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RBI Cracks Down on Fintechs for Merchant Misclassification

RBI Cracks Down on Fintechs for Merchant Misclassification:

The Reserve Bank of India is intensifying its crackdown on fintechs misclassifying retail merchants as utility merchants to exploit lower credit card interchange fees. This loophole impacts over ₹5,000 crore in transactions every month — and the clock is ticking.

Many payment aggregators reportedly shifted retail merchants into the utility category, which attracts significantly lower interchange rates. This practice allegedly allowed firms to pocket the difference between merchant charges and what issuing banks received.

⚠️ In response, major card networks like Mastercard and RuPay have already increased interchange rates for utility merchants from 0.85% to 1.85%, with Visa expected to follow suit soon. This swift change closes the gap, leaving little room for non-compliance.

With 53 payment aggregators registered with the RBI, regulatory oversight is stronger than ever. If your organization hasn’t audited merchant categorization yet, you risk severe penalties, regulatory action, and reputational damage.

Now is the time to thoroughly review your merchant onboarding processes and strengthen compliance controls to safeguard your business.

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iPhone ke saath Amazon Prime 1 month 2rs trial wala order kiya tha az icici cc se, ab 5% reward mila hai transaction history me show ho raha hai.
But 1%+gst utility fee laga diya icici walon ne.
Ab bol raha hai utility category me trnx hua hai kuch nahi ho sakta charges ka.
Complaint ke liye call kiya aur executive ko bola ki 5% cb to sirf shopping category me milta hai but isme 5% cb vi mila aur utility charges vi laga diya to bol raha cashback deduction ke liye update kar deta hun.🤢
 

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iPhone ke saath Amazon Prime 1 month 2rs trial wala order kiya tha az icici cc se, ab 5% reward mila hai transaction history me show ho raha hai.
But 1%+gst utility fee laga diya icici walon ne.
Ab bol raha hai utility category me trnx hua hai kuch nahi ho sakta charges ka.
Complaint ke liye call kiya aur executive ko bola ki 5% cb to sirf shopping category me milta hai but isme 5% cb vi mila aur utility charges vi laga diya to bol raha cashback deduction ke liye update kar deta hun.🤢
All such cases should go to RBI. File complaint against both ICICI and Scamazon
 
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