Failed digital transactions find solution

In a major development for digital payment services, the Reserve Bank of India has decided that payment system operators (PSOs) will have to implement Online Dispute Resolution (ODR) systems in a phased manner.

Mumbai: In a major development for digital payment services, the Reserve Bank of India has decided that payment system operators (PSOs) will have to implement Online Dispute Resolution (ODR) systems in a phased manner.

The RBI has said that to begin with, authorised PSOs shall be required to implement ODR systems for failed transactions in their respective payment systems. Based on the experience gained, ODR arrangements will be extended to other types of disputes and grievances.

As the number of digital transactions rise significantly, there is a concomitant increase in the number of disputes and grievances.

"Recourse to technology driven redressal mechanisms that are rule-based, transparent and involve minimum (or no) manual intervention is necessary to deal with them in a timely and effective manner. Accordingly, the Reserve Bank shall require Payment System Operators (PSOs) to introduce Online Dispute Resolution (ODR) Systems in a phased manner," RBI's Statement on Developmental and Regulatory Policies said.

Further, the central bank has also proposed to allow a pilot scheme for small value payments in off-line mode with built-in features for safeguarding interest of users, liability protection, among others.

It noted that there has been considerable growth in digital payments using mobile phones, cards, wallets, etc. However, lack of internet connectivity or low speed of internet, especially in remote areas, is a major impediment in adoption of digital payments.

Against this backdrop, providing an option of off-line payments through cards, wallets and mobile devices is expected to further the adoption of digital payments. The Reserve Bank has been encouraging entities to develop offline payment solutions.

"Based on experience gained, detailed guidelines for roll-out of the scheme will be announced in due course, said the statement.

RBI to allow offline payments through cards on pilot basis

The Reserve Bank also announced a scheme on pilot basis for offline retail payments using cards and mobile devices to encourage customers to go for digital transactions even in those places that lack internet connectivity.

"The Reserve Bank has been encouraging entities to develop offline payment solutions. It is, therefore, proposed to allow a pilot scheme for small value payments in offline mode with built-in features for safeguarding interest of users, liability protection, etc," it said in 'Statement on Developmental and Regulatory Policies'.

The instructions in this regard will be issued shortly, it added.

The central bank said that based on experience gained, detailed guidelines for the rollout of the scheme will be announced in due course.

Observing that lack of internet connectivity or low speed of internet, especially in remote areas, is a major impediment in adoption of digital payments, the RBI said "against this backdrop, providing an option of offline payments through cards, wallets and mobile devices is expected to further the adoption of digital payments".

(With input from agencies)