Payment Gateway License: A brief look into it

Payment Gateway License

Imagine a few years ago you showing your debit card at a cloth’s store to buy cloths. You’d get all kinds of excuses that range from “We only deal with cash” to the infamous “Sorry Ji. The payment gateway is not working.”.  Now, even if you whip out your phone at a departmental store to buy a  pack of biscuits, you can do so. It has all become possible because of promotion of digitization.

Which in turn has been made possible because of the large number of active payment gateways in India. And the reason payment gateways have become so active is because of the guidelines RBI has published about payment gateway license.

What is payment gateway license? It’s the license to start a payment gateway under the oversight of Reserve bank of India. It’s the responsibility  you take to ensure that you can handle the complexity of this business and protect the confidential data of the end users. It’s the requirement that stands as a testimony to your technology.

Let’s now take a brief look into the payment gateway license.

What is a payment gateway license?

A payment gateway is a door that opens to the tunnel of electronic transactions. It’s the technology that allows those electronic transactions to be:

  1. Concurrent and
  2. Smooth, while
  3. Maintaining the confidential data of the payer and the payee

As per the documents of Payment gateway registration, it works in three stages – dubbed as EAF (ee-f).

  1. E for encryption: Just when the users enters the online payment credentials and presses enter, the data gets encrypted and sent to the bank for authorization.
  2. Authorization: The bank computer, after receiving the data, decrypts the information to validate the details.
  3. Finalization: One the details are validated, the transaction process starts – transferring the money from the payer’s bank account to the payee.

But one can only indulge in running the technology of payment gateway if they have filed the payment gateway application. And you should know, not everyone can file it.

Who has the right to application for Payment Gateway Certification?

As per its own rules to issue payment gateway license, RBI has a long list of eligibility criteria;

  1. No individual applicants: Only a private limited company or a public limited company is allowed to file the application for payment gateway certification.
  2. Approval from Credit Card authorities: The Payment Card Industry’s Data Security Standards (PCI DSS) are quite stringent. Your payment gateway technology should match up to their expectations, for that’s the only way to get their approval. It’s only after you get it, the PCI DSS certification that you’re allowed to apply for payment gateway license in India.
  3. Enough capital is required: Payment gateway is a cost heavy technology and you should have the net worth to prove that you can handle it. As per the standards, it’s INR 15 Crore.
  4. Business plan for guaranteed success: Your business plan should guarantee to increase the net worth of your payment gateway company to INR 25 Crore.
  5. Rules for foreign payment gateways: While the foreign payment gateways don’t need to follow the eligibility criteria in the above points, they can only provide online transactions services up-to the limit set by Reserve bank of India.

Only after you adhere to the above points, you can apply for payment gateway registration in India.

What is the payment gateway process in India?

Following is a small guide of the payment gateway process in India, enough to make you curious:

  1. Get the approval of payment card industry by getting PCI DSS Certification
  2. Download Form A from the portal of Reserve Bank of India
  3. Fill Form A And attach to it the following documents:
    • Copy of Certificate of incorporation of your company
    • Copy of Memorandum of Association
    • Copy of Articles of Association
    • Copy of PCI DSS certification
    • Audited Balance Sheet of the past 5 years.
    • PAN card of all the directors involves
    • DSC of the directors involved
    • Address proof of your office
    • Bank account details of the company
    • Business plan that can guarantee to enhance your net worth to INR 25 Crore.
    • Demand Draft of the Payment Gateway license Cost.
    • GST registration certificate
    • Software code of the payment gateway.
  4. As online payment gateway registration is out of the question, you have to take the copies of the above documents with the application and pay a visit to your RBI branch.

After you submit the application, it’s all about having patience and let the application processing run its course.


RBI payment gateway license is your gateway to get away from a mediocre enterprises and actually contribute to the digital growth of India. If the above steps weren’t enough for you to understand the comprehensive details of payment gateway, we are just one phone call away.


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