Interoperable payment system for internet banking to be launched in 2024: RBI Governor

New Delhi: The Reserve Bank of India (RBI) is likely to launch an interoperable payment system for internet banking in the current calendar year that will enable faster fund settlements for merchants and give a further boost to online transactions, Governor Shaktikanta Das said on Monday.

Speaking at the ‘Digital Payments Awareness Week’ celebration in Mumbai, Das said the central bank has given approval for implementing such an interoperable system to NPCI Bharat BillPay Ltd (NBBL), a wholly-owned subsidiary of National Payments Corporation of India (NPCI).

“We expect the launch of this interoperable payment system for internet banking during the current calendar year. The new system will facilitate quicker settlement of funds for merchants,” he said.

The proposed system will enable customers to pay businesses through net banking irrespective of whether their banks and the merchants’ payment aggregator are integrated.

At present, online merchant payment transactions are processed through payment aggregators, which are not interoperable. So a bank is required to separately integrate with each payment aggregator of different online merchants.

If a customer wants to make payment from his bank account to a certain merchant, the merchant’s payment aggregator and customer’s bank must have an arrangement. Given the multiple number of payment aggregators, it is difficult for each bank to integrate with each payment aggregator.

“Due to lack of a payment system and a set of rules for these transactions, there are delays in actual receipt of payments by merchants and settlement risks,” said Das, terming it a bottleneck in the digital payment system.

“As a regulator, we are committed to play our part in India’s journey in digital payments,” he said.