Tag: payments

RBI Not Planning Harsher Rules to Curb Fintech Sector After Paytm Strictures, Official Says

India’s banking regulator doesn’t intend to impose drastic measures on the country’s fintech sector, a senior official said, weeks after it stunned investors by abruptly suspending much of the operations of Paytm Payments Bank, founded by high-flying billionaire Vijay Shekhar Sharma.

There are “no harsher measures coming on fintech,” P. Vasudevan, an executive director in charge of enforcement at the Reserve Bank of India, said on Friday. The central bank would be happy to see self-regulation for the sector, but expected firms to follow rules on data privacy, Vasudevan said. He added the supervisor wants to have a hands-off approach on fintech regulation.

The comments from Vasudevan, a key official closely involved in the development of the payments space in India in the past decade, are comforting even as the regulator cranks up its actions against payments firms violating the customer verification and data protection norms put in place by the central bank.

SoftBank Group Corp.-backed Paytm, a giant in India’s fintech space, has been in the crosshairs of the regulator for some time, with multiple warnings over the past two years about questionable dealings between its popular payments app and its lesser-known banking arm. The RBI is considering scrapping the license of Paytm Payments Bank Ltd. as early as next month, Bloomberg reported earlier this month.

Apart from imposing measures against Paytm bank, the regulator caused anxiety among payments services providers this week after it asked a large card network to halt certain operations. The card network, the central bank argued, was not allowed to offer a payment system without having authorization.

RBI officials, including Governor Shaktikanta Das, had said earlier this month that the regulator is supportive of the fintech industry and wants companies to grow.

© 2024 Bloomberg LP

(This story has not been edited by NDTV staff and is auto-generated from a syndicated feed.)

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Elon Musk to Upgrade X With Payment Features Soon; No Word on User-Requested Crypto Integration

Elon Musk recently disclosed his plans to add payments feature to the X app (formerly Twitter) by mid-2024. The multi-billionaire tech mogul has been working towards his goal of transforming X into an ‘everything app’ — prior to Musk’s takeover of the platform, Twitter was characterised as a microblogging platform. Interestingly, Musk chose to leave out the mention of cryptocurrencies while speaking about his digital payments feature plan for X. Crypto payments remain a much-requested feature on X, especially among the platform’s avid cryptocurrency enthusiasts.

Musk told ARK Invest’s Cathie Wood in an interview on Thursday that several licence approvals are awaited before X could also function as a money transmitter. This means that users might have to wait until mid-2024 before the payments feature is finally rolled out on the platform, according to Musk. While Musk admitted that X was a bit late in sending all these required applications, he did not reveal any plans to integrate crypto with X’s upcoming payment feature. On the contrary, Musk recently revealed that he spends “hardly any” time mulling over digital assets while responding to a question generated by his own GenAI initiative called Grok.

This apparent cold shoulder that the tech mogul is giving the crypto sector has sparked discussions among users on the social media platform.

As of August this year, X had acquired a currency transmitter licence in Rhode Island, Michigan, Missouri, and New Hampshire.

It is notable that while Musk remains tight-lipped around cryptocurrencies, his EV company Tesla still holds BTC worth $148 million (roughly Rs. 1,232 crore). The company also permits the purchase of select Tesla merchandise via Dogecoin. In 2022, it was reported that Musk’s tunnel construction company called The Boring Company was letting customers pay in DOGE for rides on the Las Vegas transit system.

It was reported in April that Musk had pitched his favourite cryptocurrency, Dogecoin, as a payment option for users seeking to avail Twitter Blue services. That, however, did not happen as the months unfolded. For now, it remains unclear whether X plans to support crypto transactions as part of the upcoming payments feature.

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RBI Seeks Public Opinion on Fees, Charges in Payments Systems: All Details

The Reserve Bank on Wednesday sought views from the public on fees and charges in payment systems, with an aim to make such transactions affordable as well as economically remunerative for the entities involved. The payment systems include Immediate Payment Service (IMPS), National Electronic Funds Transfer (NEFT) system, Real Time Gross Settlement (RTGS) system and Unified Payments Interface (UPI). Debit cards, credit cards and Prepaid Payment Instruments (PPIs) are among the other payment instruments.

The focus of RBI’s initiatives in the payment systems has been to ease frictions which may arise from systemic, procedural or revenue-related issues, the central bank said while releasing a discussion paper on ‘Charges in Payment Systems’.

The Reserve Bank of India (RBI) has sought public views on 40 specific questions with regard to charges and levies in payment systems by October 3.

While there are many intermediaries in the payments transaction chain, consumer complaints are generally about high and non-transparent charges.

RBI stressed that charges for payment services should be reasonable and competitively determined for the users, and provide optimal revenue stream for the intermediaries.

“To ensure this balance, it was considered useful to carry out a comprehensive review of the various charges levied in the payment systems by highlighting different dimensions and seeking stakeholder feedback,” it said.

Charges in a payment system are the costs imposed by the Payment Service Providers (PSPs) on the users (originators or beneficiaries), for facilitating a digital transaction. The charges are recovered from the originators or the beneficiaries depending on the type of payment system.

In a funds transfer payment system, the charges are generally recovered from the originator of the payment instruction. These are usually levied as an add-on to the amount earmarked for remittance.

In the case of a merchant payment system, the charges are usually recovered from the final recipient of money (merchant). This is done by deducting the same from the amount receivable by the merchant or a discount to the amount receivable by the merchant.

Entities involved in providing digital payment services incur costs, which are typically recovered from the merchant or the customer or is borne by one or more of the participants.

While there are both advantages and disadvantages of customers bearing these charges, they should be reasonable and should not become a deterrent in the adoption of digital payments, the RBI had said earlier.

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