(#17) The more the merrier? Not for payment aggregators

With the RBI opening the taps for aggregator licences, the business has once again been upended. The only stakeholder thrilled is the merchant.

The payment aggregator space in India has seen a lot of regulatory flux in the last few years. New licensing frameworks have been created. Large operational aggregators were first barred from acquiring new merchants and then, after more than a year-long wait, allowed again. Most importantly, the regulator, the Reserve Bank of India, known to be very prudent in giving out new licences, has opened the tap; in the last five months, lots of new licences have been given out. So much so that today there are as many as 61 payment aggregators operating in India.

While regulatory flux would continue, the influx of new players in the market will see payment aggregators face a new kind of flux—one brought on by competition. I believe this will not just change the core offering of payment aggregators, but also drive down margins for the entire industry.  

In the process, there will be multiple losers and just one winner.

More details published in The Morning Context.