RBI Makes CKYCR Mandatory for Merchant Onboarding, Tightens Rules for Payment Aggregators

The Reserve Bank of India has introduced changes to the payment ecosystem by mandating a centralised KYC framework for merchant onboarding, as per The Moneycontrol report.  

The move is part of a broader effort to strengthen transaction monitoring and improve regulatory oversight in the payments space. 

CKYCR Becomes Primary KYC Mechanism 

The RBI has designated the Central Know Your Customer Records Registry as the primary mode for onboarding merchants by payment aggregators.  

Physical KYC documents will now be used only in cases where CKYCR is not available or cannot be implemented. 

This shift is aimed at improving consistency and efficiency in merchant verification while reducing reliance on manual documentation. 

Stricter Monitoring and Merchant Verification 

The updated framework places greater responsibility on payment aggregators to ensure accurate classification and verification of merchants. 

The move is intended to curb misuse of payment systems for activities such as illegal betting, real-money gaming and money laundering. 

Earlier, banks were responsible for merchant verification, but this responsibility has now shifted to payment aggregators due to the scale and complexity of onboarding. 

Regulatory Framework and Definition of PAs 

The central bank has also provided a formal definition of payment aggregators, limiting their role to facilitating transactions for the purchase of goods, services or investment products through merchant platforms. 

Additionally, escrow accounts have been clearly defined as being restricted to settlement-related activities and cannot be used for broader purposes.  

Payment aggregators are also restricted from facilitating person-to-person money transfers under the revised framework. 

Capital Requirements and Licensing Changes 

The RBI has revised the financial requirements for payment aggregators. Entities must have a minimum net worth of ₹15 crore at the time of application, which must be increased to ₹25 crore within three years of authorisation. This net worth must be maintained on an ongoing basis.

The regulator has also brought physical, online and cross-border payment services under a unified licensing regime, expanding oversight across the ecosystem. Over the past 18 months, several payment firms have been approved and brought under the regulated entity framework. 

Technology Upgrade and Cross-Border Expansion 

The Central Registry of Securitisation Asset Reconstruction and Security Interest of India has been tasked with upgrading the KYC database through CKYCRR 2.0, aimed at improving processes for reporting entities.

In addition, the RBI has expanded the definition of cross-border payment aggregators to include Liberalised Remittance Scheme transactions covering education, travel and medical expenses, along with e-commerce transactions under FEMA. 

While this broadens business opportunities for payment firms, aggregators will not be able to directly access the central bank’s database to verify LRS usage. Instead, they will rely on banks to confirm whether a customer has reached the annual remittance limit of $250,000. 

Read More: RBI MPC Meeting Convenes Today; Policy Outcome Scheduled for 8 April, 2026! 

Conclusion 

The RBI’s latest measures reflect a dual approach of tightening compliance and expanding operational scope for payment aggregators, aiming to create a more secure and efficient payments ecosystem. 

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