Fintech Powerhouse CRED Receives In-Principle Approval for Payment Aggregator License


CRED, the Indian fintech giant, has received provisional approval for a payment aggregator license, marking a significant milestone for the Bengaluru-based startup. This development, valued at $6.4 billion, is poised to enhance CRED’s ability to serve its customers, introduce innovative products, and expedite experimentation with new ideas.

According to sources familiar with the matter, the Reserve Bank of India (RBI) granted CRED provisional approval for the payment aggregator license earlier this week. Despite attempts to reach out, CRED has not yet responded to requests for comment.

Over the past year, the RBI has granted provisional approval for payment aggregator licenses to several companies, including Reliance Payment and Pine Labs. Typically, the central bank takes between nine months to a year to issue full approval following the provisional nod.

Payment aggregators play a crucial role in facilitating online transactions by bridging the gap between merchants and customers. The RBI’s approval empowers fintech firms like CRED to broaden their service offerings and enhance their competitiveness in the market.

Without a license, fintech startups often rely on third-party payment processors to handle transactions, which may not align with their priorities. Acquiring a license allows these companies to process payments directly, reducing costs, gaining more control over payment flow, and enabling direct onboarding of merchants. Moreover, licensed payment aggregators can settle funds directly with merchants.

This approval opens doors for CRED to expand its presence to more merchants and reach customers across various platforms, as noted by an industry executive.

This development comes amidst the RBI’s increased scrutiny of fintech practices and a cautious approach towards licensing. Notably, earlier this year, the RBI directed Paytm Payments Bank to suspend most of its operations.

Backed by prominent investors such as Tiger Global, Coatue, Peak XV, Sofina, Ribbit Capital, and Dragoneer, CRED serves a significant portion of India’s affluent clientele. Originally launched six years ago to assist members in timely credit card bill payments, CRED has since diversified its offerings to include loans and various other financial products. In February, it announced an agreement to acquire Kuvera, a mutual fund and stock investment platform, further expanding its portfolio.