RBI has asked the firms to conduct an audit in the next six months to secure a final nod. Credit: PhotoMIX-Company from Pixabay.

The Reserve Bank of India (RBI) has asked fintech firms Razorpay, Cashfree Payments and Stripe to stop their merchant onboarding activities until they obtain their final payment aggregator (PA) licence.

Razorpay was ordered to halt the onboarding of new online merchants starting 15 December, Moneycontrol reported citing a source privy to the development.

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All the three companies have already received in-principle approval from the RBI for their PA licence.

The central bank has asked these companies to conduct an audit in the next six months to secure a final nod.

Confirming the news to the media, a Razorpay spokesperson said: “As part of the process for the final authorisation of our PA/PG licence for which we received the in-principle approval from RBI in July, we are now required to share additional details with RBI to aid in the final licence process.

“As part of this process, RBI has suggested us to temporarily withhold onboarding new online merchants till such details are submitted.

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“As a responsible corporate that operates under the ambit of RBI, Razorpay has abided by the regulatory requirement.”

The latest development comes shortly after Razorpay revealed that it would allow merchants to carry out transactions with credit card through Unified Payments Interface (UPI).

Meanwhile, Stripe denied receiving any direction from RBI to pause its merchant onboarding service.

In a statement, Stripe said: “We haven’t received any communications from the RBI asking us to pause onboarding.

“We look forward to continuing to operate in India and help Indian businesses process their payments, support their subscription business models, and combat fraud.”

Representatives for Cashfree Payments were not available to provide updates on the matter.