NPCI Orders Payment Service Providers, Others To Set Up ODR System

SUMMARY

The move has been taken to address complaints relating to digital transactions done via the Unified Payments Interface (UPI) and also, offer convenience to the customers

If the participants (banks, payment service providers and third-party applications) fail to introduce the ODR system for UPI users, then NPCI will stop onboarding new customers for such participants from 1st October 2022 onwards

According to an Inc42 report, 54,057 Lakh UPI transactions have been made in the month of March

National Payment Corporation of India (NPCI) has recently directed banks, payment service providers, and third-party applications to introduce an online dispute resolution (ODR) system.

The move has been taken to address complaints relating to digital transactions done via the Unified Payments Interface (UPI) and also, offer convenience to the customers.

According to the NPCI circular dated April 11, all participants in the UPI ecosystem are required to implement an ODR system for disputes and grievances related to failed transactions by September 30, 2022.

All participants (banks, payment service providers and third-party applications) have also been directed to ensure that credit and reversal processing is enabled as part of the implementation.

If the participants fail to offer these services to UPI users, then NPCI will stop onboarding new customers for such participants from 1st October 2022 onwards.

Incorporated in 2008, NPCI operates retail payments and settlement systems in India. It has introduced various payment reforms such as RuPay cards, UPI, BHIM, and NETC Fastag, among others.

Extending WhatsApp’s UPI Service

Recently, NPCI allowed WhatsApp to extend its UPI service to an additional 60 Mn users. With this, as many as 100 Mn WhatsApp would now be able to use UPI payments on the platform.

In a press statement, it said, “NPCI has approved an additional 60 Mn users on UPI for WhatsApp. With this approval, WhatsApp will be able to expand the service to its 100 Mn users.”

The move came as a huge relief for WhatsApp which was seeking the removal of a cap on the number of users it can roll out the service to.

NPCI has been gradually reducing the cap on WhatsApp over the years. The Corporation had, in 2020, given its nod to the social media platform to launch its payments service. Back then, it had allowed WhatsApp to onboard 20 Mn users and then gradually increased the number to 40 Mn in November last year.

Surging UPI Ecosystem

According to the Inc42 report, 54,057 Lakh UPI transactions have been made in the month of March. Of this, 25,271.5 Lakh transactions were made through PhonePe followed by Google Pay, Paytm and Amazon Pay that have recorded 18381.2 Lakh, 8371.4 Lakh, 763.4 Lakh digital transactions on their platforms respectively.

Moreover, WhatsApp and BHIM logged 25.4 Lakh and 248.8 Lakh digital transactions last month.

This shows that PhonePe is constantly rising its share in the UPI ecosystem this quarter, followed by Google Pay and Amazon Pay.