RBI Proposes 1-Hour Delay for Digital Payments Over ₹10,000 to Combat Fraud

The Reserve Bank of India is considering a significant new friction point for digital commerce, proposing a mandatory one-hour delay for processing all merchant transactions above ₹10,000. This move, detailed in a new discussion paper, is a direct response to the alarming rise in digital financial theft and authorised push payment (APP) scams. The delay is designed to act as a circuit breaker, disrupting the high-pressure tactics fraudsters use to manipulate victims and giving legitimate payers a critical window to cancel fraudulent transfers.

The proposed rule would apply to payments made via UPI, cards, and net banking, creating a uniform cooling-off period for high-value digital merchant payments. The RBI has specifically exempted recurring e-mandates and cheque payments from this delay, indicating a targeted approach to curb the most common real-time fraud vectors. The discussion paper, titled 'Exploring safeguards in digital payments to curb frauds', is open for stakeholder feedback until May 8, 2024.

If implemented, this policy would represent a major shift in India's digital payment landscape, introducing a trade-off between security and instant convenience. The measure places significant operational pressure on banks, payment gateways, and e-commerce platforms, which would need to adapt their systems to manage this delayed settlement process. For consumers and businesses, it introduces a new layer of planning for high-value purchases, potentially slowing transaction velocity in key sectors like retail, travel, and B2B services while aiming to drastically reduce fraud losses.