Delhi High Court Intervenes in PayU, Banks and Visa Dispute

The Delhi High Court has stepped into a contentious dispute involving payments processor PayU, multiple banks, and international card network Visa, asking the Reserve Bank of India to facilitate a resolution. The conflict centres on merchant classification codes and the levying of interchange fees, issues that have stalled negotiations between the parties.

In its directive, the court instructed the RBI to nominate a senior officer to mediate talks aimed at breaking the deadlock. The central bank's nominee will oversee discussions between PayU, the banking partners, and Visa to reach an agreement on the classification standards and fee structures that have been the subject of disagreement.

The 30-day timeline set by the court underscores the urgency with which the judiciary views the matter, which affects the broader payments ecosystem in India. Merchant classification codes determine the category under which a business operates and directly influence the interchange fees charged on transactions, making the dispute significant for both merchant operations and banking sector revenues.

The RBI's involvement signals judicial confidence in the central bank's regulatory authority and expertise in managing disputes within the payments industry. The outcome of this mediation could have implications for how merchant codes are classified across the Indian payments landscape and how fees are structured between various stakeholders.