Payment Aggregators

Context: The payments arm of big technology companies Amazon and Google have been given in-principle approval by the RBI to operate as online payment aggregators.

About Payment Aggregators:

• A payment aggregator or merchant aggregator is a third-party service provider that allows merchants to accept payment from customers by integrating it into their websites or apps.
• A payment aggregator bridges the gap between merchants and acquirers.
• A merchant need not have a merchant account directly with the bank.
• At its core, payment aggregators bear the heavy load of integration with various payment providers to provide an all-inclusive solution for payment acceptance.

Types of payment aggregators in India

• Third-party payment aggregators:
  • Third-party PAs offer innovative payment solutions to businesses.
  • Their user-friendly features include a comprehensive dashboard, easy merchant onboarding, and quick customer support.
• Bank payment aggregators:
  • They lack many of the popular payment options along with detailed reporting features.
  • Bank payment aggregators are not suitable for small businesses and startups because of the high cost and difficult to integrate.

Source: Indian Express

Previous Year Questions

Q.1) Which one of the following situations best reflects “Indirect Transfers” often talked about in media recently with reference to India? (2022)

1. An Indian company investing in a foreign enterprise and paying taxes to the foreign country on the profits arising out of its investment
2. A foreign company investing in India and paying taxes to the country of its base on the profits arising out of its investment
3. An Indian company purchases tangible assets in a foreign country and sells such assets after their value increases and transfers the proceeds to India
4. A foreign company transfers shares and such shares derive their substantial value from assets located in India

Q.2) Consider the following:

1. Foreign currency convertible bonds
2. Foreign institutional investment with certain conditions
3. Global depository receipts
4. Non-resident external deposits

Which of the above can be included in Foreign Direct Investments? (2021)

1. 1, 2 and 3
2. 3 only
3. 2 and 4
4. 1 and 4