India: Master direction on regulation of payment aggregators, including due diligence requirements entered into force

On 1 January 2026, the Reserve Bank of India's Regulation of payment aggregators directions, 2025, including due diligence requirements, entered into force. From 1 January 2026, all merchants are required to be onboarded in accordance with the due diligence requirements prescribed in the directions. The direction provides that a payment aggregator must retrieve merchant Know Your Customer (KYC) records from the central KYC records registry (CKYCR) or conduct alternative due diligence, including permanent account number (PAN) verification, contact point verification (CPV), and obtaining officially valid documents (OVD). Payment aggregators (PAs) are required to perform background checks, allocate merchant category codes, validate fund settlements, monitor transactions for compliance, and ensure non-bank entities register with the Financial Intelligence Unit-India.