After the Reserve Bank of India (RBI) asked card payment gateways like Mastercard and Visa to halt card-based commercial payments made by companies and small entities, the card networks have halted transactions at non-KYC-ed merchants, according to an Economic Times report.
The report, citing industry sources, said transactions being done at other business outlets who might not be authorised to accept card payments have been temporarily halted.
The flow of money towards non-KYC-ed merchants, who are not authorised to accept card payments as merchants, might have led the regulator to take the step. However, the exact reason is not known, according to the report.
“An instruction has come to the fintechs which operate in this sector to pause business payments made by commercial cards until further notice,” the report quoted a founder of a fintech startup, who has received the notice, as saying this.
According to the ET report, Ajay Adiseshann, CEO of Paymate, a major player in the business payments space which is backed by Visa, said, “I am given to understand that the instruction has come from the regulator to card networks, who in turn have informed the industry, we have paused as of now, following guidelines, but we have made some alternate arrangements which will also be compliant in nature to ensure that business payments as a whole are not disrupted.”
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