The Reserve Bank of India (RBI) on February 15, 2024, issued a notification regarding the Payment Intermediary by Card Network – Restraining of Unauthorized Payment System
The following has been stated namely: -
• It states that the Card Network had an arrangement that enables businesses to make card payments through certain intermediaries, to entities that do not accept card payments.
• It states that Under this arrangement, the intermediary accepts card payments from corporates for their commercial payments and then remits the funds via IMPS/RTGS/NEFT to non-card-accepting recipients.
• The arrangement has raised the following concerns:
(i) The intermediary in the above arrangement pooled a large amount of funds into an account that is not a designated account under the PSS Act.
(ii) Transactions processed under this arrangement did not comply with the originator and beneficiary information requirements, as stipulated under Master Direction on KYC issued by the Reserve Bank.
• It further states that the Card Network has been advised to keep all such arrangements under abeyance, till further orders.
• It is also clarified that the Reserve Bank has not placed any restriction with respect to normal usage of business credit cards.
[Press Release: 2023-2024/1885]
