Interoperable payment system: The Reserve Bank of India (RBI) is anticipating the launch of an interoperable payment system for Internet banking in 2024 to facilitate faster fund settlements for merchants, announced Governor Shaktikanta Das on Monday.

The Governor revealed that approval has been granted for the implementation of such an interoperable system to NPCI Bharat BillPay Ltd (NBBL). He expressed expectations for the launch of this system within the current calendar year.

When customers make Internet banking transactions through Payment Aggregators (PAs), these transactions cannot be seamlessly processed across different PAs. Instead, each bank must individually integrate its systems with each PA that represents different online merchants. 

In other words, there is no standardisation or compatibility between the systems of different PAs, requiring banks to establish separate connections with each one to facilitate transactions for their customers. This lack of interoperability adds complexity and inefficiency to the Internet banking ecosystem.

Governor Das highlighted the challenges posed by the numerous payment aggregators, making it impractical for banks to integrate with each one separately. 

Additionally, the absence of a unified payment system and standardised rules for these transactions has resulted in delays in payments reaching merchants and increased settlement risks.

(With Reuters inputs)