Quick answer: in India, any entity that collects money from your customers and settles it to you is a payment aggregator and must be authorised by the Reserve Bank of India under the Payment Aggregator / Payment Gateway framework. A pure payment gateway that only provides technology and never touches funds is treated differently. The practical consequence for a merchant is simple and important: check that whoever holds your customers' money for a day or two is RBI-authorised, because that is the difference between a regulated escrow arrangement and an unsecured claim on a company.
Aggregator, gateway, PSP — the distinction that matters
| Term | What it does | Regulated as an aggregator? |
|---|---|---|
| Payment aggregator | Collects funds from customers into an escrow and settles to the merchant | Yes — requires RBI authorisation |
| Payment gateway (technology only) | Routes transactions, never holds funds | Not as an aggregator |
| Payment service provider | Loose commercial term covering either | Depends on whether funds are handled |
| Payment orchestrator | Routes across multiple aggregators to optimise success | Depends on whether funds are handled |
Most of the names merchants use day to day — Razorpay, Cashfree Payments, PayU, BillDesk, Easebuzz, Instamojo, Paytm Payment Gateway, PhonePe, Airpay — operate in the aggregator space in India.
What the RBI framework requires, and why you should care
The framework sets conditions that exist specifically to protect merchants and customers:
- Authorisation from the RBI to operate as a payment aggregator.
- Net worth requirements, so the entity holding your settlement funds is substantial.
- Escrow arrangement with a scheduled commercial bank: customer money sits in escrow, not in the aggregator's operating account, and permitted debits are specified.
- Settlement timelines for crediting merchants.
- KYC of merchants, which is why onboarding asks for real documentation.
- Security standards, including restrictions on storing card data — tokenisation replaced card storage for most use cases.
- Grievance redressal with a published escalation path.
RBI publishes the list of authorised payment aggregators on its website, and it is updated as authorisations are granted or lapse. Before signing with a provider — particularly a smaller or newer one — check the current list on rbi.org.in rather than relying on the provider's own claim. This takes two minutes and is the single most useful due-diligence step a merchant can take.
What onboarding will ask for
Because the framework requires merchant KYC, expect to provide:
- Certificate of incorporation, partnership deed or proprietorship proof
- PAN and GSTIN
- Bank account in the business name, with a cancelled cheque
- Director or proprietor KYC
- Website or app URL meeting compliance requirements
That last one causes more delays than the documents. Your site needs visible pricing, refund and cancellation policy, terms and conditions, privacy policy, contact details and a clear description of what you sell. Get those pages live before you apply.
Certain categories face enhanced scrutiny or are declined — gambling, unregulated financial services, certain health claims, adult content and others. If you are in a borderline category, raise it at the start rather than after a month of onboarding.
How to shortlist safely
- Confirm RBI authorisation on the current published list.
- Get the method-wise rate card and model it on your own payment mix — see our free payment gateway guide.
- Confirm the settlement cycle and whether a rolling reserve applies to your category.
- Ask about payment success rate for your customer profile; this matters more than MDR.
- Check the products you need — payouts, subscriptions with e-mandate, split payments, international acceptance.
- Read the refund, chargeback and dispute process, including fees.
- Check integration fit with your platform: Shopify, WooCommerce, your app, or your billing software.
FAQs
What is a payment aggregator?
A payment aggregator collects payments from customers on behalf of merchants into an escrow account and settles the money to the merchant. In India, any entity handling funds in this way must be authorised by the Reserve Bank of India under the Payment Aggregator / Payment Gateway framework. A pure payment gateway that only provides routing technology and never touches funds is treated differently.
Where can I find the list of payment aggregators in India?
The Reserve Bank of India publishes the current list of authorised payment aggregators on its website, rbi.org.in, updated as authorisations are granted, refused or lapse. Check that list directly before signing with a provider rather than relying on the provider's own claim — it is the most valuable two minutes of due diligence a merchant can spend.
What is the difference between a payment gateway and a payment aggregator?
A payment aggregator collects and holds customer funds in escrow before settling to the merchant, and requires RBI authorisation. A pure payment gateway provides only the technology to route a transaction and never handles the money. In everyday Indian usage the terms are used interchangeably, but the regulatory and risk difference is real.
What documents are needed to onboard with a payment aggregator?
Certificate of incorporation or equivalent business proof, PAN, GSTIN, a bank account in the business name with a cancelled cheque, director or proprietor KYC, and a website or app that meets compliance requirements — visible pricing, refund and cancellation policy, terms, privacy policy and contact details. Website compliance delays onboarding more often than missing documents.
Is it safe to use a smaller payment aggregator?
It can be, provided the entity appears on the RBI's current authorised list, operates a bank escrow for customer funds, and publishes a grievance-redressal path. The authorisation check is not a formality — it determines whether your in-transit money sits in a regulated escrow or is an unsecured claim on a company.
Next step: get a free matched payment gateway shortlist based on your category, payment mix and volume.
