Online Dispute Resolution (ODR) System for Digital Payments

The Reserve Bank of India (RBI) on 6 August, 2020,introduced the  Online Dispute Resolution (ODR) system for resolving customer disputes and grievances pertaining to digital payments using a system-driven, rule-based mechanism with minimal or nil manual intervention.

RBI’s Payment System Vision-2021 highlights the need for technology-driven, rule-based, customer-friendly and transparent dispute redressal systems. Authorized Payment System Operators (PSOs) - banks and non-banks - and their participants have been advised by the RBI to put in place system/s for ODR for resolving disputes and grievances of customers.

An ODR system will have to be implemented by authorized PSOs for disputes and grievances related to failed transactions by January 1, 2021. Access to such a system will be provided by PSOs to their participating members aka Payment System Participants (PSPs). Any entity setting up a payment system in India thereafter or participating therein, shall make available the ODR system at the commencement of its operations. The ODR arrangement will later be extended to disputes and grievances other than those related to failed transactions. The customer can approach the respective ombudsman if the grievance remains unresolved or up to one month.

This directive has been issued by the RBI under Section 10 (2) read with Section 18 of the Payment and Settlement Systems Act, 2007 (Act 51 of 2007).

Dispute and grievance lodging and tracking

One or more channels will be provided to customers  which include web-based or paper-based complaint forms, IVRs, mobile applications, call centres, SMSes, through branches or offices, etc. - for lodging disputes and grievances.

Additionally in case of mobile phone-based systems such as Unified Payments Interface (UPI), third party app providers (TPAPs) will also provide customers with a facility to lodge disputes and grievances through the same mobile app for making payments which will be integrated with the ODR system. The dispute/grievance lodging process will be simple and will involve only the minimum necessary details. The ODR system will need to be made capable of automatically fetching the full details based on the information provided by the customer. Specific care will be taken about data confidentiality while designing such parameters.

A unique reference number will be allocated by the ODR system once the customer has lodged dispute/grievance. The customer will be provided the facility to track the status of the dispute or grievance using this reference number.