The Delhi High Court has directed the Reserve Bank of India (RBI) to mediate a dispute involving Prosus-backed fintech platform PayU Payments, YES Bank, ICICI Bank, other acquiring banks, and Visa regarding interchange reimbursement fee (IRF) claims. The court issued the order after four days of hearings and barred acquiring banks from deducting further amounts from PayU’s settlements while mediation is underway. The next hearing is scheduled for October 27, according to inc42.com.
The dispute centers on IRF claims raised by ICICI Bank before Visa against YES Bank and three other acquiring banks, alleging incorrect classification of merchant category codes (MCCs) assigned to certain merchants. MCCs are four-digit codes that identify a merchant’s principal business line and determine interchange fees payable between banks. PayU clarified in court that it does not assign MCCs. The court ordered the parties to maintain the status quo on claims arising from past transactions and restrained Visa from issuing final decisions on pending IRF claims during mediation.
This case highlights ongoing tensions in India’s payments ecosystem over fee structures and merchant classifications, which impact settlement flows among banks and payment platforms. Similar disputes have emerged globally as regulators and stakeholders seek clarity on interchange fees and transaction processing rules. The RBI’s involvement as a mediator underscores its role in overseeing the payments sector and resolving conflicts between financial institutions and fintech companies like PayU.
The Delhi High Court directed the RBI to appoint a senior officer familiar with the payments sector to facilitate resolution within 30 days. The court will revisit the matter on October 27, providing a timeline for potential settlement or further judicial intervention, as reported by inc42.com.