RBI guidelines on Safe use of digital transactions.

RBI guidelines

Ever increasing online frauds have made a deep impact on people’s mind. Most of the older generation is now scared to perform online transactions, which is the irony, as we want to promote this culture. A lot of people are losing their money to these fraudsters as they continue to evolve their methods. With the intention of making digital payments safe RBI have stepped in and issued guidelines for payment aggregator and payment gateways through a notification dated 17 Mar 20. It is to promote safe digital transactions.

Guidelines by RBI

Refunds return to the original source of payment

Earlier shopping websites used to credit the refunds to their own e-wallet,, rather than sending that amount back to the bank from where the payment was made. This was a problem, as many customers wanted their money back to their account and also they would not be able to use that money anywhere else. Now RBI has informed payment aggregators to credit the refund amount back to the original source of payment, unless customer asks for credit to an alternate mode.

Customer grievances

RBI has asked payment aggregators to appoint a nodal officer to handle customer complaints and grievances. As per the notification, each payment aggregator must have a formal, publicly disclosed customer grievance redressal and dispute management framework, including a nodal officer to handle the customer complaints/grievances and the escalation matrix. If the complaint facility is made available on a website or mobile, it must be clearly and easily accessible.

ATM Pin verification discarded for online transactions

Currently, some payment aggregators request the ATM PIN for authentication of online payments. As per the RBI notification, aggregators like Razorpay, CC Avenue and so on, can no longer ask for the ATM PIN and all transactions above Rs 2,000 have to be verified via One Time Password (OTP). After this rule, a person’s ATM PIN will not be available online to the aggregator or payment gateway and is much safer.

Background checks of merchants

RBI has asked the Payment aggregators to make the background checks of merchants more stringent. This is  to make sure that merchants cannot cheat customers by selling fake/counterfeit/prohibited products. The website of the merchant must clearly mention the terms and conditions of the service and time-line for processing returns and refunds.

Through this new rule, RBI is trying to reduce the chances of fraud which take place in the name of reputed websites by asking payment aggregators to ensure that money debited from the customer’s account is actually being credited to the merchant’s account.

While making payments, customers must be informed on how long it takes to receive the money in  case of a refund.

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