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Synopsis : RBI to regulate offline payments with new licensing guidelines, affecting third-party operators like BharatPe and Paytm.
The Reserve Bank of India (RBI) is set to unveil guidelines for licensing in the point of sale (POS) sector, aiming to regulate offline payments and create equity among online and offline operators, sources told Hindu Businessline.
Existing entities like banks and NBFCs in the POS domain will remain unaffected. However, third-party operators such as BharatPe and Paytm may face implications and will need licensing to continue operations.
Driven by market dynamics, the surge in third-party operators in offline payments necessitates regulatory measures, the report highlighted. POS companies handle significant daily balances, prompting the need for regulations before the offline market expands further.
Similar to payment aggregator licenses, POS operators might need to meet specific criteria, including a minimum net worth of ?25 crore and adherence to RBI's directives. The RBI's response to queries remains pending.
However, challenges persist. Concerns include the rise of cash loans on credit cards, discrepancies in data storage practices, and fund management issues by third-party players, raising the necessity for regulatory intervention.
It remains uncertain if players awaiting RBI approval for payment aggregator services, like Paytm and BharatPe, will be allowed to operate in the offline POS segment if the proposed licenses are made mandatory.
