PhonePe has received final authorization from the Reserve Bank of India (RBI) to operate as an online payment aggregator. This approval allows the fintech company to broaden its merchant services, particularly for small and medium businesses (SMEs). With this license, PhonePe can provide businesses with secure payment processing tools, faster onboarding, and developer-friendly plugins, all designed to improve payment success rates and help businesses expand their digital presence.

What is a Payment Aggregator?

A payment aggregator is a third-party service provider that enables businesses to accept online payments from their customers through various methods, including credit cards, debit cards, UPI, net banking, and digital wallets. Payment aggregators streamline the payment acceptance process, making it faster and easier for businesses. They eliminate the need for merchants to develop and maintain their own payment infrastructure, reducing capital investment.

Benefits for Merchants and Consumers

• Simplified Payment Acceptance: Payment aggregators allow merchants to accept a wide range of payment methods through a single platform.
• Reduced Infrastructure Costs: Merchants don't need to invest in developing their own payment gateways.
• Enhanced Security: Payment aggregators provide secure payment processing, protecting both merchants and customers from fraud.
• Faster Onboarding: Payment aggregators offer quick and easy onboarding processes for merchants.
• Improved Payment Success Rates: Features designed to optimize payment processing lead to higher success rates.
• Instant Settlements: Some payment aggregators offer instant settlements, even outside of banking hours.
• Financial Inclusion: By providing accessible payment solutions, payment aggregators promote financial inclusion, especially for underserved SMEs.

PhonePe's Position in the Digital Payments Ecosystem

PhonePe is a major player in India's digital payments landscape, boasting over 650 million registered users and a merchant network of 45 million. The platform processes over 360 million transactions daily, with an annualized total payment value exceeding Rs 150 lakh crore. PhonePe has maintained a leading position in India's UPI market for nearly five years. In August 2025, it processed 915 Crore UPI transactions worth nearly INR 12 Lakh Crore, commanding a 46.5% market share.

RBI's Role and New Guidelines

The RBI plays a crucial role in regulating payment aggregators to ensure financial stability, cybersecurity, and customer protection. The central bank has issued new guidelines that mandate licensing for payment aggregators and require them to adhere to strict standards. These guidelines aim to prevent online fraud, enhance transaction security, and promote transparency in the digital payments ecosystem. The new rules also include increased net worth requirements for payment aggregators and deadlines for license applications.

PhonePe's Expansion and Future Plans

Beyond payments, PhonePe has diversified its business portfolio to include insurance, lending, wealth management products, and the e-commerce app Pincode. The company is also gearing up for a public listing in early 2026, with plans to raise $1.2 Bn–$1.5 Bn at a valuation of $7 Bn–$8 Bn. The payment aggregator license is expected to further strengthen PhonePe's position in the digital payments market and support its growth ambitions.

With the payment aggregator license, PhonePe is well-positioned to further streamline online transactions, expand its reach to underserved businesses, and contribute to the growth of the digital payments ecosystem in India.