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RBI Directs Card Networks to Halt BPSP Transactions

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Questions and Answers

What action has the Reserve Bank of India (RBI) recently directed Visa and Mastercard to take?

Stop enabling commercial transactions by Business Payment Solution Providers (BPSPs) (correct)
Expand commercial transactions with BPSPs
Offer discounts to BPSPs
Promote BPSP transactions

Why did the RBI ask Visa and Mastercard to halt transactions with BPSPs?

To encourage more transactions through BPSPs
Due to violation of the Payment and Settlement Systems Act, 2007 (correct)
To reduce the use of virtual credit cards
As a reward for BPSP's compliance

How do Business Payment Solution Providers (BPSPs) facilitate business-to-business payments?

By allowing corporates to pay suppliers using virtual credit cards (correct)
By providing personal loans to businesses
By investing in stock markets on behalf of businesses
By offering free credit card services to individuals

What mechanism do BPSPs provide for businesses to accept card payments?

Online platform for managing payments (A) Signup and view all the answers

How do BPSPs enable businesses to make payments to smaller suppliers?

By allowing payments through RTGS and NEFT transfers (C) Signup and view all the answers

What is one of the main concerns of the Reserve Bank of India regarding BPSPs?

Inability to track the end utilization of funds (C) Signup and view all the answers

How are specialized BPSP providers like EnKash and Kodo impacted by the recent directions from RBI?

They must stop providing virtual commercial card payment services (B) Signup and view all the answers

What is the utility of BPSPs for businesses as mentioned in the text?

Facilitating urgent B2B payments without credit card acceptance infrastructure (A) Signup and view all the answers

How do commercial cards differ from BPSPs in the context of B2B payments?

Commercial cards streamline B2B payments, while BPSPs manage cash flows (C) Signup and view all the answers

What triggered the RBI's regulatory scrutiny over BPSPs according to the text?

Specific instances of dubious practices like unregistered merchants (C) Signup and view all the answers

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