The Reserve Bank of India (RBI) has unveiled the Payments Vision 2025 document which proposes a host of innovative payment systems and regulation of BigTechs, fintechs, buy-now-pay-later (BNPL) systems, and introduction of a central bank digital currency (CBDC), among others.
“The Payments Vision 2025 promises to further elevate our payment systems towards a realm of empowering users with affordable payment options accessible anytime and anywhere with convenience,” it said.
The RBI document has proposed enabling of geotagging of digital payment infrastructure and transactions and revisiting guidelines for prepaid payment instruments (PPIs), including closed system PPIs. It also proposed a framework for regulation of all significant intermediaries in payments ecosystem and link credit cards and credit components of banking products to UPI.
Other proposals include bringing in enhancements to Cheque Truncation System (CTS), including One Nation One Grid clearing and settlement perspective, and creating payment system for processing online merchant payments using internet and mobile banking. It also proposed regulation of BigTechs and FinTechs in the payments space.
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The vision document recommended that the BNPL method should be examined, and issuance of appropriate guidelines on payments involving BNPL should be explored. BNPL services have developed into a new payment mode alongside the existing payment modes like cards, UPI, and net banking. This channel, facilitated by a few payment aggregators, leverages the existing nodal account (escrow account after authorisation) to route payments between BNPL customer and a merchant.
“The Payments Vision 2025 has the core theme of E-payments for everyone, everywhere, everytime (4Es) and aims to provide every user with safe, secure, fast, convenient, accessible and affordable e-payment options,” it said.
“The Payments Vision 2021 had envisaged to empower every Indian with access to a bouquet of e-payment options that is safe, secure, convenient, quick and affordable, and had set four goalposts of competition, cost, convenience and confidence with 36 specific action points and 12 expected outcomes,” the central bank said in a release.