India: Reserve Bank consults on Guidelines for Payment Gateways and Payment Aggregators
The Reserve Bank of India (Reserve Bank) has published a discussion paper on ‘Guidelines for Payment Gateways and Payment Aggregators.’
The discussion paper seeks public comments on comprehensive guidelines covering payments-related activities of payment gateways and payment aggregators (PGPAs).
PGPAs are entities that:
- provide technology infrastructure to route and/or facilitate the processing of an online payment transaction and perform other functions without actually handling the funds.
- facilitate e-commerce sites and merchants to accept various payment instruments from customers. The customers are able to discharge their payment obligations to the merchants without the need for the latter to create a separate payment integration system of their own.
- facilitate merchants to connect with acquirers. In the process, they receive payments from customers, pool and transfer them to the merchants after a time-lag.
According to the Reserve Bank, concerns with PGPAs which necessitated this consultation include the following:
- activities of PGPAs in online transactions are extremely crucial. These 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; and
- the customer ordinarily has very limited access to the PGPAs and must rely on merchants or banks who only can seek redress from the payment aggregators. The lack of proper redress mechanism and uniformity in practice across the entities needs to be addressed.
Stakeholders are required to submit comments by October 17, 2019.
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