Delhi High Court Asks RBI to Mediate PayU Payment Dispute

India's Delhi High Court has ordered the Reserve Bank of India (RBI) to mediate a dispute involving Prosus-backed fintech platform PayU Payments, YES Bank, ICICI Bank, and Visa. The conflict centers on interchange reimbursement fee (IRF) claims arising from alleged misclassification of merchant category codes (MCCs).

The court mandated that all parties maintain the status quo on claims related to past transactions. It also prohibited acquiring banks from making further deductions from PayU’s settlements during the mediation period and restrained Visa from issuing final determinations on pending IRF claims.

The directive came from a single-judge bench after days of hearings. The RBI is tasked with assigning a senior officer experienced in the payments sector to facilitate a resolution within 30 days. The next court hearing is scheduled for October 27.

The dispute concerns IRF claims raised by ICICI Bank and other acquiring banks, alleging incorrect MCCs were assigned to certain merchants. PayU has stated it does not assign MCCs but forwards merchant information to acquiring banks for their assessment. The company is seeking the return of ₹6.88 crore (approximately $825,000 USD) that YES Bank allegedly deducted from its settlements, despite a partial reversal.