PhonePe: RBI gives PhonePe a big gift, increasing its dominance in the digital payments sector..

The Reserve Bank of India has given PhonePe, a fintech company that provides online payment services, a significant gift ahead of Diwali. The RBI has approved PhonePe as an online aggregator. This will enable shopkeepers and businesses to easily collect and settle payments. Previously, it was only authorized for online payments.

Last Friday, PhonePe received permission to operate as an online payment aggregator. This will allow the company to expand its merchant network, focusing on small and medium businesses (SMEs). Yuvraj Singh Shekhawat, Chief Executive Officer (CBO) of PhonePe's Merchant Business, said that with this aggregator, PhonePe will be in a position to provide better services to businesses, especially those in the SME segment, which previously lacked access to quality services.

This decision will help PhonePe further expand its payment gateway. This gateway provides quick onboarding for merchants, easy integration for developers, and a smooth checkout experience to increase payment success rates. Launched in 2016, PhonePe is one of India's largest fintech companies. It has over 650 million registered users, a network of 45 million merchants, and over 360 million daily transactions. Its portfolio spans payments, lending, insurance distribution, wealth products, hyperlocal e-commerce (pincode), and the Indus Appstore.

Online Payment Aggregator
An online payment aggregator is a service that helps businesses (merchants) easily accept online payments from their customers.

Merchant onboarding - A business (such as an online store) signs up with a payment aggregator. The aggregator onboards the merchant to its platform, which includes KYC and business details verification.

Payment Gateway Integration - The aggregator integrates its payment gateway into the merchant's website or app. This acts as a digital "cash counter."

Multiple Payment Options - The aggregator supports multiple payment methods, such as credit/debit cards, UPI, net banking, and wallets like PhonePe, Google Pay, etc. The customer chooses the payment option of their choice.

Payment Processing - When a customer makes a payment, the aggregator processes the funds. It coordinates with banks, card networks like Visa and Mastercard, and other financial companies. When a payment is successful, the user receives a confirmation, and if a payment is rejected, the reason for the same is also provided.

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