ENA Sectors 2024-02-16 14:39:49 <p><span style="font-size:14px"><strong>New Delhi, Feb 16 (KNN)</strong> The Reserve Bank of India (RBI) has issued a press release on Thursday, announcing the suspension of card-based business-to-business (B2B) payments facilitated by payment intermediaries. This action comes in response to violations of the Payment and Settlement Systems Act, 2007.</span></p> <p><span style="font-size:14px">Fintech start-ups such as EnKash and Paymate, among others, have received instructions from Visa, a leading card network, to discontinue offering business payment services through their commercial cards, reported ET.</span></p> <p><span style="font-size:14px">Although the central bank did not disclose the name, it highlighted that only one card network currently provides this service.</span></p> <p><span style="font-size:14px">Visa, a prominent player in the global card payment industry, confirmed this development. Visa enrols fintech companies for such services under its Business Payments Solution Provider (BPSP) program. The BPSP program facilitates B2B payments through card rails.</span></p> <p><span style="font-size:14px">The RBI explained that the intermediary involved in these transactions collects payments from corporates for commercial transactions and disburses funds to recipients unauthorized to accept card payments.</span></p> <p><span style="font-size:14px">Consequently, the regulator has directed these entities to cease providing this service.</span></p> <p><span style="font-size:14px">The RBI stated in the press release The intermediary in the above arrangement pooled a large amount of funds into an account which is not a designated account under PSS Act, .</span></p> <p><span style="font-size:14px">Furthermore, the regulatory body noted that this arrangement did not adhere to the requirements outlined in the master direction on KYC (Know Your Customer) issued by the RBI.</span></p> <p><span style="font-size:14px">Given the ongoing detailed examination of the matter, the RBI has instructed the card network to suspend all such arrangements until further notice.</span></p> <p><span style="font-size:14px">Importantly, the central bank clarified that it has not imposed any restrictions on the normal usage of business credit cards.</span></p> <p><span style="font-size:14px"><em><strong>(KNN Bureau)</strong></em></span></p> 36721 https://knnindia.co.in/news/newsdetails/sectors/rbi-red-flags-violations-in-card-based-b2b-payments 2024-02-16 14:39:49 knnindia.co.in