Tata Pay, the Tata Group’s payment application, secured a payment aggregator licence from the Reserve Bank of India (RBI) on January 1. It can now facilitate ecommerce transactions.
Tata Pay is held through Tata Digital, the group’s subsidiary entity which houses all its digital businesses.
Back in 2022, Tata Group launched its digital payments application on Unified Payments Interface in partnership with ICICI Bank. While the salt-to-technology conglomerate has been planning a detailed financial services strategy, consumer traction is limited as of now.
This is the second payment business that will be housed within the Tata Group. It also has the licence to run ‘white label ATMs’ in rural India under the subsidiary Tata Communications via the brand name Indicash.
RBI data shows that Tata had also tried its hand at setting up a prepaid payments business (mobile wallets) in the past, but surrendered the licence in 2018.
“With the payment aggregator licence, Tata can power all ecommerce transactions within its subsidiary entities and this will help it manage funds better,” said a founder of a digital payment startup on the condition of anonymity.
Tata Pay joins the likes of Razorpay, Cashfree, Google Pay and others to get the much-awaited payment licence. The PA licence will enable it to process online transactions at ecommerce checkouts and handle funds itself.
Along with Tata Pay, a Bengaluru-based identity verification startup DigiO also got the licence on January 1. DigiO powers digital identification for multiple fintech startups, and now with the PA licence, it can bundle in-payment services for these fintechs on top of identity verification.
ET wrote on December 20 that the RBI granted the first lot of PA licences and opened up new merchant onboarding for Razorpay and Cashfree after almost a year.
