Indian Government wants to promote the Digital payments ecosystem as it is an essential aspect of the Digital India & Digidhan programs. Digital payments transactions have steadily been increasing over the last few years. According to the MeitY data, total transaction volume has increased from 2,071 Crore in FY 2017-18 to 5,554 Crore in FY 2020-21. Continuing with this mission, the MeitY is inviting proposals for multiple projects, including one for a universal “Online Dispute Resolution System” for digital payments.
BHIM UPI transactions have also increased manifold. Recently, In July 2021, the UPI transaction value breached the 3Bn mark.
What is the Dispute resolution System all about?
There is no doubt that there has been an unprecedented growth in digital payments. The is still huge potential for further growth. This growth, however, comes with its own sets of challenges. One of the most important ones in need of urgent intervention is increasing cases of cyber fraud. A recent report suggested 59% of Indians suffered a cybercrime in the last 12 months. This dispute resolution will act as a Unified solution for grievance redressal and prevention of fraudulent digital payments.
The call for proposal talks about “taking active measures to ensure citizens and merchants are protected from risks such as loss of privacy, exposure to fraud, and unauthorized fees are the tenets of the responsible digital payments guidelines.”
The main aim of this resolution system is to allow users to report an issue through all the touchpoints. This includes a mobile app, net banking interface, ATM, Point of Sale (PoS), SMS, email, call-center, etc.
The proposal also acknowledges that payment trails are spread across multiple organizations and any effective action on fraudulent transactions will need proper coordination of all parties.
Further, the payment trails are spread across multiple organizations, and it is not
possible for any one of them to handle the customer complaints on their own. A
coordination mechanism is required, so that all the information related to a
complaint can be brought together.”
This dispute resolution system will be overarching the present dispute resolution system of different banks, NPCI, and RBI.
Previous initiatives regarding cyber fraud reporting
Earlier this year The Ministry of Home Affairs (MHA) and Delhi Police Cyber Cell launched the Citizen Financial Cyber Fraud Reporting System. Victims of cyber fraud can reach out to the reporting system through a helpline number, 155260.
The Pune City Police has also started two dedicated helpline numbers through which victims of cyber fraud can approach police in the ‘Golden Hours’ after the crime.
RBI, through the National Payments Corporation of India, has introduced ‘UPI Help’, which went live on the BHIM app.
Other identified areas
Apart from Universal Dispute Resolution System, the Ministry has identified other thrust areas as well. These are:
- End-to-End integration of digital payments in supply chains – Agriculture, Horticulture, and Handicrafts.
- Offline payment solutions for areas with limited network connectivity like North Est region (NER), J&K and Ladakh, aspirational districts, Tier III and below with pilot run.
- Digital payment solutions for feature phones
- Solutions encouraging Local Language apps in digital payment
- Digital payment solution helping co-operatives, women, self-help groups (SHGs), differently-abled groups.
- MSME Focused solutions helping them unlock their potential through digital payments.
Who can submit the project proposals? And how?
Government-owned organizations, R&D institutions, Academic Institutions, and Fintech organizations (incorporated in India) can submit proposals. The proposals should mention objectives, scope, milestones/timeline, outcome, and quantifiable deliverables with a specific time frame.
A soft copy of the proposal is essential and the interested entity needs to submit it by email to [email protected]. The last date for submitting the project proposals is 8th September 2021.