Global digital payment companies have asked the Reserve Bank of India to create a level playing field for the entry of retail payment networks and encourage the formation of national bulk payment networks like RTGS (real time gross settlement) as it looks to open up retail payment systems in India.
The RBI had invited suggestions on the authorisation of new retail payment networks on January 21 which sought to minimise the concentration risk in retail payment systems from a financial stability perspective and foster innovation and competition.
Visa reportedly shared a note with RBI which said, “Consider encouraging new players to participate in and promote pan-India payment platforms, such as real time payments (RTPs) and bulk and repetitive payments, to foster innovation and competition.”
It also advised, “The criteria for licensing should be based on principles that allow entry in retail payment systems in an open and competitive manner to the entities having proven robust capabilities.”
At the same time, MasterCard reportedly said that it was looking at the initiative as an opportunity for new companies to enter the space and bring in innovation.
Some of the other suggestions included:
- There is a need to get companies with proven international financial standards for anti-money laundering and know-your customer requirements.
- A detailed technical eligibility criteria with RBI putting forward proper net worth thresholds so that a platform’s stability is not compromised.
- RBI needs to strike a balance between monopolisation of platforms offering retail digital payments on the one side and allowing a ‘multitude’ of players on the other, since it will require very serious players to be in this business.
Global payment giants can bring in their experience and push up the level of security and stability in the entire ecosystem. As the Indian government’s push for digital payment continues to bolster the digital lifestyle in the country, the backend system and larger players entering the market further support the country’s digitalisation goals.
[The development was reported by ET.]