The Reserve Bank of India on 17th August 2022, has released a discussion paper on charges in payment systems for public feedback. Feedback may be provided in respect of questions raised therein, including other relevant suggestions, through email on or before October 3, 2022.
The focus of RBI’s initiatives in the payment systems has been to ease frictions which may arise from systemic, procedural or revenue related issues. While there are many intermediaries in the payments transaction chain, consumer complaints are generally about high and non-transparent charges. Charges for payment services should be reasonable and competitively determined for users while also providing optimal revenue stream for the intermediaries. To ensure this balance, it was considered useful to carry out a comprehensive review of the various charges levied in the payment systems by highlighting different dimensions and seeking stakeholder feedback.
The discussion paper covers all aspects relating to charges in payment systems [such as Immediate Payment Service (IMPS), National Electronic Funds Transfer (NEFT) system, Real Time Gross Settlement (RTGS) system and Unified Payments Interface (UPI)] and various payment instruments [such as debit cards, credit cards and Prepaid Payment Instruments (PPIs)], etc. The feedback received would be used to guide policies and intervention strategies.
The charges levied in a payment system are generally governed by the rules of the PSO, in respect of both types of payment systems. In a merchant payment system, in general, the PSO rules decide the nature and distribution pattern of the charges among the different PSPs. Further, the distribution to intermediaries is decided as per agreement between them and the acquirers. In a funds transfer payment system, the originating customer is levied a charge by the originating PSP as an add-on to the transfer amount.
