RBI releases guidelines for ‘Online Dispute Resolution (ODR) System for Digital Payments’

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             There are a variety of reasons for disputes in Digital Payments. The reasons could range from failed transactions to credits to wrong accounts.

            At times, participating institutions are at fault.

            At times, the consumers are at fault. What will the bank if the customer transfers money to a wrong account? Erroneously customer keys in 2 instead of 1, and voila the amount travels to a wrong account!!

            At times, due to internet connectivity, the transactions go into ‘no man’s land’!

            As volumes of Digital Payments go up in our country, the associated disputes too are on the increase.

            Keeping in view of the growing demand for a latest Dispute Resolution Tools to be deployed in Digital Payments, RBI Vide Cir No RBI/2020-21/21 DPSS.CO.PD No.116/02.12.004/2020-21 dt. August 6, 2020 addressed to ‘The Chairman / Managing Director / Chief Executive Officer’, of “Authorised Payment System Operators and Participants (Banks and Non-banks)’, released the Guidelines for ‘Online Dispute Resolution (ODR) System for Digital Payments’.

 

The guidelines are in line with The Payment System Vision-2021 of Reserve Bank of India.

The Vision 2020 highlights the need for technology-driven, rule-based, customer-friendly and transparent dispute redressal systems.

As a step in this direction, authorised Payment System Operators (PSOs) – banks and non-banks – and their participants are hereby advised to put in place system/s for ODR for resolving disputes and grievances of customers.

To begin with, authorised PSOs shall be required to implement an ODR system for disputes and grievances related to failed transactions in their respective payment systems by January 1, 2021.

The PSOs shall provide access to such a system to its participating members i.e., Payment System Participants (PSPs).

            As the dispute related data starts to build up, the ODR arrangement would later be extended to cover disputes and grievances other than those related to failed transactions.

Please note that if the grievance remains unresolved up to one month, the customer may approach the respective ombudsman.

 

1. Applicability - 1.1. These requirements apply to all authorised Payment Systems Operators (PSOs) – banks and non-banks – and their participating members [Payment System Participants (PSPs)].

 

2. Concept of the ODR system - The ODR system should be a transparent, rule-based, system-driven, user-friendly and unbiased mechanism for resolving customer disputes and grievances, with zero or minimal manual intervention.

 

3.2. The PSO and its PSPs shall provide the customers an access for lodging the disputes and grievances relating to failed transactions, irrespective of such transactions being on-us or off-us in nature.

 

4. Types of transactions covered under the scope of the ODR system - To begin with, disputes and grievances relating to failed transactions shall be covered under the ODR system. The scope, thus, includes all transaction types mentioned in the RBI circular DPSS.CO.PD No.629/02.01.014/2019-20 dated September 20, 2019 on “Harmonisation of Turn Around Time (TAT) and customer compensation for failed transactions using authorised Payment Systems”.

5. Lodging and tracking of disputes and grievances - Customers shall be provided with one or more channels – web-based or paper-based complaint form, IVR, mobile application, call centre, SMS, through branches or offices, etc. – for lodging disputes and grievances.

As mentioned above, such facility shall be provided by the PSO as well as by the PSP (the issuer institutions with whom the customer has a relationship) with a mechanism to link / access the ODR system put in place by the PSO. The industry may progressively increase the variety of these channels.

5.2. In addition to the above channels, in case of mobile phone-based systems like Unified Payments Interface (UPI), third party app providers (TPAPs) shall also provide customers with a facility to lodge disputes and grievances through the same mobile app used for making payments, which shall be integrated with the ODR system.

The above point is important as it covers UPI transactions via TPAPs. UPI is the ‘Channel’, for digital payments in our country.

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