How RBI’s payment aggregator rules have hit the industry

Why read this story?

Editor's note: In a LinkedIn post a couple of weeks ago, Vijay Yadav put out what was half investment pitch and half desperate plea: “… I would like to put forward the request and proposal for the investment in it - to increase the net worth of the Company to Rs. 15,00,00,000/- (Fifteen Crore Rupees) in order to match the requirements of the Reserve Bank of India…” Yadav is the co-founder of PayKun, a minor payment gateway startup based in Ahmedabad. His post pretty much sums up the state of most smaller payment processing startups in India. Many niche players are in the process of finding an investor or a buyer, and if nothing materializes then even winding up. The shake-up is no surprise: The Reserve Bank of India kicked it off a year ago with a set of formal guidelines for payment gateway companies, which till then had not been directly regulated. RBI’s new rules were immediately expected to squeeze small players and reshape the costs and models of the big names once they came into effect—starting at the beginning of …