The Reserve Bank of India's (RBI) new rules for card payments will lead to a major shift in the payments industry, and provide a major boost to the Unified Payments Interface (UPI) and Bharat Bill Payments System (BBPS). With banks and payment gateways/aggregators implementing new infrastructure to support online and recurring card payments over the coming months, the RBI has indirectly pushed consumers and merchants to use UPI or BBPS for use-cases currently supported by cards, industry experts told MediaNama. UPI has already overtaken the market share of debit cards for the consumption economy, with around Rs 83,076.25 crore in merchant payments of the Rs 5.04 lakh crore UPI transactions. This is higher than the Rs 56,838 crore worth of debit card transactions either online or at Point-of-Sale devices in the same month, as per RBI data. The new rules will add friction to the payment experience for customers, require mountains of re-engineering for many payment aggregators and gateways and their merchants, and it could even threaten the business models of many startups, say experts. While the payments industry and merchant firms have approached the RBI to reverse its decision, the central bank has not budged. It has, however, extended the deadline to comply with the new card storage rules, under the Guidelines on Regulation of Payment Aggregators and Payment Gateways, to December 31, 2021 from July this year. At the same time, it extended the timeline for compliance with its new framework for creating e-mandates and processing recurring transactions…
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