This PPT is intended to give a brief overview of the vision document titled “Payment and settlement systems in India: Vision – 2019-2021” published by RBI.

1. 1
PAYMENT AND SETTLEMENT SYSTEMS IN INDIA: VISION – 2019-21
Empowering Exceptional (E)payment Experience
Published By RBI
PPT by
MUKUL KUMAR
PGP 2018-20, IIM Udaipur
STRATEGY INTERN, ROINET
Prepared by Mukul Kumar, IIM Udaipur17 May 2019

2. Preface
This PPT is intended to give a brief overview of the vision document titled
“Payment and settlement systems in India: Vision – 2019-2021” published
by RBI
(Prepared for non-profit and educational purposes. No copyright violation
intended)
Some segments are kept intentionally wordy to keep as much as details as
possible considering the case that the reader hasn’t gone through the
original document
In case of any curiosity regarding any point, the reader is encouraged to go
through the original report which can be accessed at
https://www.rbi.org.in/Scripts/PublicationVisionDocuments.aspx?Id=921
Prepared by Mukul Kumar, IIM Udaipur 217 May 2019

3. PAST
Prepared by Mukul Kumar, IIM Udaipur 317 May 2019

4. Payment Systems Vision 2018
Building of ‘best-in-
class’ payment and
settlement systems
for a ‘less-cash’ India
4 STRATEGIC
PILLARS
Responsive regulation
Robust infrastructure
Effective supervision
Customer centricity
Through
VISION
Prepared by Mukul Kumar, IIM Udaipur 417 May 2019

5. Positive outcomes of the developments in Payment Systems during 2015-18
Positive
Outcomes
Introduction
of new and
innovative
systems
Distinctive
shift from
paper to
electronic
payment
modes
Sizeable
increase in
transaction
turnover
Customer
centric
initiatives
International
recognition
Prepared by Mukul Kumar, IIM Udaipur 517 May 2019

6. Payment Systems Vision 2018 : Achievements
ACHIEVEMENTS
Continued decrease
in the share of
paper-based clearing
instruments
Consistent growth in
individual segments
of retail electronic
payment systems
such as NEFT, IMPS
and card transactions
Increase in registered
customer base for
mobile banking
Launch of new
products like Unified
Payments Interface
(UPI) and Bharat QR
(BQR)
Significant growth in
acceptance
infrastructure
Accelerated use of
Aadhar in payment
systems.
Digital payment transaction turnover vis-à-vis GDP
(at market prices-current price) increased from 7.14
in 2016 to 7.85 in 2017 and further to 8.42 in 2018.
The turnover in payment transactions (after
including CCIL figures and paper) vis-à-vis GDP (at
market prices-current price) increased from 14.41 in
FY 2015-16 to and 14.73 in FY 2016-17 and further
to 15 in 2017-18.
Debit card usage at Point of Sale (PoS) vis-à-vis ATM
is 30.1% of total in terms of volume (10.4% in 2014-
15).
Prepared by Mukul Kumar, IIM Udaipur 617 May 2019

7. FUTURE
Prepared by Mukul Kumar, IIM Udaipur 717 May 2019

8. PAYMENT SYSTEMS VISION – 2021
VISION
2021
4 Goal
Posts
36-month
timeframe
36 specific
action
points
12 specific
outcomes
Covers the period up to December 2021
Focuses on further enhancements /
improvements in all facets of payment systems
Aim towards progressive reduction in ‘per-
transaction' cost to customers keeping in view
the marginal cost advantage with increase in
the number of transactions
Prepared by Mukul Kumar, IIM Udaipur 817 May 2019

9. PAYMENT SYSTEMS VISION – 2021
TWO-PRONGED APPROACH
Exceptional customer experience Enabling an eco-system for such customer experience
AIMs
Enhancing the experience of Customers
Empowering payment System Operators and Service Providers
Enabling the Eco-system and Infrastructure
Putting in place a Forward-looking Regulation
Supported by a Risk-focussed Supervision
Prepared by Mukul Kumar, IIM Udaipur 917 May 2019

10. GOAL POSTS FOR VISION 2021
COMPETITION (10 action points)
• Specific thrust areas like creating regulatory sandbox,
authorizing new players etc. for enhancement of
Competition in the payment systems landscape
COST (7 action points)
• Presence of multiple players in the market leading to
achieve optimal Cost for the customers
CONVENIENCE (10 action points)
• Freer access with availability of multiple payment system
options anytime-anywhere should cater to the
requirement of Convenience
CONFIDENCE (9 action points)
• ‘No-compromise’ approach towards safety of payment
systems should address security vulnerabilities to retain
customer Confidence
GOAL POSTS (4 Cs)
Prepared by Mukul Kumar, IIM Udaipur 1017 May 2019

11. 7 Action points emphasizing the goal-post of Cost
ACTION
BY
RBI NPCI PSOs (Payment
System Operators)
 Accessible, affordable and inclusive services
 Review of corridors and charges for inbound cross border
remittances
 Inter-operability and building capability to process transactions
of one system in another system
 Acceptance infrastructure to address supply-side issues
 System capacity and scalability
 Increasing LEI usage for large value cross border payments
 Regulation of payment gateway service providers and payment
aggregators
# LEI means Legal Entity Identifier
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Prepared by Mukul Kumar, IIM Udaipur 1117 May 2019

12. 10 Action points emphasizing the goal-post of Competition
ACTION
BY
RBI NPCI PSOs
 Self-Regulatory Organisation for all PSOs
 Feature phone- based payment services
 Off-line payment solutions
 USSD-based payment services
 Global outreach of payment systems
 Benchmarking India’s Payment Systems
 Fostering innovation in a responsible environment through regulatory
sandbox
 Review of membership to centralized payment systems
 Encourage and facilitate innovation in an environment of collaborative
competition
 Inter-regulatory and intra-regulatory co-ordination
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Prepared by Mukul Kumar, IIM Udaipur 1217 May 2019

13. 10 Action points emphasizing the goal-post of Convenience
ACTION
BY
RBI NPCI PSOs
 Harmonizing TAT for resolution of customer complaints
 Setting up a 24x7 helpline
 Enhancing awareness
 Conducting customer awareness surveys
 Internal ombudsman for digital payments
 National settlement services for card schemes
 Enhanced availability of retail payment systems and a wide bouquet of
offerings
 Widen scope / use of domestic cards
 Explore adoption of newer technologies including DLT for enhancement
of digital payment services
 E-mandates / Standing Instructions for payment transactions
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Prepared by Mukul Kumar, IIM Udaipur 1317 May 2019

14. 9 Action points emphasizing the goal-post of Confidence
ACTION
BY
RBI NPCI PSOs
 Increased coverage of the Cheque Truncation System
 Geo-tagging of payment system touch points
 Contact-less payments and tokenization
 Enhanced security of mobile-based payments
 Oversight for maintaining integrity of payment systems
 Third party risk management and system wide security
 Increased scope and coverage of the Trade Receivables Discounting
System (TReDS)
 Framework for collection of data on frauds in payment systems
 Framework for testing resilience of payment systems
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Prepared by Mukul Kumar, IIM Udaipur 1417 May 2019

15. 12 Specific outcomes targeted during the vision period
Further decrease in the share of
paper-based clearing as a
percentage of retail payments
Accelerated growth in individual
retail electronic payment systems
Digital payment transaction
turnover vis-à-vis GDP expected to
further increase to 10.37 in 2019,
12.29 in 2020 and 14.80 in 2021
Increase in use of digital modes of
payment for purchase of goods
and services through increase in
debit card transactions at PoS
(35% increase)
Usage of debit cards at PoS
transactions is expected to be at
least 44% of total debit card
transactions (at PoS + ATM)
Enhanced availability of PoS
infrastructure expected to
reduced demand for cash and
thus over time achieve reduction
in Cash in Circulation (CIC) as a
percentage of GDP
Further facilitation of mobile
based payment transactions as
gauged on basis of the registered
customer base (expected increase
of 50% considering the base
effect)
Enhanced usage of electronic
payment systems expected to
reduce the marginal cost given the
additional volume
Increased deployment of card
acceptance infrastructure across
the country including at smaller
centres (expected to have 5
million active PoS by end 2021)
FTS [Fraud to Sales (Fraud value /
Sales value) x 10000] count for
payment systems is expected to
be less than 10 bps for most of
the payment systems
Increased focus on Security of
systems and customer centricity
(Decrease in Technical Declines
and Business Declines reported
across various payment systems
by 10% and 5% year-on-year
respectively
Enhanced healthy competition in
the payments space and
establishment of new Payment
System Operators (PSOs)
Prepared by Mukul Kumar, IIM Udaipur 1517 May 2019

16. THANK YOU
16Prepared by Mukul Kumar, IIM Udaipur17 May 2019
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