Mumbai, Mar 4 (IANS): RBI Governor Shaktikanta Das on Monday said that the interoperable payment system for internet banking is expected to be launched this year to facilitate quicker settlement of funds for merchants.
He said that the RBI has given its approval for implementing such an interoperable system to NPCI BharatBill Pay Ltd (NBBL) and the measure will further boost user confidence in Digital Payments.
Addressing the Digital Payments Awareness Week here, Das said, “Internet Banking is one of the oldest modes for online merchant payment transactions. It is a preferred channel for payments like income tax, insurance premium, mutual fund payments, e-commerce, etc. At present, such transactions processed through Payment Aggregators (PAs) are not interoperable, i.e., a bank is required to separately integrate with each PA of different online merchants. As a result, if a customer wants to make payment from his bank account to a certain merchant, the merchant’s PA and customer’s bank must have an arrangement. Given the multiple number of payment aggregators, it is difficult for each bank to integrate with each PA. Further, due to the lack of a payment system and a set of rules for these transactions, there are delays in actual receipt of payments by merchants and settlement risks.”
The new interoperable system will rectify this drawback and facilitate the quicker settlement of transactions between merchants, he explained.
Das said “As a regulator, we are committed to play our part in India’s journey in digital payments.” He urged all stakeholders like industry, payment system operators, media, digital payment users, and others to take up the responsibility of fulfilling the mission of ‘Har Payment Digital’.
He pointed out that retail digital payments in India have grown from 162 crore transactions in FY2012-13 to over 14,726 crore transactions in 2023-24 (till February 2024) which is a 90-fold increase over 12 years.
“Today, India accounts for nearly 46% of the world’s digital transactions (as per 2022 data). The extraordinary growth in digital payments is also evident in the Reserve Bank's Digital Payment Index, which has witnessed a four-fold rise in the last five years,” he said.
He also said that the country’s flagship ‘UPI’, has become the most talked about fast payment system not only in India but across the world. It is the biggest contributor to the growth of digital payments in India. The share of UPI in Digital Payments has reached close to 80 per cent in 2023, he added.
He pointed out that currently, UPI is processing close to 42 crore transactions in a day while at a macro level, the volume of UPI transactions increased from 43 crore in calendar year 2017 to 11,761 crore in 2023.
Since the start of the mission in March 2023, the number of new UPI users added has been 6.65 crore between March 1, 2023 to January 31, 2024. The Reserve Bank’s Payments Infrastructure Development Fund (PIDF) has also further aided this growth, with additional deployment of over 1.2 crore digital payment touch points, he added.
He also said that the trust in digital payments is built on the pillars of transparency, ease of use and above all, security. Hence the RBI was aiming to create awareness around safety and security of Digital Payments. The goal is to reach out and empower every individual with the knowledge and tools necessary to navigate this Digital Payments landscape with confidence and ease, he added.