The last few years have seen an unprecedented rise in digital payment transactions via Payment Aggregators (“PA”), Payment Gateways (“PG”), and Unified Payments Interface (“UPI”), via third-party application providers (TPAPs), with PAs undergoing licensing by the Reserve Bank of India (“RBI”), under the March 17, 2020, RBI PA/PG Guidelines. Retail payments historically would flow via NEFT/ RTGS/ IMPS, etc. However, UPI has now become the preferred payment mode for online payments, constituting a significant volume of small ticket retail payments in India, which is mostly via PAs. The payment architecture, which was earlier ‘card network’ driven via entities licensed under the Payment and Settlement Systems Act, 2007 (as a ‘payment system operator’), is increasingly moving towards PA/PGs, including for digital asset exchanges, online shopping, check-out financing and digital lending (where significant changes have been implemented by the RBI recently, including via the September 2022 Digital Lending Guidelines).
Continue Reading FIG Paper (No. 18 – Series 1)- Technology/ Financial Services – Recent Law Enforcement Trends