Anoushka Mehta

Anoushka Mehta is currently a penultimate year law student (B.A., LL.B) (Hons.) at Maharashtra National Law University Mumbai. She is a reviewer at Economic & Political Weekly and is also pursuing a Diploma in Advanced Contract Drafting, Negotiation and Dispute Resolution. She aims to write on legal issues alongside working in the area of corporate law.

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RBI paves the way for Online Dispute Resolution (ODR) for digital payments

The Central Bank released a circular on August 6, 2020, wherein PSOs and its participants are required to have an ODR system in place by January 1, 2021.

The Reserve Bank of India (RBI) on August 06, 2020, announced an Online Dispute Resolution (ODR) mechanism for digital payments. The central bank aims to increase the usage of digital payments in the country and hence this initiative comes under the ambit of Payment Vision-2021. The central bank observes that there is a need to establish a grievance redressal mechanism for addressing disputes arising in this digital payment process. “The authorised Payment System Operators (PSOs) shall implement an ODR system for disputes and grievances related to failed transactions in their respective payment systems by January 1, 2021" RBI stated. This mandate of the ODR system applies to all the PSOs, whether banking or non-banking and also to its participating members. Moreover, for an entity set up after January 1, 2021, it will be mandatory to have this ODR mechanism in place.

Structure of the ODR system:

1) Each PSO is required to have an ODR system for resolving disputes and grievances arising out of failed transactions and this PSO has to provide the participating PSPs access to the system.

2) The PSO and its Payment Service Provider (PSPs) shall provide the customers access to lodge the disputes and grievances relating to failed transactions, irrespective of such transactions being on-us or off-us in nature.

Lodging and tracking of disputes and grievances

1. 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.

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.

3. The process of lodging the dispute or grievance shall be simple and involve only necessary minimum details. The ODR system should be made capable of automatically fetching full details based on the information provided by the customer. The aspect of data confidentiality shall specifically be taken care of while designing such parameters.

4. Once a customer has lodged the dispute or grievance, a unique reference number shall be allocated by the ODR system. Facility shall be provided to the customers for tracking the status of the dispute or grievance using this reference number.

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