtaining an RBI Payment Gateway License is mandatory. For this, the applicant can register as a sole proprietorship, partnership, or company, provided the eligibility criteria of the Reserve Bank of India (RBI) are met.
At DrNBFC, we assist interested applicants throughout the process of obtaining a Payment Gateway License from start to finish.
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Benefits of Getting an RBI License for Payment Gateway
Given below are the benefits of getting an RBI license for payment gateway-
- PCI-DSS Wallet- A PCI-DSS compliant wallet system allows users to securely store their payment details, such as card or bank account information, for recurring transactions. For example, if you regularly shop on Amazon, you can save your details on their app or website, and the payment gateway ensures protection against potential cybersecurity threats.
- White Label Wallet- It facilitates a white label wallet, a mobile wallet app that enables users to make digital transactions conveniently. You can transfer money from your bank account into the wallet and then use it to pay on different apps or websites, making transactions simple. It is one of the key benefits of obtaining an RBI license for a payment gateway.
- Fraud Screening Tools- Payment gateways integrate advanced fraud screening tools to protect sensitive information. These include Card Code Value (CVV), Card Verification Value (CVV2), and Address Verification Service (AVS). Their main purpose is to detect and prevent fraudulent transactions, ensuring that buyers and sellers can trade safely and confidently.
- Cost-Effective for Small Transactions- Payment gateways are cost-efficient for processing small transactions. Instead of charging high start-up fees or fixed costs, they apply a variable merchant fee on each successful transaction, making them affordable for businesses with lower transaction volumes.
- Easy Access Payments- Unlike traditional methods, payment gateways allow you to start processing e-commerce payments immediately after signing up. With features like mobile swipes, you can make payments instantly, anytime and anywhere.
- Quick Approvals- In India, integrating a payment gateway into your website is fast and simple, typically taking only 3 to 7 working days for approval. It is one of the significant benefits of obtaining an RBI license for a payment gateway.
Get a Payment Gateway License Online with DrNBFC
Securing a Payment Gateway license in India is a complex process that can take 30 to 90 days. To ensure a smooth and timely approval from the RBI, it is crucial to follow the correct procedure and submit accurate documents.
For a fast and effortless way to get your Payment Gateway license online, trust the experts at DrNBFC.
Trust our Expert Consultants for your
Payment Gateway License
Not able to find the right Payment Gateway license consultants yet? DrNBFC is here to deliver end-to-end RBI payment aggregator solutions & quick processing.
Benefits of Getting an RBI License for Payment Gateway
Given below are the benefits of getting an RBI license for payment gateway-
- PCI-DSS Wallet- A PCI-DSS compliant wallet system allows users to securely store their payment details, such as card or bank account information, for recurring transactions. For example, if you regularly shop on Amazon, you can save your details on their app or website, and the payment gateway ensures protection against potential cybersecurity threats.
- White Label Wallet- It facilitates a white label wallet, a mobile wallet app that enables users to make digital transactions conveniently. You can transfer money from your bank account into the wallet and then use it to pay on different apps or websites, making transactions simple. It is one of the key benefits of obtaining an RBI license for a payment gateway.
- Fraud Screening Tools- Payment gateways also integrate fraud screening tools to protect sensitive information. These include Card Code Value (CVV), Card Verification Value (CVV2), and Address Verification Service (AVS). Their main purpose is to detect and prevent fraudulent transactions, ensuring buyers and sellers can trade safely and confidently.
- Cost-Effective for Small Transactions- Payment gateways are cost-efficient for processing small transactions. Instead of charging high start-up fees or fixed costs, they apply a variable merchant fee on each successful transaction, making them affordable for businesses with lower transaction volumes.
- Easy Access Payments- Unlike traditional methods, payment gateways allow you to start processing e-commerce payments immediately after signing up. With features like mobile swipes, you can make payments instantly, anytime and anywhere.
- Quick Approvals- In India, integrating a payment gateway into your website is fast and simple, typically taking only 3 to 7 working days for approval. It is one of the significant benefits of obtaining an RBI license for a payment gateway.
Get a Payment Gateway License Online with DrNBFC
Securing a Payment Gateway license in India is a complex process that can take 30 to 90 days. To ensure a smooth and timely approval from the RBI, it is crucial to follow the correct procedure and submit accurate documents.
For a fast and effortless way to get your Payment Gateway license online, trust the experts at DrNBFC.
How to Get a Payment Gateway License in India- Step-by-Step Guide
The step-by-step process to get a payment gateway license in India is mentioned below-
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Step 1: Filing of Application
The applicant must file an application for a Payment Gateway License in FORM A, addressed to the Chief Manager of the Department of PSS.
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Step 2: Payment of Registration Fee
Along with the application, the applicant must pay the prescribed registration fee for the license.
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Step 3: Application Assessment
After receiving the application, the RBI will begin its assessment to verify and cross-check the details provided.
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Step 4: Examination of Application
If the details are found to be accurate, the RBI will scrutinize the application on various grounds, such as technical standards, security systems, methods of transaction processing, payment instruction mechanisms, financial stability, and compliance with monetary and credit policies.
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Step 5: Grant of License
If the RBI is satisfied with the application, it will issue the Payment Gateway License in FORM B. Typically, the RBI takes around six months from the date of filing to grant the license, unless complications arise.
Eligibility Criteria for RBI Payment Gateway License
The eligibility criteria for the RBI Payment Gateway License are as follows:
- The applicant must be a private or public company registered under the Companies Act, 2013.
- The company must hold a valid PCI DSS certification.
- The company should have a minimum net worth of INR 15 crore.
- The net worth must be increased to INR 25 crore within 3 years of business operations.
- NBFCs and banks must comply with all requirements specified by the Reserve Bank of India.
- Entities with FEMA authorization are not subject to capital requirements.
IT Prerequisites for Securing Payment Gateway License RBI
The list of essential IT prerequisites for securing a payment gateway license RBI is as follows:
- Information Security Governance- The license holder must conduct a comprehensive security risk assessment covering people, IT systems, and business processes. This helps identify risk exposures, implement remedial measures, and manage residual risks. Security audits should be carried out by a CERT-In empaneled auditor.
- Security Incident Reporting- Any cardholder data breach or security incident must be reported to the RBI within the prescribed timeframe.
- Cybersecurity Audit and Reports- The license holder must submit quarterly internal audits and annual external audits to the IT committee. These reports are mandatory to ensure legal compliance with RBI guidelines.
- Cryptographic Requirements- Businesses must use encryption algorithms that comply with internationally accepted standards. These algorithms are subject to periodic review and checks by the global cryptographic community.
- Data Sovereignty- Payment gateway businesses must ensure that all data is stored within infrastructure located in India and is not subject to any external jurisdiction.
- Data Security in Outsourcing- If services are outsourced, agreements must include a “right to audit” clause, allowing authorized entities, regulators, or their appointed agencies to conduct security audits. Alternatively, the third party must submit independent annual security audit reports to the business.
- Payment Application Security- Payment applications must be developed in compliance with PA-DSS guidelines. Additionally, businesses must review merchants’ PCI-DSS compliance status during the onboarding process.
Documents Required for Payment Gateway License Online
The list of documents required for a payment gateway license online is as follows:
- Certificate of Incorporation
- PAN card of the directors
- Digital Signature Certificate of the directors
- Address proof of the registered office
- Details of the company’s bank accounts
- Business plan for the next five years
- GST registration certificate
Requirements for Payment Gateway License in India
The list of the basic requirements for the payment gateway license in India is as follows:
- Minimum of two directors and two members
- Address details of the business setups
- Business strategy for five years
- Company’s current account in the name of the company along with PAN details
- System flow and code testing report by the software certifying agency
- The registration process will be subject to the RBI guidelines
- GST registration is mandatory
- PCI DSS compliance
Types of Payment Gateway Providers
There are two types of payment gateway providers:
Second-Party Providers
These systems are more expensive, with setup costs starting from around ₹30,000. Examples include banks like HDFC, ICICI, and Axis. However, they offer a lower Transaction Discount Rate (TDR) along with reduced transaction fees.
Third-Party Providers
In comparison, third-party providers have lower setup costs than second-party providers. The TDR usually ranges between 2% to 4%. Some providers may also charge setup fees or annual charges, while others may waive them. Examples include EBS, CCAvenue, Payzippy, PayU, and DirectPay.
Partner With DrNBFC for Payment Gateway License
DrNBFC is India’s trusted consulting platform for Payment Gateway Licenses and various other services. Fintech entrepreneurs, startups, and established companies rely on us for seamless RBI license approval, compliance management, and risk-free operations. From NBFC registration to meeting NBFC annual compliance requirements, we’ve got you covered. Below are the reasons why DrNBFC is your ultimate partner for Payment Gateway License in India-
- Successfully completed 100+ Payment Gateway & Aggregator License projects
- Assisted 2000+ fintechs & startups in meeting RBI requirements with ease
- 10X faster turnaround time compared to competitors
- Risk mitigation & compliance solutions for hassle-free RBI approval
- In-depth knowledge of RBI guidelines for Payment Gateways & Aggregators
- Helped clients save crores in compliance costs & regulatory penalties
- Payment Gateway License support across 100+ cities in India
- Post-license support for compliance, technology, and business expansion
FAQs on Payment Gateway License
A payment gateway is a platform through which electronic financial transactions take place. It is a line between the customer and the seller.
The applicant company must have a net worth of at least 15 crores. Also, it should increase to Rs. 25 crores within three years of its business operations.
The payment gateway makes money by primarily charging from the transactions, subscription, setup and chargeback fees. Also, it earns income from each transaction by taking a percentage or fixed fees.
The list of services offered by payment gateways, apart from facilitating quick payments, includes delivery address verification, advanced visual system checks, computer fingerprinting technology, velocity pattern analysis, identity morphing detection, and calculation of tax for authorization of request transmitted to the processor.
The fee structure for the payment gateway license ranges from Rs. 16,00,000 to Rs. 25,00,000/-.
The time taken to grant the payment gateway license is a maximum of six months from the date of filing an application with the RBI.
You can start a payment gateway company by building an infrastructure, managing customer relationships, obtaining required certifications and other relevant compliances as per the RBI regulations and guidelines.
The Reserve Bank of India is the apex body that regulates the payment gateway licensing in India.
A payment gateway is required for entities engaged in business activities mostly related to online payments.
PayU is one of the best payment gateways in India, leading and empowering 5 lakhs + businesses.
