Payment aggregators seek more time from RBI for merchant Re-KYC

Payment aggregators are requesting additional time from the Reserve Bank of India (RBI) to complete mandatory Re-KYC (Know Your Customer) processes for merchants. The companies are working to address a verification backlog following updated regulatory directions that classify payment aggregators into online, physical, and cross-border segments.

Many of the affected merchants are small, informal businesses located in smaller towns and villages. These traders often face challenges providing the necessary documentation required for compliance. While these small-scale merchants represent a limited share of total transaction value, they are vital for digital payment expansion and financial inclusion.

A significant operational hurdle is the RBI requirement that in-person verification must be conducted by the payment companies' own employees rather than third-party agencies. This mandate has forced firms like Paytm, PhonePe, and Google Pay to increase their internal staffing to manage the workload. Payment firms expect to complete approximately 80% of the Re-KYC exercise by the September 15 deadline.