Startup Originals Team
India’s sweeping ban on real-money online gaming platforms has sparked major uncertainty among fintech companies and banks, especially around refunding user balances and managing payment operations. Leading financial and payment tech firms are actively seeking government clarity and guidelines to protect user interests and ensure system stability.
Industry Demands Urgent Direction:
Following the passing of the Promotion and Regulation of Online Gaming Bill, 2025, banks and fintechs like PhonePe, Razorpay, Stripe, and PayU met with officials from the Ministry of Electronics & IT (MeitY) and the Reserve Bank of India (RBI) to request detailed rules for processing customer refunds and managing chargebacks. Companies emphasized the need for enough liquidity to honor pending user balances and asked for a transitional window to implement new backend compliance mechanisms.
Refunds and Account Management Concerns:
Representatives expressed worries about the immediate pressure to settle user accounts and refunds, noting that doing so requires substantial cash reserves. Banks also sought guidance on how to distinguish between permitted business transactions and RMG-related payments, warning that freezing accounts could disrupt routine salary and vendor payments. The government assured that players would not be penalized for prior transactions and encouraged flexibility to avoid blocking cards or accounts solely linked to gaming activities.
Impact on Payments and Tech Firms:
Payment companies forecast significant revenue losses, with some estimates placing the monthly hit at ₹20,000–30,000 crore in transaction volumes due to the ban. Digital payment platforms and regulatory technology startups, many reliant on gaming-sector business, are now facing sharp declines and must seek alternative business avenues. Industry participants also urged that regulations should differentiate between banned RMG activities and permitted formats like social gaming and esports.
The Road Ahead:
The government’s initial consultations are expected to be followed by additional meetings to finalize operational rules. The focus remains on ensuring user balances are refunded promptly, maintaining liquidity for settlements, and drafting long-term compliance frameworks for the evolving digital finance landscape. Stakeholders continue to emphasize the importance of enabling a smooth transition for users, companies, and the broader economy.
India’s RMG ban is a major inflection point for the tech and fintech ecosystem, and the coming months will be critical in defining how user interests and industry stability are safeguarded.
