Plugging the gaps in the online transaction security, the National Payments Corporation of India (NPCI) has instructed all banks, payment service providers (PSPs), and third-party application providers (TPAPs) to implement the new online dispute resolution system by September 2022.
According to NPCI notification, the financial institutions that will not be able to complete the implementation of the new system post-September will be barred from onboarding of new customers.
The corporation has also asked all Unified Payments Interface (UPI) participants to make available international merchant payments through the platform before September, failing which the corporation will impose penalties. The NPCI has been working with offshore entities to promote acceptance of UPI by overseas merchants. Last year, UPI partnered with Liquid group in Singapore to enable UPI QR-based payments' acceptance in 10 markets across North Asia and Southeast Asia.
The NPCI had also informed market participants in India that integration of additional countries into the UPI network would be done by the corporation, and banks and payment companies should not do any additional certification or change in their systems.
The deadline for enabling international payments was December 31, 2021. However, many banks and payment companies have not yet implemented UPI global. “Final compliance timeline for all apps, issuers and PSPs shall be no later than September 30, 2022. In case a member or TPAP fails to comply within the timeline, the NPCI will take appropriate penal actions,” the corporation said in a circular.
In another circular, the NPCI has cracked the whip on implementing an online dispute resolution. In August 2020, the Reserve Bank of India (RBI) issued a circular asking all payment system operators and others in the payment chain to have an online dispute resolution system for digital payments. This was aimed at resolving failed transactions seamlessly without the account holder having to run around for a refund.
The corporation observed that many UPI participants have breached the mandated timeline and are yet to go live with the online resolution of disputes. They have been asked to ensure that credit and reversal processing is enabled as part of the implementation of the functionality.