From being a heavily cash-based economy, India is witnessing a steady growth in digital payments. The growth of digital payments coupled with the emergence of FinTech companies necessitates a robust consumer protection framework. This is particularly relevant for vulnerable consumers such as low-income groups. Therefore, it is critical for policy makers to assess whether current regulatory/ supervisory approach for regulating the ever-evolving payments sector is adequate. Just as emerging technologies are enabling the evolution of FinTech, financial sector regulators in many jurisdictions are leveraging technological innovations to increase the efficiency of their supervisory approaches, particularly in automated data collection and data analytics.
Against this background, this Concept Paper explores the possibilities of integrating technological solutions in Reserve Bank of India’s (RBI’s) supervisory framework for prepaid payment instruments (PPIs) / payment wallets with a view to enable RBI to have real-time or near-real-time access to consumer complaints data of PPIs, which can then be further used for data analysis. Timely access to such consumer complaints data of PPIs can assist RBI in identifying potential risks and for discharging their consumer protection mandate efficiently.
While RBI has been proactive in taking steps to promote consumer protection in the digital payments industry, we hope that this Concept Paper will help in sharpening such interventions further.