Complying with RBI’s “Guidelines on Payment Aggregators and Payment Gateways” and “KYC Master Direction, 2016”

A guide for Stripe users in India

  1. Introduction
  2. What this means for Stripe users
    1. Bank account verification
    2. Proof of business for sole proprietorship firms that are not registered
    3. Other requirements
  3. Conclusion
  4. Resources

The Reserve Bank of India (RBI) issued the “Guidelines on Regulation of Payment Aggregators and Payment Gateways” in March 2020 and introduced various measures for payment aggregators operating in India, including requirements for licensing, governance, Know Your Customer (KYC) and onboarding, the settlement and maintenance of escrow account(s), and more.

As a result of the guidelines, Stripe India Private Limited, in its capacity as a payment aggregator, is required to comply with RBI’s KYC Direction, which prescribes various KYC measures, including the collection and verification of identity documents.

What this means for Stripe users

To ensure compliance with the RBI’s guidelines and KYC Direction, Stripe India is making certain changes to the user onboarding process—applicable to both new and existing users—and has introduced various measures, including:

  • Bank account verification
  • Proof of business for sole proprietorship firms that are not registered

Bank account verification

To offer an onboarding experience that is in compliance with the regulations, we are making it mandatory for our users to provide a payout bank account that is owned by the user and used for transaction settlement purposes.

Therefore, it is important that you provide a payout bank account that is strictly in the name of the legal entity reflected on your Stripe account, or in the name of the proprietor, if your business is a sole proprietorship firm and does not have a bank account in its name. As part of the KYC process, Stripe will verify this information.

Proof of business for sole proprietorship firms that are not registered

We now require a proof of business for sole proprietorship firms that are not registered. The proof of business can be one of the following:

  • A Goods and Services Tax Identification Number (GSTIN) or Importer Exporter Code (IEC) applicable to the business (if available)
  • Documents that provide proof of business, for example:
    • Registration document (registered with local authorities or the like)
    • Tax returns
    • Certificate or license of practice (for self-employed individuals)
    • Utilities bills

For a full list of accepted documents, please see here.

Other requirements

Furthermore, we now collect a few additional KYC details from our users, including:

  • A permanent account number (PAN): It is now mandatory for our users (with the exception of sole proprietorship firms) to provide a PAN as the form of identification for each of the following: the legal entity, any individuals associated with the entity as business owners, and any representative acting as the account opener
  • A phone number (for the legal entity and the account openers)
  • The emails and business titles of the account openers
  • Any URL(s) containing terms and conditions of the service provided, including refund and return timelines

Conclusion

Stripe’s platform is designed to help our users stay up to date with new features or changing regulations. We hope this guide has helped you understand the RBI requirements that now apply to Stripe and how Stripe users can stay compliant. For additional information, please visit the resources linked below.

If you have any questions, please let us know.

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