Indian fintech powerhouse, CRED, recently received provisional approval from the Reserve Bank of India (RBI) for a payment aggregator license. This is set to significantly amp up CRED’s digital transaction capabilities.
Best known for rewarding positive financial behavior, CRED is now well-positioned to further streamline its payment process. This provisional nod of approval could spell a significant change in operations for the company, as they explore diversification of their offerings.
The RBI is taking necessary steps to confirm CRED’s compliance with established protocols, a move aimed at enhancing service reliability and security. This action is in sync with RBI’s previous similar gestures towards firms like Reliance Payment and Pine Labs, pointing to a consistent trajectory in RBI’s policy.
As intermediaries between merchants and customers, payment aggregators help fintech companies spread their wings. By grouping payments from several customers into a single account, transaction processes are simplified.
CRED’s enhanced digital transactions with RBI license
This eliminates the need for direct bank relationships, thus lowering potential market entry barriers.
Due to these advantages, we’re seeing an upsurge in the number of fintech companies leveraging payment aggregators. This is heating up market competition while also fueling innovative strides.
Securing this license allows fintech firms to deal directly with payments, reduce overhead costs, and gain more control over payment flows. It also opens direct channels to merchants. Such growth potential places CRED right in the sweet spot to substantially increase its commercial reach.
This approval comes just as RBI is ramping up scrutiny on operational practices within the fintech sector. The central bank’s vigilance is perhaps best demonstrated by its recent directive to Paytm Payments Bank to halt new customer acquisitions.
CRED, founded six years ago, primarily serves India’s high-end consumer market. Although originally focused on credit card payments, CRED has gradually expanded its service suite to include loans and various other products – consolidating its market stature.
