The Reserve Bank of India (RBI) on Friday mandated that banks cannot charge savings bank account customers for online transactions through the National Electronic Funds Transfer (NEFT) system with effect from January 2020.
Titled ‘Furthering Digital Payments’, the note by the central bank said that digital payments constituted 96% of non-cash retail payments from October 2018 to September 2019. UPI saw a growth of 263% with 874 crore transactions during the period, while NEFT transactions saw a year on year growth of 20%.
The note also indicates the formation of a committee to look into plurality of QR codes being used by multiple payment service providers and whether it might be beneficial to merge them for the convenience of users.
Interoperability of QR codes will require wallet based closed QR code providers such as Paytm, PhonePe, Mobikwik and others to come on to a single platform. This will impact customer loyalty on the platforms.
Earlier this year, the National Payments Corporation of India had suggested that all merchants above a threshold should offer UPI payments using QR codes. NPCI operates BharatQR for payments using cards and UPI as well as a UPI based QR code networks.
The note also said that the Acceptance Development Fund (ADF) proposed by RBI in its vision document 2021 should be made operational by January 1, 2020. ADF will subsidise point-of-sale terminal acquirers for deployment at Tier 3 through Tier 6 cities. As part of this proposal, the acceptance infrastructure for digital payments will go up, translating to a rise in the numbers.
RBI has also opened up linking of all prepaid instrument and payment systems with National Electronic Toll Collection (NETC) FASTag, which will be used for interoperability in payment for parking, fuel and other expenses.