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RBI sandbox’s first test to be on retail payments

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The first round of experiments under the Reserve Bank of India’s (RBI) much-anticipated regulatory sandbox would have retail payments as the operational theme, the central bank announced on Monday while seeking applications between November 15 and December 15 from participants. This first round of experimentation, which is likely to commence in the first half of 2020, would entail the regulators along with the shortlisted companies working toward creating 'frictionless' solutions in the field of feature phone, contactless and online-based payment services.

“The adoption of ‘Retail Payments’ as the theme is expected to spur innovation in the digital payments space and help in offering payment services to the unserved and underserved segment of the population,” the RBI said in a statement on Monday. “Migration to digital modes of making a payment can obviate some of the costs associated with a cash economy and can give customers a friction-free experience.” The live testing of new products or services in a controlled environment may require a bank or NBFC or other non-bank entities to form operational tie ups with each other for the requisite testing.

“In such cases, a suitable partner may be secured in advance to be eligible for admission to the regulatory sandbox,” the apex regulator said. Several companies are expected to send in their applications to be a part of the scheme as it would present them an opportunity to test services on a live audience with API stacks of major financial institutions in a proxy ecosystem, generating timely feedback from experts and regulators. As per industry experts, the sandbox is expected to improve collaborative projects between companies as the live testing would present them the opportunity to rectify several operational hurdles before the actual rollout of commercial services to a mass audience.




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