PA settlement timelines: the current contractual rule

The 2025 settlement table must be used instead of copying a universal deadline from repealed 2020 guidance.

Published by Finin2min · Updated 24 October 2026

How this provision works

Credit to the merchant’s account follows the agreement between PA and merchant. The agreement must be fair, equitable and transparently state settlement timelines. The current table does not impose one universal T+1 period on every merchant arrangement.
An existing PA sets up the required escrow within two months of RBI authorisation under the table. Funds may migrate before authorisation, but the stated PSS Act section 23A protection begins only after authorisation.
Reconcile realised collections, permitted debits, refunds and merchant credits so the day-end escrow requirement is continuously met. A longer contractual settlement interval does not authorise use of merchant money for unrelated expenses.
The 2025 repeal/saving clauses preserve only specified pending PA-O/PA-CB cases and earlier approvals/actions. Do not assume every historic settlement circular survives unchanged for every operator.
Where a payment itself fails, the separate rail-specific reversal/compensation TAT still applies. Merchant settlement timing and customer failed-payment reversal are different clocks.

Practical illustration

A fair disclosed contract specifies settlement two days after an agreed event. Test actual performance against that contract and the escrow rules; do not mark it compliant or non-compliant solely from an old universal T+1 slogan.

The example is illustrative; it is not a reported company or court case.

Questions answered

Does the current PA table say every merchant must settle T+1?

No. It specifies the fair, equitable and transparent PA–merchant agreement.

Can a contractual settlement period override failed-payment compensation rules?

No. The payment-failure framework is a separate obligation.

Primary source and edition

RBI PA Directions of 15 September 2025, read with the stated current common and payment-system instruments. PA paragraph 16 Table 1 timelines; paragraphs 18 and 19–23.

Open the official instrument at this provision

Legal effect follows the instrument’s commencement and amendment provisions; a website upload date does not by itself change the law.

Related primary authorities

Separate rail-specific failed-payment reversal and compensation rules

Scope and source editions

Reviewed against the named official editions on 24 October 2026. Product, regulated entity, transaction type and the instrument’s commencement or saving provisions determine applicability. Examples are illustrations rather than reported company cases.