Reserve Bank Governor Shaktikanta Das on Monday said the launch of interoperable payment system for internet banking is likely in 2024 which will facilitate quicker settlement of funds for merchants.
Internet banking is one of the oldest modes for online merchant payment transactions and is a preferred channel for payments like income tax, insurance premium, mutual fund payments, and e-commerce, among others.
Currently, such transactions processed through Payment Aggregators (PAs) are not interoperable, meaning, a bank is required to separately integrate with each PA of different online merchants.
"Given the multiple number of payment aggregators, it is difficult for each bank to integrate with each PA. Further, 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," Das said while addressing the Digital Payments Awareness Week celebrations here.
Keeping in view these bottlenecks, the RBI's Payments Vision 2025 had envisaged an interoperable payment system for internet banking transactions.
In pursuance of the objective, the central bank had given approval for implementing such an interoperable system to NPCI Bharat BillPay Ltd (NBBL).
"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," the Governor said.
The measure, he said will further boost the user confidence in digital payments.
"As a regulator, we are committed to playing our part in India’s journey in digital payments," Das said.
The Governor further said the flagship of the country's payment systems, the ‘UPI’, has become the most talked about fast payment system not only in India but across the world.
The share of UPI in digital payments reached close to 80 per cent in 2023. At a macro level, the volume of UPI transactions increased from 43 crore in CY-2017 to 11,761 crore in CY-2023.
Currently, UPI is processing close to 42 crore transactions in a day.
Das said trust in digital payments is built on the pillars of transparency, ease of use and above all, security.
Hence, reinforcing the notion of safety and security of the system is very important, the Governor said.
Except for the headline, this story has not been edited by The Telegraph Online staff and has been published from a syndicated feed.