According to two persons familiar with the subject, India’s central bank has requested that Visa and Mastercard suspend card-based business-to-business payments such as rentals or money transfers to suppliers routed through third-party fintech businesses.
The central bank has not explained why it has imposed these limits, according to the sources, and the impact will only apply to commercial payments routed through third parties, not all corporate card payments.
In India, a group of fintech companies known as “business payment solution providers” (BPSPs) enable payments to businesses who do not take credit cards in exchange for a fee.
According to one of the individuals, just a tiny percentage of payments handled through fintech businesses would be impacted.
According to insiders, the central bank has temporarily requested Visa and Mastercard to halt such transactions.
The source stated that regular payments made to firms using corporate cards will not be affected.
“Visa received a communication from the RBI on February 8, in what appears to be an industry-wide request for information on the role of business payment solution providers (BPSPs) in commercial and business payments,” said a spokeswoman for Visa India.
“That communication included direction that we hold all BPSP transactions in abeyance,” the company stated in a statement.
