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Update: Reserve Bank of India publishes ‘Payments Vision-2025’
Update: Reserve Bank of India publishes ‘Payments Vision-2025’

June 24, 2022

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  1. Backdrop

Recently, the Reserve Bank of India (RBI) has published its latest Vision Document 2025 (Document). The Document builds on the Payments Vision 2019-21 and outlines the thought process for the period upto December 2025. This document is in line with RBI’s strategic direction and implementation plan for structured development of the payment and settlement systems in India through periodic payment vision documents.

The core theme of the Document is ‘E-Payments for everyone, everywhere, everytime’ and aims to provide users with safe, secure, fast, convenient, accessible and affordable e-payment options.

  1. Key highlights of new initiatives by RBI
  • The Document focuses on integrity, inclusion, innovation, institutionalisation and internationalisation. Of the initiatives under these five heads, the RBI intends to have outcomes including – more than 3x increase in digital payments, reduce the volume of cheque-based payments to be less than 0.25% of the total retail payments; UPI to register annualised growth of 50% and IMPS/NEFT at 20%; increase of payments transactions turnover vis-à-vis GDP to 8 etc.
  • Integrity: Under this head, the RBI intends to weave in alternative authentication mechanisms for digital payment transactions; expand interoperability to contactless transit card payments in offline mode; enhance scalability and resilience of payment systems; and leverage online dispute resolution for fraud monitoring and reporting amongst others. It has also emphasised on exploring local processing of payment transactions.
  • Inclusion: In this, RBI intends to enable geo-tagging of digital payment infrastructure and transactions; revisit guidelines for prepurchase payment instruments; consider regulations of all significant intermediaries in payment ecosystem; upscale customer outreach and awareness activities; attempt regulation of FinTechs in payments space amongst other.
  • Innovation: Herein, the RBI has stated that it shall consider facilitating framework for IoT and context based goods; migrate RBI operated payment systems to ISO 20022 standard; link credit cards and credit components of banking products to UPI amongst others. RBI has also emphasised that it shall explore guidelines on payments involving Buy-Now-Pay-Later services.
  • Institutionalisation: For this, RBI intends to constitute a payments advisory council; comprehensively review legislative aspects of Payments and Settlement Systems Act.
  • Internationalisation: The RBI has noted that it shall ensure global outreach of RTGS, NEFT, UPI and RuPay cards; expand Indian Financial Network (INFINET) framework across jurisdictions and explore 2-FA for cross-border card transactions.

 

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Apurva Singh
Senior Policy Associate

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