RBI directs BNPL startup Simpl to suspend payment operations: Report

The Reserve Bank of India (RBI) has reportedly ordered buy-now-pay-later (BNPL) startup Simpl to immediately halt all payment-related operations over an alleged regulatory breach.

The development was first reported by the Economic Times.

As per the report, RBI said that the Bengaluru-based company doesn’t have the requisite authorisation under the Payments and Settlement Systems (PSS) Act. The central bank said Simpl was operating as a payment system operator but lacks authorisation, as it doesn’t have the mandatory Certificate of Authorisation, according to the RBI’s letter dated September 25, 2025.

The order directed Simpl to immediately cease its operations involving payment, clearing and settlement functions. It emphasised that such operations without appropriate authorisation and approvals violate provisions of the PSS Act, the report said.

RBI can regulate and supervise payment systems in India, and Section 4 gives it the authority to prohibit any entity from running such systems without authorisation. Under the PSS Act, the RBI can issue directions, impose restrictions and revoke permissions of a company if it is found to be non-compliant.

Simpl, co-founded by former Goldman Sachs vice president Nitya Sharma and entrepreneur Chaitra Chidanand (who exited in 2020), offers BNPL services to customers across e-commerce, food delivery and quick commerce platforms. It allows users to buy instantly and pay later, usually within 15 days, with zero interest. It has many big clients, including Zomato, BigBasket, Rapido, Box8, etc.

Buy now, pay later: A challenge in itself

Buy now, pay later (BNPL) services have grown exponentially in recent years, mainly due to the ‘financialisation’ of everything. The mere fact that the youth are ready to get financing for a coffee or some groceries is driving them into debt, many reports have shown.

BNPL services allow people to buy things they can’t afford at the moment, and the idea of paying later, or paying in instalments (as allowed by many apps), takes away a part of the pain of the paying experience for individuals. This makes them spend more on things they don’t necessarily need, or make impulsive purchases that they wouldn’t have otherwise.

The rise of BPNL channels has been concerning, to say the least. While it allows people to spend with flexibility and manage their finances, it also encourages them to spend more by tapping into their psychological biases.

Many BNPL platforms also have many hidden charges, and are known to charge heavy interest after the due date, resulting in mounting debt for the middle class who opt for these payment methods in the first place.

One should plan their finances according to their incomes and read the terms and conditions of these platforms carefully before using them to avoid problems later.