Payment gateways and the RBI’s balancing act

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Editor's note: Welcome to the first edition of the Fintech Weekly from The Morning Context. My name is Advait, and I’ll be writing this newsletter with my colleague Ashwin.  I fundamentally believe that regulators are not just rule makers, but watchdogs and enforcers of those rules. They have biases, are often conflicted and have the power to pick winners and losers among businesses. In many cases, they can be more disruptive than the private sector firms they watch over.  But one inherent aspect of regulators, which is largely not understood, is their power to create markets. Towards that end, the Reserve Bank of India is on a warpath to clean up India’s fintech industry after years of being allowed to operate without direct regulatory oversight. Legacy and shoddy companies will be killed, while only serious players with strong teams and a good track record on risk and security will be allowed to operate.  One segment in the spotlight these past couple of weeks has been payment aggregators and payment gateways, or PA/PG in industry speak. We’ve all interacted with these companies every …