RBI: Payment gateway firms split on RBI intervention

The Economics Times
February 13, 2019

Pratik Bhakta

Bengaluru: The Reserve Bank of India’s intention to regulate payment gateway service providers has received a mixed response from industry players, with some welcoming the move and others cautioning that close regulatory scrutiny may cause operational challenges and stifle innovation. The central bank had announced last week that it will release a white paper for discussion and consult companies before introducing regulations.

Vishwas Patel, founder of CCAvenue Payment gateway, believes the sector doesn’t need more regulations as it already has all the safety networks in place to ensure customer money is protected.

“There is a fully functional nodal bank account system as mandated by the Reserve Bank of India (RBI); also all gateway entities are PCIDSS certified ensuring security. What more will the regulator do with the fresh guidelines,” he told ET. Patel is also the chairman of industry body Payments Council of India (PCI), but clarified that his remarks were in his personal capacity.

The industry body will take up the matter and organise response to the regulator only after the white paper is released, officials said. A section of the industry believes that regulatory scrutiny will be good. Anand Ramachandran, chief financial officer at Ingenico ePayments India, had told ET after the policy statement was released that it was necessary to evolve some sort of regulatory mechanism to ensure serious players with sound financial track record are doing business in this space.

Another top payment executive said the move could help bring payment gateways in direct contact with the RBI. “Till date, all the interactions with the regulator regarding payments has been through banks,” he said on condition of anonymity. “If regulated, the sector will get a direct seat at the table with the RBI, which will be better.” A few executives in the payments industry said they were not sure as to what direction the regulator could be moving in with the new rules.

“I am not very sure what direction the RBI is planning to take,” said Dewang Nerala, chief executive at Atom Technologies that deploys point-of-sales terminals for banks. “The nodal bank account system, I thought, was enough to ensure that customer money is safe.” Nerala also heads the merchant acquirers’ committee within PCI.

Reference:-  https://economictimes.indiatimes.com/industry/banking/finance/banking/payment-gateway-firms-split-on-rbi-intervention/articleshow/67968891.cms?from=mdr

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