Reserve Bank of India Fines Visa for Unapproved Payment Authentication
The Reserve Bank of India (RBI) said Friday (July 26) that it fined Visa Worldwide Pte. Limited for its use of an unapproved payment authentication solution. “It was observed that the entity had implemented a payment authentication solution without regulatory clearance from RBI,” the central bank and regulatory body said in a Friday press release. […]
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The Reserve Bank of India (RBI) said Friday (July 26) that it fined Visa Worldwide Pte. Limited for its use of an unapproved payment authentication solution.
“It was observed that the entity had implemented a payment authentication solution without regulatory clearance from RBI,” the central bank and regulatory body said in a Friday press release.
The fine amounted to 24.1 million rupees (about $288,000), according to the release.
Visa did not immediately reply to PYMNTS’ request for comment.
The RBI did not provide details on the transgression, Reuters reported Friday.
The report added that the regulator has been tightening its scrutiny of the processes followed by FinTech companies.
In an earlier, separate move, the RBI said in March that it wants Indian banks to stop forging exclusive arrangements with credit card networks, adding that it had concluded that some of those partnerships do not offer consumers appropriate choice.
The RBI said banks must now give customers the option to choose from multiple card networks when issuing a new card. Existing cardholders can choose their networks at renewal. This rule will not affect card issuers with less than 1 million active cards or issuers that have their own authorized card networks.
A spokesperson for Mastercard told PYMNTS at the time that the company supports the RBI’s “efforts at enhancing choice for cardholders.”
In February, it was reported that Visa and Mastercard paused intermediated commercial card payments in India following an order by the RBI.
The RBI directed the firms to halt domestic transactions for business payment solution providers (BPSPs).
“Visa received a communication from the RBI on February 8, in what appears to be an industry-wide request for information on the role of business payment solution providers (BPSPs) in commercial and business payments,” a Visa India spokesperson told Reuters at the time.
In May, digital financial services provider PayU said it received in-principle authorization from the RBI to operate as a payments aggregator, meaning it could start onboarding new merchants to its platform.
PayU Payments offers digital payment solutions for the Indian market and aims to serve eCommerce brands, banks and consumers.
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