Fintech firm Cred has received in-principle approval from the Reserve Bank of India for the payment aggregation (PA) business, said people familiar with the development.

The Bengaluru-based start-up can double down on the merchant payments business, in which it will be joining the ranks of Razorpay and Cashfree.

Generally, it takes about six months after the in-principle nod for a company to get the final approval from the RBI. Recently, CCAvenue, Innoviti Payments and MSwipe have also received their final PA licence recently.

Cred did not comment on the development.

Cred can offer merchant payments to any online seller. The RBI allows PAs to manage funds through an escrow account and offer value-added services on top of payments.

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The regulator issued draft guidelines for payment aggregators suggesting strict know-your-customer requirements on the part of merchants.

Cred is also developing an offline payments business and will start deploying QR code-based ‘scan and pay’ payments at retail outlets. It will build on the UPI payments facility that Cred is pushing.

PA-P licence

It might need to apply separately for the payment aggregator-point of sale (PA-P) licence. Once the final guidelines on PA-P are released, there will be more clarity on the application process.

Cred had also acquired Kuvera, to enter the wealth management space. Kuvera had around three lakh affluent customers using its wealth products.

Cred has reported ₹1,400 crore in revenue from operations in FY23 against ₹393 crore in FY22. Its losses grew marginally to ₹1,347 crore in FY23 from ₹1,280 crore in FY22.

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