CRED Granted License to Expand Fintech Services

CRED, the Indian fintech firm, has been granted in-principle approval for a payment aggregator license by the Reserve Bank of India.

The Indian fintech firm CRED has gained in-principle approval for a payment aggregator license, which could let it expand its product line, experiment more quickly, and provide better customer service.

According to two people familiar with the case, the Reserve Bank of India granted in-principle clearance for the payment aggregator license to the $6.4 billion Bengaluru-based startup this week.

When contacted for comment, CRED did not immediately provide an answer.

Over the past year, the RBI has given numerous businesses, including Pine Labs and Reliance Payment. After giving its in-principle approval, the central bank usually takes nine months to a year to grant final approval.

Payment aggregators play a crucial role in streamlining online transactions by serving as middlemen between consumers and retailers. With the RBI’s permission, fintech companies can increase the scope of their products and improve their ability to compete.

Without a license, fintech businesses must rely on outside payment processors to handle transactions, and these players cannot prioritize such requirements. With a license, fintech businesses can process payments directly, cut expenses, take more control over the payment flow, and onboard merchants directly. Furthermore, licensed payment aggregators have the ability to settle payments directly with retailers.

According to an industry expert, CRED may “generally be everywhere their customers shop” and become available to more businesses with the help of a license.

In recent quarters, the Indian central bank has cracked down on several fintech company practices and has generally become more cautious when awarding licenses of any kind to enterprises. This has resulted in CRED receiving an in-principle license. Earlier this year, the Reserve Bank of India made the startling decision to force Paytm Payments Bank to stop operating most of its businesses.

Tiger Global, Coatue, Peak XV, Sofina, Ribbit Capital, and Dragoneer are just a few of the wealthy clients that CRED caters to in India. Its main purpose when it debuted six years ago was to assist members in making on-time credit card payments. Since then, it has added loans and a number of other items to its lineup. It declared in February that it had secured a deal to acquire Kuvera, an online stock and mutual fund investing platform.