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Jio Payments, a Part of Jio Financial Services Gains RBI Approval
With RBI's approval, Jio Payments steps into India's digital finance arena, ready to rival major players like Paytm with comprehensive services.
Jio Payment Solutions, a subsidiary of Jio Financial Services (JFS), has officially received authorization from the Reserve Bank of India (RBI) to operate as an online payment aggregator. Effective October 28, 2024, this approval enables Jio Payments to facilitate digital transactions between merchants and customers, putting it in direct competition with other payment service providers like Paytm in India's bustling financial services market.
This RBI approval positions Jio Payments among a select group of regulated online payment aggregators, signifying a milestone in the company’s journey within India's digital payment ecosystem. The timing is particularly advantageous, as Jio enters the market when Paytm, a key player in digital payments, is experiencing regulatory challenges that restrict it from onboarding new customers. With Paytm limited in its growth potential, Jio Payments has an opportunity to establish itself and gain a competitive edge by expanding its reach in the market.
As an online payment aggregator, Jio Payments will provide businesses and merchants with the means to accept a broad range of payment methods. These include debit and credit cards, UPI transactions, e-wallets, and more, giving merchants a flexible, streamlined payment solution. This move complements the services offered by Jio Payments Bank, which already provides digital savings accounts, biometric access, and physical debit cards, catering to over 1.5 million active users.
The RBI's endorsement not only reinforces Jio's regulatory compliance but also highlights the bank's trust in Jio's role within the fintech sector. Jio Financial Services has consistently emphasized its ambitions to expand its digital banking and payment capabilities, and this authorization is a significant step in that direction.
The timing also aligns with recent constraints faced by Paytm Payments Bank, which has faced restrictions from the RBI on acquiring new customers due to regulatory compliance concerns. With Paytm facing limitations, the market now presents a favourable environment for Jio Payments to attract new customers and meet the growing demand for digital payment solutions.
Since its establishment as a spinoff from Reliance Industries, Jio Financial Services has focused on providing a range of financial services, including investment, financing, insurance, and now payment aggregation. As reported by CNBC TV 18, JFS raised its stake in Jio Payments Bank to 82.17% as of August 2024, signalling its dedication to strengthening its presence in India’s competitive fintech landscape.
