The Reserve Bank of India is likely to bring all payment aggregators and payment gateways under its direct regulation. The indication of the same was given in a discussion paper released by the Central Bank of Tuesday.
If taken, the move will make it compulsory for these firms to abide to the regulatory compliances recommended by RBI on minimum net worth, eligibility criterion for board members and other entry point norms on technology, data storage and security.
“The activities of Payment Gateways and Payment Aggregators in online transactions are extremely crucial,” the central bank said. “Entities may be a source of risk in such a technology and customer experience intensive business if they have inadequate governance practices which may impact customer confidence and experience.”
According to the current guidelines, these companies are under indirect supervision of the Reserve Bank. Lenders with which these entities are operating business operations are asked to create a nodal account and scrutinise the daily settlements in these accounts.
However, citing the growth witnessed in the payments ecosystem, the central bank has proposed for making changes to the existing framework under which these companies are governed.
“The customer, ordinarily has very limited access to the Payment Gateways and Payment Aggregators and must rely on merchants or banks who only can seek redress from the Payment Aggregators. Lack of proper redress mechanism and uniformity in practice across the entities is also a matter of concern,” said the central bank.
“Sufficient time, of say one year, may be given to the existing market participants to achieve compliance with the required capitalisation norms,” the apex regulator said. “They shall adhere to the regulations from the date of issue of the regulations or as specified therein.”
RBI notified that that in its discussion paper its has opened the option for public comments following which the final guidelines would be issued.