Reserve Bank of India (RBI) has greenlit the launch of a groundbreaking interoperable payment system for net banking. This move is poised to transform online banking transactions, enhancing user convenience and streamlining fund settlements for merchants.
Despite the popularity of Internet banking for various payments like income tax and insurance premiums, the absence of interoperability has been a significant obstacle. Presently, transactions via payment aggregators lack interoperability, resulting in inefficiencies and a disjointed user experience. The introduction of an Interoperable Payment System aims to address this issue by integrating Internet banking transactions into a centralized payment system.
RBI Plan for New Payment System
To address this issue, RBI plans to integrate Internet banking transactions into a centralized payment system, akin to the Immediate Payment Service (IMPS) and the real-time gross Settlement (RTGS) systems. This initiative aims to foster seamless transactions and bolster user confidence in digital payments.
Purpose of Payment Vision 2025
RBI’s ‘Payments Vision 2025’ aims to triple the number of digital payment transactions by 2025 while reducing cheque-based payments to less than 0.25% of total retail payments. Major banks like HDFC Bank, ICICI Bank, and SBI are actively collaborating to devise the right implementation strategy for the interoperable payment system.
Initiative by Industry Collaboration
The success of this initiative hinges on the collaboration between banks and fintech firms. Leading payment aggregators like Billdesk, PayU, and Razorpay are also involved, showcasing the potential for a more competitive and innovative market.
Approval of the interoperable payment system marks a significant step towards advancing digital payments in India. With concerted efforts from key stakeholders, this initiative promises to revolutionize the landscape of Internet banking transactions, making them more efficient and user-friendly.
