RBI Halts Unauthorised Commercial Card Payments
Now, Visa, Mastercard joined the race to stop business payments via commercial cards after RBI directions.
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In a surprising move, the Reserve Bank of India (RBI) has directed card networks such as Visa and Mastercard to halt card-based commercial payments made by corporations and small enterprises. Following this, the card networks have discontinued their services to all non-KYC-ed merchants and business outlets who might not be authorised to accept card payments until further notice.
Ankit Ratan, CEO & Co-founder at Signzy, said, “The RBI’s continuous focus on a strong compliance mechanism through a robust KYC solution in place implies that businesses need to adopt a compliance-first approach for sustainable growth. Recently, the RBI asked card networks like Visa and Mastercard to stop card based commercial payments made by corporations and small businesses. Such regulatory hurdles can be avoided by adhering to regulator’s rules and guidelines through innovative KYC solutions. It becomes imperative for financial institutions and fintech players to ensure that all financial transactions taking place are within the regulatory ambit and that no fraudulent or unauthorized transactions are occurring on the digital platform while maintaining the security posture.”
While the exact reason behind this directive is unclear, it is believed that the regulator is concerned about the flow of money through non-KYC-ed merchants who are not authorised to accept card payments.
