RBI to introduce ‘Interoperable payment system’ for quick fund settlements: Shaktikanta Das

To enable quicker settlements of funds to merchants, Reserve Bank of India (RBI) Governor Shaktikanta Das on Monday announced the introduction of an ‘interoperable payment system’ for Internet banking, which is likely to be launched during the current calendar year.

Interoperability has the capability of various digital systems, applications, and databases to link and exchange information. Payment platforms utilise financial technology to facilitate connectivity and data sharing among ecosystem participants such as banks, payment gateways, processors, merchants, and consumers.

“We have given approval for implementing such an interoperable system to NPCI Bharat BillPay Ltd (NBBL). The new system will facilitate quicker settlement of funds for merchants,” RBI Chief Shanktikanta Das said at the Digital Payments Awareness Week celebrations.

In our Payments Vision 2025, we had envisaged an interoperable payment system for Internet banking transactions, he added.

The rise of UPI payments 

The introduction of an interoperable payment system is aimed at boosting user confidence in digital payments.

As a regulator, we are committed to playing our part in India’s journey in digital payments. I urge all stakeholders like the industry, media, digital payment users, payment system operators, and others to take up the responsibility of fulfilling the mission of ‘Har Payment Digital’. It is a mission not just for the Reserve Bank but for the entire country, Das further added.

Notably, Unified Payments Interface (UPI) transactions rose from 92 crore in FY 2017-18 to 8,375 crore in FY 2022-23 at a Compound Annual Growth Rate (CAGR) of 147% in terms of volume, the Ministry of Finance mentioned in December 2023. 

Similarly, the value of UPI transactions rose from Rs 1 lakh crore in FY 2017-18 to Rs 139 lakh crore in FY 2022-23 at a CAGR of 168%. 

The ‘UPI’, has become the most talked about fast payment system not only in India but across the globe, Das said while applauding the flagship payment systems.

“It is the biggest contributor to the growth of digital payments in India. The share of UPI in digital payments has reached close to 80 percent in 2023,” Das said.

Stating the evolution of UPI payments, Das added that user-friendly interface and facilitating QR code-based payments, the UPI has also added advanced services such as offline payments through near field communication (NFC) technology (UPI Lite X), payments through feature phones (UPI 123Pay) and AI-based conversational payments (hello! UPI), he said.