NetBanking 2.0: The ecosystem of digital payments in India is constantly evolving. After the success of UPI, now there are preparations to improve the netbanking experience as well. Reserve Bank of India (RBI) Governor Sanjay Malhotra can launch this new netbanking switch at the Global Fintech Fest 2025 on October 7 to 9. This platform focuses on standardizing and simplifying netbanking payments for online merchants.
How will NetBanking 2.0 work?
Currently, payment aggregators like Razorpay, Cashfree Payments and BillDesk have to enter into separate partnerships with each bank. If a payment aggregator does not have a tie-up with a customer’s bank, it cannot make payments through netbanking. This creates problems for the customer. But, ‘Netbanking 2.0’ will work as a new switch, which will not be dependent on the existing payment system.
This will enable interoperability of netbanking transactions by bringing together multiple banks on a single platform. This will make it easier for online payment aggregators to integrate with banks. An official of a payment aggregator firm said, “We have to connect to the core banking systems of several banks to enable netbanking as a payment method. Now we will also have the option to connect to the new netbanking solution being developed by NBBL as a backup.”
This new system will reduce the delay in merchants receiving payments. According to a report by Business Standard in April 2024, the current system has problems such as lack of standardization, chargebacks and difficulties in settlement. It is expected that this new switch will overcome all these problems.
RBI had approved the interoperability of netbanking transactions in 2024 itself, with the aim of eliminating the delay in receiving payments by merchants. There are more than 50 online payment aggregators in the country and it is difficult for banks to do separate integration with so many players. This new system will solve this problem.
Who all are involved in this project?
This project is being operated by NPCI’s subsidiary NBBL. According to sources, many online payment aggregators including HDFC Bank, Axis Bank, State Bank of India (SBI) and AU Small Finance Bank are expected to go live with this new system next month. However, Axis Bank, AU Small Finance Bank and NBBL did not comment on this news, while HDFC Bank did not respond to the email. SBI could not be contacted immediately.