The Reserve Bank of India (RBI) has given PhonePe Account Aggregator (AA) Pvt Ltd, a subsidiary of Walmart-backed digital payments firm PhonePe, in-principle authorisation to function as an AA.

With the licence, PhonePe can now launch its AA platform, which will allow for the free and immediate exchange of financial data between financial information users (FIUs) and financial information providers (FIPs) with the consent of customers, allowing Indian consumers to access financial services more quickly, cheaply and conveniently.

The AAs are accountable for offering services based on individual clients' explicit authorisation, which includes data transfer but not storage. An AA only serves as a link between FIUs and FIPs, not as a data processor.

According to Sahmati—which is a Collective of Account Aggregator ecosystem set up as a non-government, private limited company—"An AA is 'data-blind' as the data that flows through an AA is encrypted and can be processed only by the FIU for whom the data is intended. Also, an AA 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 that the firm will now be able to shape the emerging AA ecosystem for consent-based financial data exchange with the licence. Additionally, he said: "Our AA 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."

However, CAMSFinServ, Cookiejar Technologies, FinSec AA Technologies and NSEL Asset Data are the four licenced AAs currently in operation. Apart from PhonePe, Perfios Account Aggregation Svcs and Yodlee Finsoft, both have received in-principle approval. At this moment, around 12 banks and organisations are currently adopting the FIU and FIP architecture in various phases that includes State Bank of India (SBI), HDFC Bank, ICICI Bank and LendingKart.

Account Aggregator

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