RBI clears ‘interoperable’ net banking payments

RBI governor Shaktikanta Das said the central bank has approved a platform that will facilitate online merchants to receive payments from any bank via internet banking, without signing up for every bank.

Bharat Bill Payment System, an arm of the National Payments Corporation of India, will implement a new system of interoperable net banking payments.

This feature will make it easier for smaller businesses to do e-commerce, as even small payment aggregators can provide this service without on-boarding banks individually. The lower effort for payment aggregators is expected to result in lower payment charges for merchants.

Das said that internet banking is one of the oldest modes of online merchant payment transactions and is a preferred channel for payments like income tax, insurance premiums, mutual fund payments, and e-commerce.

At present, such transactions processed through payment aggregators are not interoperable. A bank must integrate separately with each PA of different online merchants and there must be an arrangement between the customer’s bank and the merchant’s PA.