REGULATING PAYMENT SERVICE PROVIDERS IN THE IFSCA: A PRIMER

On January 29, 2024, the International Financial Services Centre Authority (“IFSCA”) notified the IFSCA (Payment Services) Regulations, 2024, for the regulation and supervision of any person proposed to provide payment services in or from the International Financial Service Centre (“IFSC”). According to these regulations, it is now mandatory for any person seeking to operate as a payment service provider in or from the IFSC to obtain prior authorization from the IFSCA. The regulations categorize payment services into five classes, including account issuance services, e-money issuance services, merchant acquisition services, escrow services, and cross-border money transfer services. To perform such services, a person must meet eligibility criteria and comply with specific requirements based on the type of payment services offered in the IFSC. With the issuance of these regulations, the IFSCA has demonstrated its intent to provide a comprehensive regulatory framework for the entities wishing to establish payment systems in the IFSC. INDUSLAW's Namita Viswanath, Raghav Muthanna, Ananya Dash and Himangini Mishra analyse the IFSCA (Payment Services) Regulations, 2024.