Another significant decision has been made by the RBI following its action against Paytm Payment Bank. The Visa and MasterCard networks have been requested by the RBI to cease accepting card payments for business purposes from small businesses. The story that was released in the Economic Times claims that other business venues have also temporarily halted their transactions. However, accurate information about the Central Bank’s reasoning for taking this action has not been made public.
Order to cease using commercial cards for business payments
The RBI is thought to have taken this measure because it is concerned about transactions carried out by small business owners who do not adhere to KYC regulations. Under the condition of anonymity, the founder of a fintech firm stated that fintech operating in this sector has been ordered to stop business payments made through commercial cards until further orders. He also said that after this step, rent and tuition payments may be affected.
Rent payment facilities are also offered.
Some fintechs will then need to consider stopping these kinds of transactions. Customers may pay their fares with cards thanks to apps like Cred, Paytm, and NoBroker. Businesses typically use RTGS or net banking to make bulk transfers from the RBI.
Except for fintech and card networks,
which have advanced the use of cards to pay business vendors. In this industry, card payments are not frequently used. Payment facilities are offered by fintech providers and vendors, such as Paymate and Enkash, with consideration for business requirements, such as payments.
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