MUMBAI: Indian cryptocurrency exchanges are scrambling to secure viable, sustainable payment solutions to ensure seamless transactions after cutting ties with banks and payment gateways, said six industry insiders.
Exchanges are struggling to cope after the central bank, Reserve Bank of India (RBI), which has said it does not support digital currencies, out of concern over their impact on financial stability, informally asked banks to be clear.
Customer complaints have flooded all the major exchanges in India as transactions have been affected due to pulldown by major payment gateways, according to social media and users. “Banks are reluctant to do business,” said Zebpay co-CEO, Avinash Shekhar. Oldest crypto exchange that is not offering instant settlement.
“We are talking to several payment partners but progress has been slow.”
The heads of five crypto exchanges are resorting to options such as tying up with smaller payment gateways, creating their own payment processors, prohibiting instant settlement or offering only peer-to-peer transactions, the heads of five crypto exchanges said.
At least two exchanges have tied up with Airpay, a smaller payment processing firm, after its larger peers severed ties.
According to industry estimates, there is no official data, but there are around 15 million crypto investors in India with a net worth of over 100 billion rupees ($1.34 billion).
Alternative
Some crypto exchanges, such as WazirX, are forced to allow peer-to-peer transactions only on certain days, while others, such as Wold, allow bank transfers with manual settlement as they seek payment processors. support settlements.
Even major payment gateways, such as razorpay, PayU and BillDesk have severed ties as they too are dependent on banks to process transactions and the action taken by the big banks has left them stunned.
Three payment processors did not respond to a request for comment.
A few others, such as CoinSwitch and WazirX, have signed up with Airpay, a smaller Mumbai-based payment processor, for instant transfers.
The payment gateway is backed by venture capital fund Kalaari Capital and billionaire stock investor Rakesh Jhunjhunwala, who has been vocal in its opposition. cryptocurrency.
Jhunjhunwala did not immediately respond to an email seeking comment.
Smaller payment gateways have not proven to be very successful in handling large volumes of transactions, leading to failures resulting in a flood of user complaints.
The lack of support from banks means that smaller companies, like larger counterparts, are withdrawing from crypto activities.
The founder of an Indian crypto exchange said on the condition of anonymity, “The partnership with smaller payment processors has not stabilized yet, and is a temporary solution.”
Others, such as BitBans, have built their own native payment processors, allowing certain required transactions as the system does not require prior approval from the Reserve Bank of India, the central bank.
“These are only stop-gap arrangements and do not solve the problem of the industry,” said Gaurav Dahake, chief executive of domestic exchange BitBans.
The prohibition has not started well, as it has forced customers to opt for peer-to-peer (P2P) transactions that allow buyers and sellers to connect directly.
“Predictably, there has been an increase in alternative transaction methods such as P2P, which makes the market more inefficient and also exposes customers to the risk of fraud,” said the chief executive of another crypto exchange.
($1=74.3650 Indian Rupee)
read all Breaking News, today’s fresh news and coronavirus news Here
.