- The Reserve Bank of India (RBI) instructs Visa and Mastercard to suspend card-based commercial transactions amid mounting concerns over Know Your Customer (KYC) compliance.
- The directive follows recent regulatory actions against Paytm Payments Bank, indicating a broader crackdown on non-compliance within the payments sector. Fintech firms and businesses relying on commercial card payments face uncertainties over transactions.
- Visa confirms receipt of the regulatory communication, emphasizing ongoing discussions with the RBI and ecosystem partners to ensure compliance with regulatory norms regarding Business Payment Solution Providers (BPSPs).
The RBI’s directive to Visa and Mastercard to halt commercial card payments highlights the regulatory body’s heightened scrutiny over KYC compliance within the payments sector. This move follows recent actions against Paytm Payments Bank and underscores the RBI’s commitment to enforcing regulatory standards across the industry. However, the directive has raised concerns among fintech firms and businesses relying on commercial card transactions, with uncertainties looming over the impact on various payment categories, including rental and tuition fee payments.
Visa’s acknowledgment of the directive underscores the collaborative efforts between regulatory authorities and industry stakeholders to address compliance challenges. However, clarity on the matter remains essential for fintech entities and businesses navigating the evolving regulatory landscape. As discussions continue between Visa, Mastercard, and the RBI, industry players await further instructions and guidance to ensure seamless compliance with regulatory requirements.
