Consumer Protection and Payment Wallets: A Case for Tech Based Intervention

Reports by Corporate & Financial Law · March 10, 2019
Author(s): Shehnaz Ahmed, Param Pandya and Debanshu Mukherjee

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.

Click here to download the full report – ‘Consumer Protection and Payment Wallets’

About Shehnaz Ahmed:

Shehnaz is a Senior Resident Fellow with the Corporate Law and Financial Regulation vertical. Her areas of interest include the intersection of law and digital economy and business and human rights. At Vidhi, she has worked with various Ministries/Departments and a multilateral institution on various projects involving research and drafting support on areas diverse areas including financial resolution, digital economy (including payment systems law), business and human rights and competition law. Shehnaz graduated from RML National Law University in 2011. She has authored independent projects on tech-based interventions for regulating payment wallets, blueprint of a National Health Insurance Law and reforms for competition law. Prior to joining Vidhi, she headed a law firm (Zeta Law Chambers) co-founded by her, the Financial Regulatory Practice at Cyril Amarchand Mangaldas, Mumbai and the Dispute Resolution team at J. Sagar Associates. She has written for publications such as Oxford Business Law Blog, Financial Express, Firstpost and Business Standard.

About Param Pandya:

Param is a Research Fellow in the Corporate Law and Financial Regulation vertical. Prior to joining Vidhi, he worked in the General Corporate team at Cyril Amarchand Mangaldas, Mumbai (CAM), a leading law firm. His areas of interest include banking and corporate governance. He graduated with a B.Com. (LL.B.) (Hons.) from the Gujarat National Law University, Gandhinagar in 2015.

About Debanshu Mukherjee:

Debanshu is part of the founding team at Vidhi and leads its Corporate Law and Financial Regulation vertical. He graduated from the Hidayatullah National Law University and completed his graduate studies at Harvard University and the University of Oxford. He attended Harvard Law School as a Fulbright- Nehru Fellow where he was awarded the Irving Oberman Memorial Writing Prize in Bankruptcy and the Dean's Scholar Prize in Corporations. He has advised the Ministry of Finance, the Ministry of Corporate Affairs, the RBI and the IBBI on projects relating to bankruptcy, corporate law, and financial regulation. He was previously a lawyer with AZB & Partners. Link to full bio