Prosus-backed PayU Payments has got the Reserve Bank of India's in-principle approval to operate as a payment aggregator (PA) and restart onboarding new merchants onto its platform. 

In January 2023, the RBI had returned the fintech firm's application to operate as a PA due to its complex corporate structure and directed it to reapply for the same.

For the last 15 months, PayU had to thus pause onboarding new merchants for its online payment aggregation business.

Tightening scrutiny of the payments sector, the RBI had imposed similar ban on Paytm, Razorpay and Cashfree. In December last year, the latter two received the RBI nod after ensuring that they met fresh guidelines.

The validation by RBI is “a testament to our relentless focus on compliance and corporate governance," said PayU CEO Anirban Mukherjee.

PayU is a payment gateway that also offers services including buy-now-pay-later. It competes with fintechs like Tiger Global-backed Razorpay and Walmart-owned PhonePe.

PayU merchant partners can offer their customers the flexibility to decide the downpayment amount with Credit Card EMI, and even combine UPI with Credit Card EMIs for greater affordability and convenience.