Online frauds are rising each day as the number of people using digital transactions is on the rise. A lot of people lose their hard-earned money to tricks played by fraudsters. With the intention of making digital payments safe, the Reserve Bank of India (RBI) has issued a set of rules for payment aggregators and payment gateways. These guidelines have been issued through a notification on March 17, 2020. Through these guidelines, the risk of online payment fraud is reduced and customers' financial data kept safe.
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1. No option of verification via ATM PIN for online transactions
Currently, some payment aggregators request the ATM PIN for authentication of online payments. As per the RBI notification, aggregators like Razorpay, CC Avenue and so on, can no longer ask for the ATM PIN and all transactions above Rs 2,000 have to be verified via One Time Password (OTP). After this rule, a person's ATM PIN will not be available online to the aggregator or payment gateway and is much safer.
2. Refunds must be made to the original source of payment
Some online shopping portals credit refunds to customer’s e-wallets created by the company, instead of crediting to the bank account or credit card from where the payment was made. This has created problems for customers as they can use this money only for the transactions on a particular shopping portal and nowhere else.'
The RBI has informed all payment aggregators to credit the refund amount directly into the customer’s account, unless the customers ask for credit to an alternate mode.
3. Background checks of merchants
RBI has asked the Payment aggregators to make the background checks of merchants more stringent. This is to make sure that merchants cannot cheat customers by selling fake/counterfeit/prohibited products. The website of the merchant must clearly mention the terms and conditions of the service and time-line for processing returns and refunds.
Through this new rule, RBI is trying to reduce the chances of fraud which take place in the name of reputed websites by asking payment aggregators to ensure that money debited from the customer’s account is actually being credited to the merchant’s account.
While making payments, customers must be informed on how long it takes to receive the money in case of a refund.
4. Customer grievances
RBI has asked payment aggregators to appoint a nodal officer to handle customer complaints and grievances. As per the notification, each payment aggregator must have a formal, publicly disclosed customer grievance redressal and dispute management framework, including a nodal officer to handle the customer complaints/grievances and the escalation matrix. If the complaint facility is made available on a website or mobile, it must be clearly and easily accessible.
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