India Payment Gateway Licence www.deekpay.com

Payment GatewayBy bringing flexibility to online shopping, bill payments, mobile or DTH recharges, etc., they can be said to bridge the gap between banks and websites. According to Section 4 of the Indian PASS Act, except forReserve Bank of IndiaAny entity other than the entity that receives RBI No payment system can be operated or activated until authorisation is granted. Authorisation must be sought from RBI under Section 5 of the PASS Act.

What is a payment gateway?

An online payment gateway acts as a tunnel that connects your bank account to the portal where you need to transfer money. It acts as software that allows individuals to make online transactions through different payment methods. Some of the payment methods include online banking, credit cards, and debit cards,UPI and other online wallets.

Read more:What is a payment gateway?

Market Size of Payment Gateways in India

India Payment GatewayThe market is projected to grow from USD 1.21 Billion in 2024 to USD 2.66 Billion by 2029, at a CAGR of 17.161 TP3T during the forecast period (2024-2029).

Indian Payment Gateway Licence Management Laws

The Reserve Bank of India has introduced the Payment and Settlement Systems Act (PASS Act) to regulate and supervise payment systems in India. The institution may refer to all matters falling under the purview of this Act.

The two regulations governing payment gateway licences in India are as follows:

Regulation of the Commission for the Regulation and Supervision of Payment and Settlement Systems, 2008. Payment and Settlement Regulations, 2008.

What are the benefits of obtaining a payment gateway licence?

Payment gateways can be used not only for money transfers but also for certain other benefits. Payment gateways allow merchants to provide a better experience to their users by offering some key benefits such as:

1. PCI-DSS wallet

PCI-DSS compliance provides security for users, enabling them to store their data in a portal or gateway for recurring payments.

For example, if you are a regular customer of Flipkart, you can save your bank account details or card details on their website or app and the gateway will prevent any cyber security threats.

2. White label wallets

Some payment gateways allow users to conduct digital transactions through mobile wallet applications. Users can transfer funds from an account to a mobile wallet application and then use it to make payments on other applications or websites.

3. Fraud screening tools

Some payment gateways offer fraud screening tools to reduce the risk of lost information. These tools include Card Code Value (CVV), Card Verification Value (CVV) or Address Verification Service (AVS).

The main purpose of these tools is to check for fraudulent transactions. This allows purchasers to buy or sell goods and services at any time.

How do payment gateways make money?

Payment gateways earn money mainly through transaction, subscription, setup and refund fees. Payment gateways also earn revenue from each transaction by charging a percentage or any fixed fee.

Eligibility Criteria for Payment Gateway Licence Application in India

Below are the eligibility criteria to apply for a Payment Gateway Licence in India:

An entity incorporated under the Companies Act, 2013 or the Companies Act, 1956. At least two partners or shareholders are required. At least two directors are required. Proof of business address. CompanyPANCard. The company's current bank account information. Service tax registration number. Payment Card Industry Data Security Standard Compliance.

Essential IT Prerequisites for Obtaining a Payment Gateway Licence in India

The following explains the requirements of organisations in terms of IT systems and security:

Information Security Governance: Organisations must conduct detailed security risk assessments of their customers to determine risk exposure, remediation and residual risk. Security Incident Reporting: Businesses should report any cardholder breaches or security incidents to the Reserve Bank of India within a specified time frame. Cyber Security Audit and Reporting: Entities are required to perform and submit quarterly internal and annual external audit reports; biennial vulnerability assessment or penetration test reports; compliance certificates and compliance reports to the IT committee with any observations including planned corrective or preventive measures and the end date of the action. Encryption Requirements: Enterprises must select an encryption algorithm as a well-established international standard. It has been rigorously scrutinised by the international community of cryptographers. Data sovereignty: Enterprises must take precautions to ensure that data is stored in infrastructures that do not fall under any external jurisdiction. Data security in outsourcing: There must be an agreement related to outsourcing that provides audit rights clauses authorising the entity, or its nominated body and regulator, to conduct security audits. Alternatively, the third party must submit an annual independent security audit report to the enterprise. Payment Application Security: Payment applications must be developed in accordance with and comply with PA-DSS guidelines. As part of the merchant onboarding process, the business will review PCI-DSS compliance status.

Documents required to apply for a payment gateway licence in India

Obtaining a Payment Gateway Licence in India usually requires meeting different legal and regulatory criteria that are specific to the jurisdiction in which the business is conducted. The necessary documents required to apply for a payment gateway licence are listed below:

Certificate of Incorporation Director's PAN card or proof of address. Director's DSC and DIN. Proof of address of place of business. Details of the company's bank account. The company's business plan is for five years. Code testing reports from software organisations.

Capital Requirements to Apply for a Payment Gateway Licence in India

The net worth of the company or enterprise must be at least Rs. 15 crores. Its net worth should also increase to Rs. 25 crore within three years of the operation of its business.

Process of applying for a payment gateway licence in India

Obtaining a Payment Gateway Licence in India requires careful preparation of documents and strict adherence to the Reserve Bank of India's regulations, from submission and approval to the granting of the Payment Gateway Licence.

Step 1: Application in Form A under Section 5(1) of the PSS Act This application must be made to the General Manager, Payment and Settlement Systems Department, at the Central Office of RBI at Mumbai or any other office designated by RBI from time to time.

Step 2: Under Section 6 of the Act, RBI has the discretion to authorise payment gateway licences. The enquiry will help in clarifying the authenticity of the details submitted by the applicant and checking the credentials of the concerned participants.

Step 3: RBI will check the following conditions before issuing the payment gateway authorisation:

Develop requirements for payment system proposals or services to be performed by them. Setting technical standards for the architecture of payment systems or proposed payment systems. Terms and conditions include any security procedures operated by the proposed payment system. The proposed manner in which transfers are to be made in a given payment system; The prescribed manner of obtaining instructions affecting payment obligations under a payment system. The financial standing and integrity of the applicant. Prescribed terms and conditions govern the client's relationship with the payment provider. Credit and monetary policy. Time frame for authorisation.

Step 4: If RBI is satisfied with all the requirements set out in Section 7(1), it may issue a certificate of authorisation in Form B to the applicant to start and operate the payment system.

Step 5: Under Section 4 of the PASS Act, RBI is required to process the application for authorisation as soon as possible and for a maximum period of six months from the date of filing of the application for authorisation.

Services provided by the payment gateway

The Payment Gateway provides the following services in addition to facilitating fast payments:

Delivery address verification. Advanced vision system check. Computerised fingerprinting techniques. Speed pattern analysis. Identity deformation detection. Calculation of taxes transmitted to the processor for requesting authorisation.

Type of payment gateway provider after licence acquisition

Two types of payment gateway providers allow businesses to receive payments in Indian rupees from domestic and international customers through credit or debit cards and online banking. The types of payment gateway providers include:

second party provider Third Party Providers

How do payment gateways keep information secure?

The payment gateway must ensure the security of the information. Here is what a payment gateway must do to keep user data secure:

First, the entire transaction is done over an HTTPS web site. HTTP is different from HTTPS because the S in HTTPS stands for secure. The sale is made through the same tunnel. The system uses a signature request generated by a hash function. The merchant's signature request verifies the transaction request. The signature request is usually private, known only to the merchant and the payment gateway. To secure the payment page, the IP of the requesting server must be verified to detect any malicious activity. Virtual Payer Authentication (VPA) can be described as a method supported by acquirers, issuers and payment gateways to secure the process. VPA, implemented under the 3-D Security Protocol, adds a layer of security and also helps in authenticating online buyers and sellers.

Payment of gateway licence fees in India

The cost of obtaining a payment gateway licence is between Rs 16,00,000 and Rs 25,00,000. Time frame for obtaining a Payment Gateway Licence. The maximum time required to obtain a payment gateway licence is six months from the date of submission of the application.

Atpay - we are a professional provider of payment solutions and have been deeply involved for many years inIndia PaymentsWe have successfully provided payment functions for countless customers at home and abroad. We are fully confident in payment integration and high-risk payment processing, and welcome inquiries and exchanges.