RBI to e-tailers: Clear payment of merchants within two days

RBI
Image Credit: Livemint

Rajesh Om is an online vendor who sells electronic items at all the major e-commerce platforms – Flipkart, Amazon and Paytm. His annual turnover from the sale at these platforms clocks around Rs 1.2 crore.

But, recently, he has been facing payment issue with these online sellers.

He says the payment has been held by marketplaces for an indefinite period due to various reasons, which is a serious issue for a seller.

Om is not the only seller, who is facing the payment issue, but there are many other players as well.

In August, the All India Online Vendors Association (AOVA) had raised a complain to the central bank alleging late payments by e-commerce companies such as Flipkart, Amazon and Paytm.

The association complained that the remittances took more than T+15 days and that the money was not being kept in escrow accounts.  

The Reserve Bank of India has now taken a cognizance of this issue and has reminded online marketplace to adhere to its 2009 guidelines on settlement of payments for electronic payment transactions involving intermediaries.

The guidelines state that settlements must be made in two-three days from the day of intimation of the completion of transaction as agreed upon by both parties (referred to in the industry as T+2, T+3).

In its response to the association last week, the RBI said: “All payments to merchants which do not involve the transfer of funds to nodal banks shall be effected within a maximum of T+2 settlement cycle”, while payments to merchants “involving nodal banks shall be effected within a maximum of T+3 settlement cycle”.

The RBI had in response to a query under the Right to Information Act in August identified platforms such as Flipkart and Amazon as intermediaries which come under the purview of the guidelines.

Flipkart and Amazon, however, rebutted the allegation of the association and said they adhered to the guidelines.

According to Flipkart, payments are done based on dispatch and payouts are done in seven to 15 days after dispatch depending on which tier the seller is categorised under.

Amazon said it follows the RBI guidelines of T+3 settlement cycles for all sellers.

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