CRED has received general approval for a payments aggregator license, a boost that might help the Indian fintech startup higher serve customers and produce recent products and concepts to market faster.
The Bengaluru-based startup, valued at $6.4 billion, received approval in principle from the Reserve Bank of India for a payments aggregator license this week, according to two sources acquainted with the matter.
CRED didn’t immediately respond to a request for comment.
Last yr, the RBI gave in-principle approval for payment aggregator licenses to several firms, including Reliance Payment and Pine Labs. Typically, it takes the central bank nine months to a yr to give full approval after approval in principle.
Payment aggregators play a key role in facilitating online transactions by acting as intermediaries between merchants and customers. The RBI approval enables fintech firms to expand their offerings and compete more effectively available in the market.
Without a license, fintech startups must depend on third-party payment processors to process transactions, and these players may not prioritize such requests. Obtaining a license allows fintech firms to directly process payments, reduce costs, gain greater control over payment flow and directly onboard merchants. Additionally, licensed payment aggregators can settle funds directly with sellers.
The license could also allow CRED to make it available to more retailers and “be everywhere their customers shop,” an industry executive said.
In principle, the approval of the license for CRED comes as India’s central bank has been cracking down on many business practices within the fintech industry in recent quarters and generally increasing caution in granting any form of licenses to firms. In a stunning move, the Reserve Bank of India earlier this yr ordered Paytm Payments Bank to halt most of its operations.
CRED, which incorporates Tiger Global, Coatue, Peak XV, Sofina, Ribbit Capital and Dragoneer, serves a large section of high-net-worth clients in India. It originally launched six years ago with a feature to help members repay their bank card bills on time, but has since expanded to include loans and several other other products. In February, it announced it had reached an agreement to buy mutual fund and investment platform Kuvera.
The post Fintech CRED generally secures consent to a payment aggregator license first appeared on 360WISE MEDIA.
The post Fintech CRED generally secures consent to a payment aggregator license appeared first on 360WISE MEDIA.