The Reserve Bank of India’s payment aggregator stamp has quietly become the most coveted badge in Indian fintech. Since January 2025, the central bank has issued just nine final approvals—PayU, BillDesk, Adyen and, in the past week alone, Quicktouch and Getepay—while hundreds of hopefuls remain in limbo. The figure is striking, given that over 185 companies applied for authorisation more than two years ago. A payment aggregator licence is beginning to look like a scarce operating permit—one that could decide who gets to dictate price, data access and bargaining power in India’s booming merchant-acquiring market.
Licence scarcity and the coming knife-fight over merchants
Every entity that touches customer funds on behalf of an online merchant must now hold a payment aggregator licence or risk being switched off. That alone invites turf wars, but scarcity supercharges them: with each new approval the remaining unlicensed rivals watch their addressable market shrink. Several fintechs have already whispered that licensed incumbents are nudging merchants to sign exclusivity clauses, arguing that “RBI-authorised” status shields them from regulatory surprises. Once the payment aggregator cohort settles around perhaps 60–70 entities, a plausible end-state given current approval rates, competition among the survivors could get messy.
Pricing caps: the next round starts at 0.3%
Into this mix walks a debate over merchant discount rates. A lobbying letter from the Payments Council of India, leaked late April, urges the Prime Minister’s Office to back a 0.3% MDR on large-ticket UPI transactions. Aggregators argue they need the fee to subsidise compliance overhead that now includes quarterly system audits, escrow maintenance and real-time fraud reporting. Consumer groups counter that any MDR will be passed straight to shoppers. RBI has not endorsed the PCI number, but officials tell journalists the Bank is “open-minded about sustainable economics” so long as small merchants stay shielded.
The outcome matters because payment aggregator licences re-bundle costs that used to sit with disparate gateways and processors: escrow interest lost, collateral for settlement guarantees, periodic CERT-In audits, tokenisation infrastructure. Licensees need a revenue line to pay for those. If the MDR debate lands above zero but below 0.5%, the fight will turn on who can squeeze the most operating leverage from scale, data science and interchange rebates. Cut the cap any lower and only the best-funded aggregators will survive, cementing early movers’ dominance.
Enter the Digital Competition Bill
Scarcity and pricing power would normally bring the Competition Commission into the ring after the fact. This time the referee may arrive early. The Draft Digital Competition Bill (DCB), based on recommendations of the Committee on Digital Competition Law, is being polished for Parliament’s monsoon session and will give regulators ex-ante powers to label “systemically significant digital enterprises” (SSDEs) across nine “core digital services”, including payments. If passed in its current form, the bill could force the largest payment aggregators—think aggregators processing ₹1 trillion-plus a year—to pre-clear any preferential pricing, self-preferencing or exclusivity clauses and to open key APIs on fair, reasonable and non-discriminatory (FRAND) terms.
Combine that with the RBI’s licensing scarcity and you get an intriguing tension: the central bank is narrowing the field to enforce safety and soundness, while the competition authority is preparing to police the victors for gate-keeping. Lawyers call it regulatory twin peaks; founders are already calling it a compliance minefield.
A preview of the first skirmishes
- Data access. Under RBI rules, aggregators must store customer card data only in tokenised form after August 2025, but they still retain rich behavioural metadata. Smaller payment processors fear licensed payment aggregators will amass an information advantage that can be parlayed into credit-scoring or loyalty-adtech businesses, precisely the kind of cross-market leverage the DCB wants to nip.
- Bundled services. Several newly licensed aggregators are also offering point-of-sale hardware and SME loans. Competitors argue that tying escrow settlement to working-capital pricing could become anti-competitive if merchant lock-in raises switching costs. The DCB’s clause against “bundling that forecloses the market” would make such packages contestable.
- On-soak and off-soak routing. Foreign card networks hope licensed payment aggregators will still let merchants route high-value payments over cards instead of UPI. If a handful of SSDE payment aggregators were to steer that volume preferentially to their own UPI-first pipes, the Competition Commission could intervene on grounds of discriminatory access.
What’s next for payment aggregators
Within the next month RBI is expected to publish an updated list of in-principle approvals and returns. Observers will parse whether household names like PhonePe or Google Pay finally move from the “pending” column to “authorised”, reshaping competitive dynamics overnight. Parliament’s monsoon calendar will signal whether the Digital Competition Bill is tabled in July or pushed to the winter. If both timelines hold, India’s biggest payment aggregators could find themselves juggling RBI compliance audits and ex-ante competition filings in the same quarter.
For merchants and developers the message is: today’s supplier choice will decide tomorrow’s bargaining leverage. For investors, a payment aggregator licence is clearly gold—but fight club rules apply. In the coming mêlée over MDR caps, API access, and SSDE thresholds, everyone may trade blows. And the first rule of India’s next fintech fight club? You talk about fees, data, and power—because the regulators certainly will.