Decoding RBI’s new digital payments moves and their impact on fintech ecosystem
The Reserve Bank of India (RBI) announced a slew of measures for digital payments such as allowing fintech companies to process RTGS and NEFT transactions, and also set new norms on interoperability and cash withdrawal facilities for digital payment wallets. These measures are aimed at leveling the playing field for non-bank payment operators and banks, while also reducing settlement risks by widening the ecosystem. This means that companies such as Paytm, Visa, Mastercard and PhonePe among others will soon be able to process RTGS and NEFT payments. The central bank governor Shaktikanta Das in his Monetary Policy Committee (MPC) address said that fintech companies such as prepaid instrument issuers (PPIs), card networks and TReDS operators, among others, will now be allowed to become members of its centralised payment systems, such as RTGS and NEFT. The move is significant as these channels, typically used for the processing of big-ticket interbank settlements and business payouts, have been accessible only by banks until now.