The Financial Action Task Force (FATF), a key global entity focused on combating money laundering and terrorist financing, is currently contemplating the introduction of new disclosure norms for cross-border online transactions, particularly involving credit cards, as informed by government officials to Business Today TV. These new standards could potentially involve the real-time tracking of transactions, a significant shift from the current requirement of disclosing only the cardholder's name and country of origin in credit card transactions. The implementation of these stricter disclosure norms might impact a wide range of transactions, not limited to just international ones, as mentioned by a source from the Finance Ministry who chose to remain anonymous.
The proposed changes are geared towards enhancing transparency and improving compliance, particularly for payment aggregators who would be brought under the purview of the new norms. Real-time tracking of transactions would provide authorities with more detailed insights into the flow of funds, potentially aiding in the identification and prevention of illicit financial activities. However, this move towards stricter norms would require substantial legal and procedural adjustments across various jurisdictions, posing a challenge to ensure smooth implementation without hindering the efficiency and speed of transactions.
In response to these potential changes, consultations are underway with key industry players such as VISA and Mastercard to gather insights and address concerns regarding the impact of the new norms on businesses and transaction processes. The Reserve Bank of India (RBI) is actively engaging with industry stakeholders to advocate for a balance between transparency and operational feasibility, emphasizing the importance of compliance while ensuring the seamless functioning of financial activities. India is set to host a consultation discussion in Mumbai in April next year to further delve into the implications and implementation strategies surrounding these proposed standards, with the ongoing expectation of retaining a favorable compliance rating from the upcoming mutual evaluation report by FATF.