The Reserve Bank of India’s proposed stricter KYC guidelines for businesses using payment aggregators to accept digital payments has raised concerns among industry experts. Payment aggregators like Razorpay, Cashfree Payments, and PayU play a key role in facilitating digital transactions between consumers and merchants. However, the new guidelines would require payment aggregators to conduct ‘contact point verification’ for both existing and new merchants, involving physical verification of business premises. This additional KYC burden could disproportionately impact smaller online merchants, as payment aggregators may not be willing to spend extra resources on them due to limited earnings. The industry argues that the proposed changes could increase onboarding costs and make it more expensive for small sellers to operate online.