Visa did not say why the Reserve Bank of India has issued the directive.
| Photo Credit: Reuters
Visa said on February 14 that the Reserve Bank of India (RBI), which is also the country’s financial market regulator, had directed it last week to halt all domestic transactions for Business Payment Solution Providers (BPSPs).
BPSPs facilitate business-to-business card payments made to non-card-accepting vendors or suppliers. The RBI’s directive will not impact all commercial card payments but only those intermediated by BPSPs.
Visa, the world’s largest payments processor, did not say why the RBI has issued the directive. The Central bank did not immediately respond to a Reuters request for comment.
“Visa received a communication from the RBI on February 8, in what appears to be an industry-wide request for information on the role of BPSPs in commercial and business payments,” a Visa India spokesperson said.
The spokesperson said the company was in discussions with the RBI and its partners to ensure compliance. Indian fintech firm Enkash, which works in partnership with Visa to facilitate such transactions, declined to comment on the development.
Earlier in the day, Indian business daily Economic Times reported that the RBI asked leading card networks, including Visa and Mastercard, to halt such card payments. Mastercard, too, did not respond to a request for a comment.
