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| RBI Greenlights Interoperable Net Banking Payment System |
The Reserve Bank of India (RBI) has authorized the implementation of an interoperable payment system for internet banking transactions, aimed at enhancing the digital payments landscape in India. This development is expected to simplify the process for customers to pay businesses via net banking, irrespective of whether their banks and the merchants' payment aggregators are connected.
NPCI Bharat BillPay is set to launch this system, with RBI Governor Shaktikanta Das announcing the expected rollout during the current calendar year.
Key Benefits:
- Merchants will enjoy faster fund settlements as the new system eliminates the need for individual bank-aggregator tie-ups.
- Customers will have more payment options and convenience, being able to pay online through net banking even if their bank is not integrated with the merchant's payment aggregator.
Challenges Addressed:
Governor Das highlighted current challenges where a customer's bank not being integrated with the merchant's payment aggregator results in the bank's name not appearing under the net banking payment option. This limitation makes integration with every payment aggregator difficult for banks, leading to delays in payments and settlement risks.
Role of Payment Aggregators:
Payment aggregators play a crucial role in facilitating digital payments between consumers and merchants. Currently, there are 18 authorized online payment aggregators in India, including Razorpay Software Pvt. Ltd, Amazon Pay (India) Pvt. Ltd, Google India Digital Services Pvt. Ltd, Tata Payments Ltd, and Zomato Payments Pvt. Ltd.
Internet Banking as a Preferred Channel:
Internet banking has long been a favored mode for online merchant payments, including income tax, insurance premiums, mutual fund payments, and e-commerce transactions. Recognizing its importance and the challenges in the current system, RBI had envisioned an interoperable payment system for internet banking transactions in its Payments Vision 2025.
Benefits for Smaller Payment Aggregators:
Experts believe that the interoperable net banking payment system will particularly benefit smaller payment aggregators, leveling the playing field with larger players who have already made arrangements with most leading banks in the country.