Tata Pay gets payment aggregator license: Why it is significant
What's the story
The Tata Group's digital payments app, Tata Payments, has been granted a payment aggregator (PA) license by the Reserve Bank of India (RBI), reports the Economic Times (ET). This move allows the company to facilitate e-commerce transactions on its platform, joining the likes of Razorpay, PhonePe, and Google Pay. A founder of a digital payment start-up stated, "With the payment aggregator license, Tata can power all e-commerce transactions within its subsidiary entities which will help it manage funds better."
Details
Tata Pay's journey and expansion plans
Tata Pay operates under Tata Digital, the subsidiary responsible for the group's digital businesses. In 2022, the conglomerate launched its digital payments app on the Unified Payments Interface (UPI) in collaboration with ICICI Bank. Although the Tata Group has been working on an extensive financial services strategy, consumer traction remains limited for now. The group also holds a license to operate 'white label ATMs' in rural India through its subsidiary Tata Communications under the brand name Indicash.
What Next?
DigiO also secures PA licence
In other news, Bengaluru-based identity verification start-up DigiO has also secured a PA license. Supported by investment platform Groww, DigiO provides digital identification for various fintechs and will now be able to offer in-payment services as well. The RBI had previously granted the first batch of PA licenses and allowed new merchant onboarding for Razorpay and Cashfree after nearly a year.