1 day ago
Payment Aggregators Seek RBI Extension for Merchant Re-KYC Deadline
Payment aggregators help shops and other businesses accept digital payments.
The Reserve Bank of India requires them to check their merchants’ identities and documents again.
This process is called re-KYC.
Many of the affected businesses are small shops or informal businesses in smaller towns and rural areas.
Some do not have all the documents needed for verification.
Companies say checking millions of merchants is taking longer than expected.
They expect to finish about 80% of the checks by September 15.
Industry estimates say 30-35% of small informal offline merchants may miss the deadline.
The companies want the RBI to give them more time so merchants do not lose access to digital payments.
Payment aggregators have asked the Reserve Bank of India for more time to complete merchant re-KYC by the September 15 deadline.
Small and informal merchants, especially QR-code and soundbox users, face the greatest verification challenges.
Industry sources estimate that 30-35% of small informal offline merchants may miss the deadline.
RBI rules require aggregator employees to conduct in-person verification instead of third-party agencies.
Aggregators expect to complete about 80% of re-KYC, but delays could affect digital payment acceptance.
- Who
- Payment aggregators, their merchant customers and the Reserve Bank of India.
- What
- Payment aggregators are seeking an extension to complete required merchant re-KYC and verification.
- Where
- The issue affects online and offline merchants, particularly in smaller towns and rural areas.
- When
- The reported deadline is September 15; the RBI’s updated Master Directions were issued in September 2025.
- Why
- Aggregators face verification backlogs, documentation problems and staffing constraints while complying with RBI KYC requirements.
Payment Industry Concerns
RBI Compliance Objectives
Request for more time
Payment Industry Concerns
Aggregators say the scale of the exercise, documentation hurdles and verification backlog make the September 15 deadline difficult to meet.
RBI Compliance Objectives
The RBI framework gives businesses a prescribed compliance window for completing merchant verification.
Small-merchant risk
Payment Industry Concerns
Industry participants say many small merchants account for a limited share of payment volumes and values and are unlikely to create significant ecosystem-level risks based on transaction value.
RBI Compliance Objectives
KYC requirements are intended to establish customer identities and addresses and help trace fraud, money laundering and other illegal activities.
Operational impact
Payment Industry Concerns
Aggregators say employee-only in-person verification has increased staffing and resource pressures and could disrupt digital payment acceptance if merchants remain unverified.
RBI Compliance Objectives
The employee-based verification requirement is part of the stated RBI rules and supports the regulator’s merchant due-diligence framework.
Key facts
- Extension request
- Payment aggregators have approached the RBI for more time to complete merchant re-KYC.
- Deadline
- The reported deadline for completing the exercise is September 15.
- Expected completion
- Most payment aggregators expect to complete around 80% of re-KYC by the deadline.
- Estimated shortfall
- Industry estimates suggest 30-35% of small informal offline merchants may not complete verification on time.
- Affected merchants
- Small QR-code and soundbox merchants, as well as some small online businesses, face significant verification challenges.
- RBI classifications
- The September 2025 Master Directions classify aggregators as PA-Online, PA-Physical and PA-Cross Border.
- Verification rule
- In-person KYC must be conducted by payment aggregator employees rather than third-party agencies.
Sources
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