The RBI has instructed the Bengaluru-based buy-now-pay-later fintech company Simpl (One Sigma Technologies Pvt Ltd) to immediately cease all payment, clearing, and settlement operations. The directive comes because the company was operating a payment system without the necessary Certificate of Authorisation as mandated by the Payment and Settlement Systems (PSS) Act of 2007. The directive is dated September 25, 2025, according to multiple reports.
The Reason Behind RBI’s Action
RBI’s stated concern is legal and systemic, any entity performing payment-system functions that involve clearing and settlement must hold the authorisation the PSS Act requires. The central bank’s intervention suggests it found Simpl’s operations went beyond permitted merchant-facing services and into activities that require formal regulatory oversight. That distinction is central to the order.
Impact on merchants and consumers
Simpl powers checkout/BNPL options on large merchants, including names cited in coverage such as Zomato, BigBasket, Rapido and other platforms. The halt risks short-term disruption for consumers used to frictionless “pay later” checkout flows, and forces partner merchants to switch payment rails or disable Simpl options until compliance issues are resolved.
Is RBI being too strict?
The RBI’s decision makes sense from a regulatory perspective. Payment and settlement systems affect both consumer protection and systemic risk. Allowing exceptions could result in inconsistent oversight. Many BNPL businesses use the fintech model, which blends credit and payments, creating regulatory uncertainties that could be used without the required authorisation. Many experts believe that clear rules and strict enforcement are essential to protect users and the entire payments system.
Risks of heavy-handedness
Critics will say a sudden halt can harm consumers and startups, especially where licensing rules are unclear or compliance timelines impractical. Abrupt enforcement can also chill innovation if regulators don’t provide clear, proportionate pathways for fintechs to regularise operations.
Implications for Fintech Startups
The RBI’s action against Simpl highlights a larger truth: India’s fintech growth needs clearer rules and faster licensing pathways. Although they may appear strict, the rules help the sector maintain clear standards instead of confusing ones. This approach fosters financial stability and protects consumers.
