The Reserve Bank of India (RBI) has outlined its series of initiatives designed to bring digital capabilities to all of India’s 1.38 billion citizens.
The Payments Vision 2025 has the core theme of ‘e-payments for everyone, everywhere, everytime’ and aims to provide every user with safe, secure, fast, convenient, accessible and affordable e-payment options.
The Vision hopes to facilitate access to e-payment options for every Indian citizen, and has its achievements anchored in four main ‘goalposts’: competition, cost, convenience and confidence.
In line with its amption to cultivate a competitive market and in tandem with its own launch, the Vision incorporates the creation of a new regulatory sandbox within a wider sense of self-regulation, and distributes access to centralised payment systems (CPS) to non-bank payment system operators (PSOs).
Competition also includes the ability for Indian citizens to make small value digital payments in an offline capacity alongside the increased appearance of phone-based payment services, the internationalisation of domestic payment systems and the enabling of ‘on tap’ authorisation for payment systems.
To further address the cost aspects, RBI is wavering its charges for transactions processed in the real time gross settlement (RTGS) and national electronic funds transfer (NEFT) systems, as well as dispersing charges for savings bank account customers for online transactions in NEFT.
The Bank is to review its ATM interchange fees, and will implement its payments infrastructure development fund (PIDF) scheme; increasing legal entity identifier (LEI) usage for large value cross-border and domestic payments.
In regards to achieving a truly convenient service, the Vision aims to be more responsive to failed transactions and the compensation that is offered on top of that. Additionally, the Vision aims to promote the availability of NEFT, RTGS and National Automated Clearing House (NACH) on an around-the-clock basis.
Recurring transactions that leverage cards, PPIs or UPI are to be subject to an e-mandate, while the Bank is to relax its requirements for additional factor of authentication (AFA) during small value card present transaction. In line with many PSPs around the world, the Bank is to also increase its limit for contactless transactions.
Lastly, to restore India’s confidence in digital payments, the Bank is to introduce a wider framework for payment aggregators and for the outsourcing of payment and settlement-related activities by PSOs, while also establishing the centralised payments fraud information registry (CPFIR).
Both card-on-file and card transactions are to be tokenised and payment system touchpoint will now fall subject to geotagging, which essentially means that the Bank will record the geographical coordinates of various payment touchpoints between merchants and customers.
The Vision was finalised following input from the Bank’s various stakeholders and guidance from the Board for Regulation and Supervision of Payment and Settlement Systems of the RBI.
The activities outlined in the Vision are centred on ideas of integrity, inclusion, innovation, institutionalisation and internationalisation, and of the multiple areas of digital payments it hopes to explore, the Vision’s broadscale adoption of payment infrastructures and new payment services, including buy-now-pay-later (BNPL) capabilities and talk of new contests and hackathons, are the most highly-anticipated.
They cover 47 specific initiatives and 10 expected outcomes, and build on the initiatives of Payments Vision 2019-21. RBI has been providing strategic direction and implementation plan for structured development of the payment and settlement systems in India through periodic Payments Vision documents since 2001.
