It’s great news for CRED, as they have received in principle approval for a payment aggregator licence. This will definitely give a boost to the Indian fintech startup, allowing them to better serve their customers and expedite the launch of new products and ideas.
The Reserve Bank of India (RBI) has given the $6.4 billion Bengaluru-based startup in principle approval for the payment aggregator licence this week, according to two sources familiar with the situation.
CRED did not respond to a request for comment in a timely manner.
Several companies, including Reliance Payment and Pine Labs, have received in principle approval for payment aggregator licences from the RBI in the past year. Usually, it takes the central bank around nine months to a year to grant full approval after giving in-principle authorisation. 
Payment aggregators play a crucial role in streamlining online transactions, serving as intermediaries between merchants and customers. With the RBI’s approval, fintech firms can now broaden their range of services and enhance their competitive edge in the market.
When fintech startups don’t have a licence, they have to depend on third-party payment processors to handle transactions. However, these players might not give much importance to such requirements. Obtaining a licence enables fintech companies to process payments directly, resulting in cost reduction, increased control over payment flow, and the ability to onboard merchants directly. In addition, payment aggregators that have licences have the ability to directly settle funds with merchants.
According to an industry executive, a licence would allow CRED to reach more merchants and be present wherever their customers shop.
Similar to an auditor, CRED has received in-principle licence approval. This comes after the Indian central bank has taken strict action against various fintech business practices in recent quarters and has become more cautious in granting licences to businesses. Earlier this year, the Reserve Bank of India made a surprising decision to instruct Paytm Payments Bank to suspend the majority of its operations.
CRED serves a significant portion of India’s affluent customers, with backing from notable investors such as Tiger Global, Coatue, Peak XV, Sofina, Ribbit Capital, and Dragoneer. Six years ago, it debuted with a feature that helped members promptly pay their credit card bills. However, it has since broadened its range of services to include loans and various other products. In February, it made an announcement about its agreement to acquire the mutual fund and stock investment platform Kuvera.
