Indian payment aggregators request more time to complete mandatory re-KYC for merchants before the September 15 deadline, citing operational challenges and concerns over small, informal traders’ inclusion in the digital payment ecosystem.
Payment aggregators in India have asked the Reserve Bank of India for more time to complete re-KYC, or renewed know-your-customer checks, on merchants as they race to meet a September 15 deadline, according to Business Today. The request reflects a widening operational burden for firms that process digital payments for millions of small businesses, many of them informal traders with limited documentation.
A senior executive at one payment aggregator told the publication that most of the merchants affected are small and informal, but said their inclusion still matters to the regulator because they help widen financial access and bring digital payments into smaller markets. That tension lies at the heart of the compliance drive: the RBI wants stronger identity checks to curb fraud and money laundering, yet payment companies warn that strict verification rules are difficult to apply at scale.
The requirement stems from the RBI’s updated Master Directions issued in September 2025, which split payment aggregators into three categories: PA-Online, PA-Physical and PA-Cross Border. Under the rules, in-person KYC must be carried out by payment aggregator employees rather than third-party workers, adding cost and staffing pressure for firms that must verify merchants one by one. According to Moneycontrol, many aggregators have expanded internal teams over the past year, but still face a large backlog, particularly among smaller offline merchants and online sellers.
Most payment aggregators expect to finish about 80% of the re-KYC work by the deadline, Business Today reported. Even so, firms are worried that any shortfall could leave thousands of merchants unable to accept digital payments, hitting small businesses hardest. Some market reports have also suggested there is confusion over whether the September 15 date is backed by an official RBI circular, but the compliance push itself remains a live issue as companies press for more time.
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