Failed Transaction? Online dispute resolution for digital payments soon

Transaction Failed but Amount Debited: The use of digital modes for making payments has increased. And, as the number of digital transactions rise significantly, there is a concomitant increase in the number of disputes and grievances. One could face a failed transaction or have any other grievance while using digital modes of payment such as net banking, e-wallets etc.

The Reserve Bank of India (RBI) has called for Payment System Operators (PSOs) to introduce Online Dispute Resolution (ODR) Systems in a phased manner. To begin with, authorised PSOs shall be required to implement ODR systems for failed transactions in their respective Payment Systems.

The RBI has announced the introduction of Online Dispute Resolution (ODR) system for resolving customer disputes and grievances pertaining to digital payments, using a system-driven and rule-based mechanism with zero or minimal manual intervention.

As a step in this direction, authorised Payment System Operators (PSOs) – banks and non-banks – and their participants are hereby advised to put in place system/s for ODR for resolving disputes and grievances of customers.

To begin with, authorised PSOs shall be required to implement an ODR system for disputes and grievances related to failed transactions in their respective payment systems by January 1, 2021.

If the grievance remains unresolved up to one month, the customer may approach the respective ombudsman.

The Reserve Bank of India already has the Ombudsman Scheme for Digital Transactions, 2019 in place. It is an expeditious and cost-free apex level mechanism for resolution of complaints regarding digital transactions undertaken by customers of the System Participants.

For redressal of grievance, the complainant must first approach the System Participant concerned. If the System Participant does not reply within a period of one month after receipt of the complaint or rejects the complaint, or if the complainant is not satisfied with the reply given, the complainant can file the complaint with the Ombudsman for Digital Transactions within whose jurisdiction the branch or office of the System Participant complained against, is located.

ODR mechanism is expected to resolve the grievances much quicker than before. Based on the experience gained, ODR arrangements will be extended to other types of disputes and grievances.


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