News Brief
Amid Paytm Troubles, Jio Payment Set To Operate As Online Aggregator Following RBI Approval
JPSL receives RBI's approval to function as an Online Payment Aggregator
Jio Payment Solutions Limited (JPSL), a branch of Jio Financial Services (JFS), announced on Tuesday (29 October) that it has received authorisation from the Reserve Bank of India (RBI) to function as an online payment aggregator.
Effective from 28 October, the authorisation certificate empowers JPSL to facilitate digital transactions under Section 7 of the Payment and Settlement Systems Act 2007.
Jio Payments Bank, another division within JFS, currently provides digital savings accounts with biometric authentication and physical debit cards, catering to over 1.5 million active users for daily transactions.
JFS aims to expand its banking services further, building on the foundation of Jio Payments Bank’s offerings in digital savings.
With Paytm facing regulatory restrictions on onboarding new customers through its financial services division (Paytm Payments Bank Limited), Jio has an advantageous position to capture a greater share in India’s burgeoning digital financial services sector.
The total digital payment transactions volume increased from Rs 2,071 crore in the Financial Year (FY) 2017-18 to Rs 18,737 crore in FY 2023-24 at a compound annual Growth Rate (CAGR) of 44 per cent.
As far as UPI is concerned, its transactions have grown from Rs 92 crore in FY 2017-18 to Rs 13,116 crore in FY 2023-24 at CAGR of 129 per cent, accounting for over 75 per cent of the transactions in 2023
Despite this growth, cash remained the preferred method for about 60 per cent of consumer spending as of March 2024, though this has been gradually declining since the COVID-19 pandemic, according to an RBI study.
A payment aggregator is a third-party service provider enabling businesses to accept payments online. Aggregators allow their clients to offer diverse payment methods, including debit and credit cards, cardless EMIs, UPI transfers, bank transfers, e-wallets, and e-mandates.
