RBI releases ‘Vision 2021’ for e-payment system

Context: The Reserve Bank of India (RBI) has released ‘Payment and Settlement Systems in India: Vision 2019 – 2021’, a vision document for safe, secure, quick and affordable e-payment system.

The core theme of the vision document is ‘Empowering Exceptional (E)payment Experience’, that stresses on empowering every Indian to access a bunch of e-payment options safely and conveniently.

Highlights of Payment Systems Vision 2021:

• It has 36 specific action points and 12 specific outcomes.
• The main agenda of the vision document is the ‘no-compromise’ approach towards safety and security of payment systems.
• It outlined the measures that the central bank will undertake to foster innovation, cybersecurity, financial inclusion, customer protection, and competition.

The vision document aims to achieve “a ‘highly digital’ and ‘cash-lite’ society through Goal Posts (4Cs):

1. Competition
2. Cost effectiveness
3. Convenience
4. Confidence

Key focus areas:

1. Boosting customer experience with robust grievance redressal
2. Empowering e-payment service providers
3. Enabling eco-system and infrastructure for the e-payment system
4. Putting down forward-looking regulations
5. Undertaking Risk-focused Supervision

Need:

• The RBI has highlighted the need for a self-regulatory organisation for the digital payment space, which can serve as a two-way communication channel between the players and the regulator.
• The number of digital transactions is expected to increase more than four times, from 20.69 billion in December 2018 to 87.07 billion in December 2021.
• The digital payment transaction turnover vis-à-vis gross domestic product (at current market prices) is expected to further increase to 10.37 per cent in 2019, 12.29 per cent in 2020, and 14.80 per cent in 2021.

Way ahead:

The RBI will implement the approach highlighted in the Vision document during the period 2019 – 2021. RBI’s efforts will focus towards facilitating the operation of efficient and price-attractive payment systems. However, there will be minimal intervention of the RBI in fixing charges for customers to avail of digital payments.

Sources: The Hindu.