Lazypay News: LazyPay Updates Terms in Order of RBI

LazyPay, credit division PayU Indiaupdated its terms and conditions in accordance with the recent directive Reserve Bank of India (RBI), which banned prepaid payment instruments (PPI) from loading credit lines.

buy now pay later (BNPL) asked customers in a message on Thursday to accept the terms, otherwise all transactions will be blocked through LazyPay products.

“In accordance with the latest regulations, we need to block your transactions across all LazyPay products from today. To continue using LazyPay, please accept the updated Terms now,” the company said in a message to customers. ET reviewed the copy of the message.

ET was the first to report
LazyPay plans to update its terms and conditions June 23rd.

On June 20, the central bank banned non-bank wallets and prepaid cards from uploading their credit lines to these platforms.

“PPI-MD (master referral) does not allow loading PPI from credit lines. This practice, if applied, should be stopped immediately,” the regulator said.

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The move caused disruptions among some digital lending companies, as well as card-based fintech companies. Since then, industry stakeholders have turned to RBI for advice.

ET reported on June 23 that
RBI message on PPI gets government backing and came after commercial lenders raised concerns about alleged rule-breaking by fintech companies.

Those concerns included loosening of know-your-customer (KYC) regulations and violations of anti-money laundering (AML) guidelines by fintech companies, ET reported, citing sources.

As a result of the RBI directive, several fintech companies such as Jupiter, EarlySalary and KreditBee have temporarily banned customers from making any transactions with their prepaid cards, ET reports, citing sources.

Due to regulatory uncertainty, banks like RBL are also backing out of their card co-branding agreements with fintech firms.

Earlier this week, Slice updated its terms and conditions, saying it would charge customers a 36% interest rate for repaying a loan in more than one installment. This was a big change from the “Pay-in-3” redemption concept that was shared across cards.

ET
reported June 27 that the Payments Council of India (PCI) and several fintech companies have urged the government to intervene to address the impact of the recent RBI directive.

In its recommendations, the PCI stated that PPIs that are fully KYC compliant should be treated on a par with bank accounts and that they should be allowed to lend.

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