The Reserve Bank of India, after attempting to increase the reach of the banking ecosystem by allowing PCOs and grocery shops to offer banking services, has now framed new directions for all banks and some e-commerce and m-commerce providers under Section 18 of the Payment and Settlement Systems Act, 2007. The rules are aimed at increasing accountability and reducing delays in transferring money between the participants of the ecosystem - consumers, providers of e-commerce and m-commerce applications and services and the merchants who accept payment through online and mobile media. Download: RBI's Guidelines For Service Providers (pdf) Which Providers Are Affected? Those e-commerce an m-commerce providers that create a float and hold onto amounts deposited by the users for unknown periods of time before the next transaction are the ones targeted by RBI. The reason is that these funds can be used for overnight investments by the company. Those that perform real-time payments, and whose process for digital payments flow like a pipe directly from the consumer's bank account through their application or service and to the merchants without delays are excluded from the guidelines. Here's a list of Indian digital payment companies. The guidelines say, "all entities that collect monies received from customers for payment to merchants using any electronic/online payment mode, for goods and services availed by them and subsequently facilitate the transfer of these monies to the merchants in final settlement of the obligations of the paying customers." Pre-paid instrument providers and companies that create an independent…
