RBI mandates online dispute resolution for digital payments



On 6 August 2020 RBI's governor, Mr. Das, released the Statement on Developmental and Regulatory Policies. This Statement sets out various developmental and regulatory policy measures, one of which is to promote innovation across the financial sector by leveraging technology through an innovation hub. 

As part of RBI's Payment System Vision 2021, the RBI introduced online dispute resolution (as a technology-driven, rule-based, customer-friendly and transparent) dispute redressal system for digital payments by issuing a directive under sections 10(2) and 18 of the Payment and Settlement Systems Act 2007 ("Directive"). 

All Payment System Operators ("PSO"), including banks and NBFCs (along with their participants), will now have to put in place an online dispute resolution system for resolving disputes and grievances relating to digital payments. Initially, PSOs will only have to put in place the system for failed transactions by 1 January 2021. Based on the initial success, the RBI will require the system to cover more categories of transactions. RBI guidelines also provided that if an aggrieved customer was unable to resolve the complaint online, he or she could approach the ombudsman after 1 month.


Who is impacted? 


The Directive impacts players across the financial sector, including but not limited to PSOs, participants of PSOs and Prepaid Payment Instruments (PPIs). This includes: PSO: National Payments Corporation of India, VISA, MasterCard, American Express and others PPIs: PayTM, Amazon Pay, Aircel Smart Money, Ola Money Wallet, Mobikwik Wallet, PhonePe and others 




By 1 January 2021, a system has to be put in place for failed transactions.  Characteristics of the system The system has to be transparent, rule-based, system-driven, user-friendly and unbiased with minimal manual intervention. The system should cover all transaction types where a payment could fail. 


Next Steps


Webnyay has already built a system that complies with RBI's standards, guidelines and requirements. Webnyay's platform has been successfully used for the resolution of disputes and consumer complaints in the financial sector. Webnyay's platform uses automation technology that requires minimal manual intervention and is completely secure and seamless. PSOs and PPIs can integrate Webnyay's technology using APIs in a manner that data will never leave their servers and disputes can be resolved in a quick, efficient and inexpensive manner. For disputes that require manual intervention, Webnyay works with experienced ADR professionals (who are familiar with online dispute resolution). These include senior advocates, former ombudsman, former high court judges and consumer court judges, domain experts and experienced legal practitioners. For a confidential discussion about the Directive or about Webnyay, please reach out to us today at admin@webnyay.in and visit www.webnyay.in. For media inquiries, please reach out to us through LinkedIn or at admin@webnyay.