Walmart-backed digital payments firm PhonePe’s subsidiary, PhonePe Account Aggregator Pvt Ltd, has got an in-principle approval from the Reserve Bank of India (RBI) to operate as an account aggregator.
With the license, PhonePe can now launch its account aggregator platform that will enable the free and instant exchange of financial data between financial information users (FIUs) and financial information providers (FIPs) with due consent from customers, thus helping Indian consumers avail financial services in a faster, cheaper and more convenient manner.
Account aggregators are responsible for providing services based on the explicit consent of individual clients, which includes the transfer, but not storing, of a client’s data.
An account aggregator merely acts as a conduit between FIUs and FIPs and does not process the data. According to Sahmati, a collective account aggregator ecosystem, an account aggregator is ‘data-blind’ as the data that flows through them is encrypted and can be processed only by the FIU for whom the data is intended. Also, an account aggregator does not and cannot store any user’s data – thus, the potential for leakage and misuse of user’s data is prevented.
Rahul Chari CTO and co-founder of PhonePe said, ”The account aggregator licence will allow us to play a pivotal role in shaping the emergent account aggregator ecosystem for consent-based financial data sharing”.
“Our account aggregator technology stack will enable any Financial information user (FIU) to instantly retrieve financial information with customer consent from the Financial information provider (FIP). We are looking forward to working closely with all the industry stakeholders to take forward RBI’s vision of driving deeper financial inclusion across the country,” he said.