Following this announcement, the Reserve Bank of India will focus on developing a new interoperability of digital payment systems for internet banking services, aiming to provide faster, more efficient, and more secure fund settlements for merchants and traders in the region. The launch is expected to take place in 2024, as the financial institution has already received the needed approval for implementing the system to the NPCI Bharat BillPay Ltd (NBBL).
The Reserve Bank of India (RBI) is India’s central bank and regulatory body, which is responsible for launching regulatory requirements and compliance laws of the local industry’s banking system. The financial institution also manages the country’s main payment systems, while also focusing on the promotion of the area’s overall economic development.
At the moment, the internet banking transactions that are processed through the Payment Aggregators (Pas) are not interoperable, which implies that a bank or a financial institution is required in order to integrate separately with each PA of different online traders of businesses. The Reserve Bank of India expected to launch this interoperable payment system for internet banking in order to meet the needs, preferences, and demands of customers and clients in an ever-evolving market. At the same time, the financial institution will prioritise the process of remaining compliant with the regulatory requirements and laws of the local industry.
Given the several number of payment aggregators, the process of integrating with every PA is difficult and it requires multiple resources and information. At the same time, due to the overall absence of a common payment system, as well as a set of rules for these transactions to take place, there are multiple delays that take place in the actual receipt of payments. In addition, there also exists the possibility of increased settlement risks and fraud.
Throughout the launch of an interoperable payment system for internet banking, the Reserve Bank of India aims to accelerate the overall development of India’s journey in digital payments, while also prioritising the notion of safety and efficiency of the system.
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