By Naraway
In this article
By late 2025, Razorpay had completed a set: RBI authorisation as an online payment aggregator, a cross-border aggregator in December 2025, and then an offline aggregator for its point-of-sale business. Three activities, three separate approvals. That is how fintech licensing works in India.
The same companies have found some doors harder. Inc42 reported that RBI rejected NBFC licence applications from PhonePe and Razorpay, a sign of how differently RBI treats payments and lending.
The Licence Map
| Activity | RBI authorisation |
|---|---|
| Collecting payments for merchants online | Payment aggregator, online (PA-O) |
| Card machines and in-store payments | Payment aggregator, physical (PA-P) |
| Payments for imports and exports | Payment aggregator, cross-border (PA-CB) |
| Wallets and prepaid cards | Prepaid payment instrument (PPI) issuer |
| Lending | NBFC (for example, NBFC-ICC) |
| Peer-to-peer lending platform | NBFC-P2P |
| Consent-based financial data sharing | NBFC-AA (account aggregator) |
| Digital-only bank | No licence category; partner with a licensed bank |
Sources: Digital Policy Alert; Taxmann; industry summaries. Only companies incorporated in India can hold these authorisations.
What Changed in 2025 and 2026
Sources: Digital Policy Alert; Taxmann; JSA.
RBI consolidated payment aggregator rules into a single Master Direction effective 31 December 2025, covering authorisation, escrow accounts and merchant due diligence. Entrackr's review of 2025 found RBI more flexible on payment licence clearances than in previous years; CRED received payment aggregator approval in March 2026.
Capital Before Customers
Lending licences carry the steepest entry ticket. Under RBI's scale-based framework, NBFC-ICCs need net owned funds of Rs 10 crore by 31 March 2027, up from Rs 5 crore in March 2025, and new lenders need it from the start. For a foreign-backed fintech, that capital arrives as foreign investment and brings its own reporting to RBI.
The Market the Licences Unlock
UPI alone carried 24.07 billion transactions worth Rs 29.37 lakh crore in September 2026. Licences decide which part of that flow a fintech can touch: routing payments, holding money, or lending against it.
Part of Naraway's research series India Market Entry in 2026.
In short
India has no single fintech licence. The Reserve Bank of India licenses each activity separately: payment aggregators (online, offline and cross-border), prepaid payment instruments, and NBFCs for lending, including peer-to-peer and account aggregator categories. Only a company incorporated in India can hold these licences. RBI's Master Direction on payment aggregators took effect on 31 December 2025; NBFC-ICCs need net owned funds of Rs 10 crore by 31 March 2027. Razorpay holds online, offline and cross-border aggregator authorisations, while Inc42 reported that RBI rejected NBFC applications from PhonePe and Razorpay.
- No umbrella fintech licence: RBI licenses each activity.
- Payment aggregator authorisation in three segments: online, offline, cross-border.
- RBI's payment aggregator Master Direction applies from 31 December 2025.
- NBFC-ICC net owned funds: Rs 10 crore by 31 March 2027.
- There is no neo-bank licence; neo-banks work through licensed banks.
Sources
- Razorpay POS secures RBI licence as offline payment aggregator, Free Press Journal
- RBI reluctant to grant NBFC licences to fintechs; applications of PhonePe, Razorpay rejected, Inc42
- RBI shows flexibility on fintech payment licence clearances in 2025, Entrackr
- CRED gets RBI approval to operate as payment aggregator, Business Standard
- RBI revises net owned fund requirements for specified NBFCs, Taxmann
- Regulation of Payment Aggregators Directions, 2025, Digital Policy Alert
Frequently Asked Questions
Is there a single fintech licence in India?
No. RBI authorises each regulated activity separately: payment aggregation, prepaid payment instruments, lending through NBFCs, peer-to-peer lending and account aggregation.
Can a foreign company get an RBI fintech licence?
The applicant must be a company incorporated in India. Foreign ownership is possible within FDI rules, but the licence is held by the Indian entity.
What are the payment aggregator categories?
Online (PA-O), offline or physical (PA-P) and cross-border (PA-CB), under RBI's Regulation of Payment Aggregators Directions, 2025.
What capital does an NBFC need?
NBFC-ICCs must have net owned funds of Rs 5 crore by 31 March 2025 and Rs 10 crore by 31 March 2027 under RBI's scale-based regulation.
Does India issue neo-bank licences?
No. Neo-banks operate by partnering with licensed banks.
