RIGHTS AND DUTIES OF A SYSTEM PROVIDERCentral

Section 21 of The Payment and Settlement Systems Act, 2007

(1)Every system provider shall disclose to the existing or potential system participants, the terms and conditions including the charges and the limitations of liability under the payment system, supply them with copies of the rules and regulations governing the operation of the payment system, netting arrangements and other relevant documents.
(2)It shall be the duty of every system provider to maintain the standards determined under this Act.

Summary

System providers must tell participants about the terms and conditions of using the system.
This disclosure must include the fees or charges and any limits on the provider's liability.
Both current and potential participants have the right to receive this information.
Providers must give participants copies of the system's rules, regulations, and netting details.
Providers are responsible for maintaining the standards set under the Act.

Practical examples

1Before "ClearPay" allows a new bank to join its network on May 1, 2025, it sends them a full list of transaction fees and a copy of the rules for settling losses.

2A system provider updates its software to ensure it still meets the technical standards for security determined by the Reserve Bank earlier that year.

FAQ

1. Does a system provider have to reveal its charges before someone joins?

Yes, they must disclose terms, conditions, and charges to both existing and potential participants.

2. What specific documents must be given to participants?

They must be supplied with copies of the rules and regulations governing operation, netting arrangements, and other relevant documents.

3. Who is responsible for keeping up the standards of the payment system?

It is the duty of every system provider to maintain the standards determined under the Act.

Test yourself

Q1.According to Section 21 of The Payment and Settlement Systems Act, 2007, what must a system provider disclose regarding its legal responsibilities?

Q2.Under Section 21 of The Payment and Settlement Systems Act, 2007, who is entitled to receive disclosures from the system provider?

Q3.Which of the following documents is a system provider required to supply to participants under Section 21 of The Payment and Settlement Systems Act, 2007?

Q4.What is the system provider's duty regarding standards under Section 21 of The Payment and Settlement Systems Act, 2007?

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