The Reserve Bank of India (RBI) is seeking public feedback from consumers and merchants on all aspects of payment system fees across the country.
The central bank published a discussion paper Wednesday (17 August) with a request for feedback by 3 October at the latest. The paper covers all aspects related to fees in payment systems including Immediate Payment Service (IMPS), National Electronic Funds Transfer (NEFT), Real Time Gross Settlement (RTGS), Unified Payments Interface (UPI), Prepaid Payment Instruments ( PPIs), debit cards and credit cards.
“While there are many intermediaries in the payments chain, consumer complaints generally involve high and non-transparent fees,” RBI said in a press release distributed with the paper. “Fees for payment services should be reasonable and competitive for users, while providing optimal revenue streams for intermediaries.”
The feedback is used to influence the direction of government policy and regulatory intervention strategies.
The RBI had previously advised banks to ensure that the merchants they onboard do not pass on MDR (merchant discount rate) fees to customers when accepting debit card payments. The same has not been mandated for transactions made with credit cards and PPIs.
Now the bank is asking for feedback on whether the surcharges are justified, whether they should be allowed and whether they should be regulated. Convenience fees charged on top of purchases of cinema pass and airline ticket booking services receive the same scrutiny.
See also: The Reserve Bank of India is strengthening rules for digital lending
Earlier this month, the Central Bank of India issued new guidelines for digital lending apps and the lenders that work with them, PYMNTS reported.
The new regulator states that only regulated financial institutions (FIs) can issue and collect loan repayments. Fees paid to apps are now covered by the lender without charging borrowers.
Additionally, in June, the RBI ruled that non-bank issuers of PPIs can no longer load cards and digital wallets with funds through lines of credit. RBI’s edict affects FinTech companies that offer lines of credit to their digital wallet customers and those that offer prepaid cards in partnership with a banking partner or a non-banking partner.
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