RBI's Lagged Credit Proposal Could Increase Digital Payment Costs
RBI's lagged credit proposal may raise costs, need switch changes
Business Standard
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The Reserve Bank of India (RBI) is considering a proposal for 'lagged credits' in digital payments, which may necessitate substantial changes at the switch level, particularly affecting the Unified Payments Interface (UPI). This could lead to increased transaction costs for banks and the UPI ecosystem.
- 01RBI's proposal focuses on 'lagged credits' for digital payments.
- 02Significant switch-level changes may be required, especially for UPI.
- 03Increased transaction costs could impact the UPI ecosystem and banks.
- 04Industry sources indicate potential financial implications for users.
- 05The proposal is still under consideration by the RBI.
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The Reserve Bank of India (RBI) is exploring a proposal to implement 'lagged credits' in digital payments, which may necessitate extensive modifications at the switch level, particularly for the Unified Payments Interface (UPI). Industry sources have indicated that these changes could significantly raise transaction costs for the UPI ecosystem and banks. As the RBI evaluates this proposal, the financial implications for consumers and businesses remain a concern, highlighting the need for careful consideration of any adjustments to the digital payments framework. The potential increase in costs could affect transaction fees and overall accessibility of digital payment services.
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Increased transaction costs could make digital payments less affordable for users, potentially discouraging the use of UPI services.
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