How Can You Legally Establish a Payment Gateway in India?

  • April 07, 2022
  • Dushyant Sharma
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A payment gateway is what has made the dream of digital India possible. It has given both the government and the people something by replacing pesky and untraceable cash with convenient and traceable electronic transactions.

People don't need to carry cash everywhere all the time anymore. And the government can now see your spending habits with even more detail. This duality of payment gateway isn't extrapolated in the payment gateway license. It's the legal requirement to start a payment gateway in India.

Unlike the government gaining benefit from seeing every transaction detail, you have to ensure that customer details are hidden, even from you.

Unlike the customers who can now buy stuff using the cell phones already in their hands, you have to watch over the transaction process carefully.

So, starting a payment gateway involves a lot of physical strain. But as the gods say, there is to gain without pain, and you should know that your payment gateway efforts are never in vain. By starting a payment gateway:

1.  You can increase the speed at which India is being pushed towards digitization.

2.  You can count yourself among the payment gateway giants. The list includes payU, PayTm, and every custom-made payment gateway for banks.

3.  Through payment gateway registration, you'll understand the intensity of the requirements to run this business.

4.  Once you get the payment gateway certification, you can start your business immediately.

Payment gateway registration: The legal requirement to start a payment gateway in India

Like all niche businesses, creating and operating a platform that allows the users to enter their card details and pay online requires permission from the government. In this case, the license required is called payment gateway certification. And to obtain the payment gateway certificate, your electronic payment platform should perfectly perform the following three tasks:

1. Establishing a payment tunnel: Your platform should establish a clean payment tunnel that doesn't have cracks. The cracks are the issues that software generally causes. Your payment gateway should be sans software issues.

2. It should maintain a secure connection: The payment gateway should establish a secure connection between the payee and the seller's bank accounts. The developer has to make sure that there is no one listening to the conversation during the transaction.

3. Confidentiality: Throughout the transaction process, the payment gateway shouldn't know about the personal details of the payee or the payer. It should put measures forth to ensure that all the data flowing through the tunnel is secure.

The Reserve bank of India is the body that takes the payment gateway application and assesses it to grant the license. However, it does so only after completing one more task, other than the above three. It is called PCI DSS certification.

Also Read: Security Recommendations after you get Payment Gateway License

PCI DSS Certification: Requirement to make you eligible to apply for the license

PCI DSS, full form, Payment Card Industry Data Security Standard, is a list of attributes a payment gateway should possess before it's allowed to operate. Governed by a coalition of major payment card industries, a PCI DSS certificate is a mandatory requirement. So please take steps to get it right when starting a payment gateway hits your mind.

After getting the PCI DSS certificate, you become one step closer to getting the Payment gateway license RBI.

Steps involved with the Payment Gateway Registration Process

As you already have observed, payment gate registration in India is only a few decades old. Even so, the process is online. So, the process of online payment gateway registration is as follows:

  1. Develop your payment gateway: It takes months and years of hard work to bring together a payment gateway. However, if you have the money and are a newbie in this field, you can invest in pre-made modules. Bring them together in a unique fashion, and viola, your payment gateway is made. That doesn't mean the story has ended. You need an expert software analyst to check and recheck the application. After you're certain that your payment gateway can stand shoulder to shoulder with the existing players, only apply for a payment gateway license in India.
  2. Incorporate your company: A business as complex as running a payment gateway needs a structured organization to sustain itself in the long run. That's why to register your payment gateway company.
  3. Get PCI DSS certified: Contact the independent body of PCI DSS and send them the source code of your payment gateway. Once you get the certification, only then you're allowed to move forward.
  4. Come up with the initial capital and the business plan: To apply for the RBI payment gateway license, you should have a total net worth of INR 15 Crore. You should also have a business plan that guarantees to enhance your net worth to INR 25 Crore within 3 years of starting your business.
  5. Start the documentation process: Get a file put together the following documents:
    1. Certificate of incorporation

    2. PAN card of the company

    3. Memorandum of Association

    4. Articles of Association

    5. Net worth certificate

    6. Audited Balance sheet of the last three years, or the last year if you’re a new company. 

    7. Source code of the payment gateway

    8. Backend access of the payment gateway

    9. Business plan highlighting your way to grow in the next 5 years. 

    10. GST registration certificate.

  6. File the online application: Fill and finalize the submission by paying the payment gateway license cost. 

  7. Wait for the RBI assessment to be completed: Remember, for the RBI, payment gateway license application that you’ve submitted is one of many. So, be patient and let them pick up your application. Once that happens, the processing will begin
  8. Get the payment gateway license: If upon assessing your application, RBI doesn’t see any errors, you’ll receive a notification. In that notification, you’ll receive your payment gateway license


Running a payment gateway business is a painful business that also brings a lot of pleasure in the form of profits. Understand the requirements, fulfill them, and only then file the application. The initial investment is high, and so is the risk of application rejection. So, take each step carefully. And if you get tired of bearing all the headaches of the process, reach out to our consultants.

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Dushyant Sharma
Author: Dushyant Sharma

Hey there, I'm Dushyant Sharma. With the extensive knowledge I've gained in past 8 years, I have been creating content on various subjects such as banking, insurance, telecom, and all the important registration and licensing processes for various companies. I'm here to help everyone with my expertise in these areas through my articles.

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