Payments Market in India, Mobile Wallet, Mobile Payments , Evolving Payments Ecosystem, Payments Industry , Payments Bank , Payment Gateways , Mobile Market, Payment Methods
Payments Market in India, Mobile Wallet, Mobile Payments , Evolving Payments Ecosystem, Payments Industry , Payments Bank , Payment Gateways , Mobile Market, Payment Methods
Digital payment systems are the backbone of digital commerce. Indian government along with the corporate community is making a significant push to build infrastructure for digital payments along with encouraging the citizens towards a cashless economy.
The AEPS (Aadhaar Enabled Payment System) banking service aims to empower all sections of the society by making financial and banking services available to all through Aadhaar.
Introduction of E-Wallets, its types, Advantages,Disadvantages, Examples of E-Wallet,Needs of E-Wallet, Top E-Wallets in World and in India, Description of Mobikwik, its Steps, Architecture of transfer between two wallets, About Paytm, How does Paytm Earn, Recharge on PayTm, Steps to use Paytm, Web Technologies of Paytm, Good at Paytm and Bad at it, Our own proposed system to overcome the disadvantage of existing system
Digital wallet service in india - NetscribesNetscribes
A digital wallet is a virtual web and mobile-based wallet where one can store cash for making mobile, online or offline payments
For the complete report, please write to info@netscribes.com
The document is an attempt to give insights into digital payments space on the whole. It describes the different payment scenarios or methods and how the underlying technology works. Topics covered - NFC;;contacless payments;Mobile Payments;smart cards chips technology;apple pay;Card operating system
Mobile wallets have made it easy to carry out online shopping payments, online utility bill payments, mobile recharge online, DTH recharge online, online bus / movie ticket booking.
In India there are options like Paytm, Mobikwik, Vodafone M-pesa, Chillr, Free-charge, Airtel Money, Oxigen etc.
This presentation gives an overview about how is India progressing into making UN's Vision 2020 goal (of financial inclusion) a reality.
It's a technology breakthrough India has been achieved in combat to score financial data security in 21st century and independence from reliance over other nations to provide multilateral system of payments in India.
Comprehensive Guide to Understanding Prepaid Payment Instruments (PPIs).pdfPay10
Understanding Prepaid Payment Instruments (PPIs) can be crucial in today's digital world where these instruments have become an integral part of everyday transactions. PPIs are defined as instruments that facilitate the purchase of goods and services, financial services, remittance facilities, etc., against the value stored within them. They have evolved significantly, playing a vital role during the pandemic when contactless transactions gained prominence for safety reasons.
Digital payment systems are the backbone of digital commerce. Indian government along with the corporate community is making a significant push to build infrastructure for digital payments along with encouraging the citizens towards a cashless economy.
The AEPS (Aadhaar Enabled Payment System) banking service aims to empower all sections of the society by making financial and banking services available to all through Aadhaar.
Introduction of E-Wallets, its types, Advantages,Disadvantages, Examples of E-Wallet,Needs of E-Wallet, Top E-Wallets in World and in India, Description of Mobikwik, its Steps, Architecture of transfer between two wallets, About Paytm, How does Paytm Earn, Recharge on PayTm, Steps to use Paytm, Web Technologies of Paytm, Good at Paytm and Bad at it, Our own proposed system to overcome the disadvantage of existing system
Digital wallet service in india - NetscribesNetscribes
A digital wallet is a virtual web and mobile-based wallet where one can store cash for making mobile, online or offline payments
For the complete report, please write to info@netscribes.com
The document is an attempt to give insights into digital payments space on the whole. It describes the different payment scenarios or methods and how the underlying technology works. Topics covered - NFC;;contacless payments;Mobile Payments;smart cards chips technology;apple pay;Card operating system
Mobile wallets have made it easy to carry out online shopping payments, online utility bill payments, mobile recharge online, DTH recharge online, online bus / movie ticket booking.
In India there are options like Paytm, Mobikwik, Vodafone M-pesa, Chillr, Free-charge, Airtel Money, Oxigen etc.
This presentation gives an overview about how is India progressing into making UN's Vision 2020 goal (of financial inclusion) a reality.
It's a technology breakthrough India has been achieved in combat to score financial data security in 21st century and independence from reliance over other nations to provide multilateral system of payments in India.
Comprehensive Guide to Understanding Prepaid Payment Instruments (PPIs).pdfPay10
Understanding Prepaid Payment Instruments (PPIs) can be crucial in today's digital world where these instruments have become an integral part of everyday transactions. PPIs are defined as instruments that facilitate the purchase of goods and services, financial services, remittance facilities, etc., against the value stored within them. They have evolved significantly, playing a vital role during the pandemic when contactless transactions gained prominence for safety reasons.
The presentation involves about Fintech industry, the technologies involved, various UPI's, regulators of Fintech Industry in India and Payment Sytstem in India
Digital lending is quickly growing among the 'thin file' borrowers i.e. the borrowers with no or negligible credit history. These borrowers can be both consumers or businesses.
But, in recent months the digital lenders are struggling with liquidity crises due to the pandemic. As RBI extended loan moratorium to borrowers, the Digital Lenders are in a catch-22 situation. While their borrowers expect them to extend the moratorium, financial institutions they borrow from (Banks and large NBFCs) are either refusing to or delaying to extend the moratorium to the digital lenders. digital lenders Association of India (DLAI) has already approached the RBI to get the moratorium benefits.
It is quite expected that many digital lenders (especially ones with weaker balance sheets) will not survive not only because of the liquidity crisis but also exposure to less creditworthy borrowers who are often small businesses and less creditworthy individuals. The economic repercussions of the lockdown may leave many of the borrowers unable to repay as small businesses shut down and people lose employment.
Although, the lockdowns have caused rapid digital adoption which is beneficial for the industry in the long-term. This indicates that the industry is expected to go through a lot of consolidation as cash strapped players look to be acquired to get some exit.
Let us understand this industry.
UPI (Unified Payments Interface) – The Game ChangerMindfire LLC
Phenomenal growth may be the exact term to describe the increased volume of digital payments in India in 2022. If you inspect the March data of the current year, it shows that this payment ecosystem grew by 216% compared to the same period in 2019. The Unified Payments Interface (UPI), an initiative of the National Payments Corporation of India (NPCI) has been a critical driver of cashless transactions since its launch in 2016. The idea behind introducing UPI was to enable fast, secure, and seamless digital payments with the Immediate Payment Service (IMPS) infrastructure.
National payment corporation of india launched offline transaction through ussdMukesh Ray
NPCI introduced a new offline UPI USSD transaction system. internet one of the major factor to do transactions, but internet connectivity to particular areas make it more difficult for the users. small traders got effected due to internet issues. NPCI launched this programe to increase revenue .
This ppt has unique trends in banking that includes the recent launch of Unified Payment Interface(UPI)by NPCI,Data Analytics usage by banks,India-world's largest recipient of remittances in 2015,an Recurring Deposit scheme linked to Holiday Savings Account
THE GROWTH ANALYSIS OF UNIFIED PAYMENTS INTERFACE (UPI) IN INDIA.docxVARUN KESAVAN
Interoperability among “payment systems in India has facilitated unparalleled ease of transactions while robust customer protection measures have made India’s retail payment system one of the safest in the world.
Unified Payments Interface (UPI) is a mobile-based, 365x24x7 ‘fast payment’ system launched in August 2016 which allows users to send and receive money instantly using a Virtual Payment Address (VPA) set by the user itself. The unique feature of VPA-based transaction is that it obviates the need for sharing account or bank details to the remitter. It supports person-to-person (P2P) and person-to-merchant (P2M) payments which can be used over a smart phone (app-based) or a feature phone (USSD8-based), and at merchant location/website. It facilitates immediate money transfer through both ‘pull’ and ‘push’ payments.
Non-financial transactions, such as balance enquiry, can also be carried out using UPI. It powers multiple bank accounts into a single mobile application of any participating bank/non-bank Third Party Application Provider (TPAP). Funds can also be transferred through UPI using account number with and IFSC (Indian Financial System Code) of the bank branch. The UPI 2.0 was launched in August 2018, which enabled users to link their Overdraft accounts to UPI VPA. Users are also able to pre-authorise transactions by issuing a mandate for specific merchant for a one-time payment. There’s also an added feature of AutoPay facility for recurring payments.
The framework of UPI comprises NPCI as switching and settlement service provider and banks as Payment System Providers (PSPs) – as issuer banks and beneficiary banks. Additionally, it can also have Third Party Application Providers (TPAP) such as Google Pay. Transactions are carried out through mobile devices with two-factor authentication using device binding and UPI PIN as security. Currently, the per transaction limit is INR 0.2 million.
UPI has attracted participation from a number of FinTech players. As against banks, it is the non-bank players who have made good use of the openness of UPI architecture, which allows any entity’s mobile application to be used for doing UPI transactions. Since its humble beginning in 2016, UPI has become one of the most popular payment products in India. Convenience of remembering and sharing a simple UPI VPA may have added to its popularity”.
On the whole we can observe there is a significant increase in the number of UPI transactions both in terms of volume and in terms of value. Similarly, from 17.86 million transactions in financial year 2016 – 2017 to 22,330.65 million transactions in the year 2021 – 2022 with the CAGR of 228%. Similarly with reference to value of transactions there is a increase in the value of transactions from Rs. 69.47 billion transactions in the year 2016 – 2017 to Rs. 41,036.54 billion transactions in the year 2021 – 2022 with the CAGR of 190%. UPI is going to be a catalyst in the retail payments sector in India.
FidyPay is an excellent Bharat bill payment system Service ProviderFidyPay
The Bharat Bill Payment System (BBPS) is an integrated bill payment system introduced by the National Payments Corporation of India (NPCI) in 2016. It is a one-stop platform for making various types of bill payments, including electricity, water, gas, telecom, and DTH bills, among others. The BBPS system connects multiple billers and banks, enabling customers to pay their bills through a single platform, either online or offline. Customers can make payments through multiple channels such as internet banking, mobile banking, POS (Point of Sale), and ATM (Automated Teller Machine), among others. Visit us at - www.fidypay.com
India Payment Market size is envisioned to attain US$ 8,137.3 Billion by 2028. The virtual fee panorama in India has passed through an enormous transformation, indicating the profound effect it will have on the populace. This shift signifies that a majority of Indians in 2022 belong to a technology that is tremendously talented or exposed to era. Tech-savvy generation has a greater reliance on superior, automated, quicker, and extra efficient technology and offerings.
How FidyPay Is The Best UPI AutoPay Service Provider Company?FidyPay
UPI Autopay is a payment feature introduced by the National Payments Corporation of India (NPCI) that allows users to set up recurring payments for their bills, subscriptions, and other regular expenses. With UPI Auto payment, users can automate their payments, and the amount will be deducted automatically from their bank account at a specified frequency. To use UPI Autopay Service, the user needs to link their bank account with their UPI ID and enable the autopay feature. Once enabled, the user can set up recurring payments by providing the payment details such as the payment amount, payment frequency, and payment end date. Visit us at - www.fidypay.com
India Payment Market, Size, Share, Growth, Key PlayersRenub Research
India Payment Market size is envisioned to attain US$ 8,137.3 Billion by 2028. The virtual fee panorama in India has passed through an enormous transformation, indicating the profound effect it will have on the populace. This shift signifies that a majority of Indians in 2022 belong to a technology that is tremendously talented or exposed to era. Tech-savvy generation has a greater reliance on superior, automated, quicker, and extra efficient technology and offerings. Consequently, there may be a rapid growth inside the demand for India payment marketplace within the coming years.
According to a report released by strategy consulting firm Redseer Strategy Consultants in collaboration with Plural by Pine labs, 85% of the businesses in India will be digitally enabled by FY26. From bustling cities to remote villages, digital payments are on the fast track to change the way users transact. Penetration of smartphones and the internet, and favorable government policies have been key drivers in the adoption of digital payments in the country. With more than 70 crore internet users, India has the second-highest number of internet users in the world, trailing only behind China. With a population of 140 Cr, India is poised to become a global leader in digital payments in the coming years.
Similar to Overview of digital payments in india (20)
WINDING UP of COMPANY, Modes of DissolutionKHURRAMWALI
Winding up, also known as liquidation, refers to the legal and financial process of dissolving a company. It involves ceasing operations, selling assets, settling debts, and ultimately removing the company from the official business registry.
Here's a breakdown of the key aspects of winding up:
Reasons for Winding Up:
Insolvency: This is the most common reason, where the company cannot pay its debts. Creditors may initiate a compulsory winding up to recover their dues.
Voluntary Closure: The owners may decide to close the company due to reasons like reaching business goals, facing losses, or merging with another company.
Deadlock: If shareholders or directors cannot agree on how to run the company, a court may order a winding up.
Types of Winding Up:
Voluntary Winding Up: This is initiated by the company's shareholders through a resolution passed by a majority vote. There are two main types:
Members' Voluntary Winding Up: The company is solvent (has enough assets to pay off its debts) and shareholders will receive any remaining assets after debts are settled.
Creditors' Voluntary Winding Up: The company is insolvent and creditors will be prioritized in receiving payment from the sale of assets.
Compulsory Winding Up: This is initiated by a court order, typically at the request of creditors, government agencies, or even by the company itself if it's insolvent.
Process of Winding Up:
Appointment of Liquidator: A qualified professional is appointed to oversee the winding-up process. They are responsible for selling assets, paying off debts, and distributing any remaining funds.
Cease Trading: The company stops its regular business operations.
Notification of Creditors: Creditors are informed about the winding up and invited to submit their claims.
Sale of Assets: The company's assets are sold to generate cash to pay off creditors.
Payment of Debts: Creditors are paid according to a set order of priority, with secured creditors receiving payment before unsecured creditors.
Distribution to Shareholders: If there are any remaining funds after all debts are settled, they are distributed to shareholders according to their ownership stake.
Dissolution: Once all claims are settled and distributions made, the company is officially dissolved and removed from the business register.
Impact of Winding Up:
Employees: Employees will likely lose their jobs during the winding-up process.
Creditors: Creditors may not recover their debts in full, especially if the company is insolvent.
Shareholders: Shareholders may not receive any payout if the company's debts exceed its assets.
Winding up is a complex legal and financial process that can have significant consequences for all parties involved. It's important to seek professional legal and financial advice when considering winding up a company.
ASHWINI KUMAR UPADHYAY v/s Union of India.pptxshweeta209
transfer of the P.I.L filed by lawyer Ashwini Kumar Upadhyay in Delhi High Court to Supreme Court.
on the issue of UNIFORM MARRIAGE AGE of men and women.
How to Obtain Permanent Residency in the NetherlandsBridgeWest.eu
You can rely on our assistance if you are ready to apply for permanent residency. Find out more at: https://immigration-netherlands.com/obtain-a-permanent-residence-permit-in-the-netherlands/.
ALL EYES ON RAFAH BUT WHY Explain more.pdf46adnanshahzad
All eyes on Rafah: But why?. The Rafah border crossing, a crucial point between Egypt and the Gaza Strip, often finds itself at the center of global attention. As we explore the significance of Rafah, we’ll uncover why all eyes are on Rafah and the complexities surrounding this pivotal region.
INTRODUCTION
What makes Rafah so significant that it captures global attention? The phrase ‘All eyes are on Rafah’ resonates not just with those in the region but with people worldwide who recognize its strategic, humanitarian, and political importance. In this guide, we will delve into the factors that make Rafah a focal point for international interest, examining its historical context, humanitarian challenges, and political dimensions.
RIGHTS OF VICTIM EDITED PRESENTATION(SAIF JAVED).pptxOmGod1
Victims of crime have a range of rights designed to ensure their protection, support, and participation in the justice system. These rights include the right to be treated with dignity and respect, the right to be informed about the progress of their case, and the right to be heard during legal proceedings. Victims are entitled to protection from intimidation and harm, access to support services such as counseling and medical care, and the right to restitution from the offender. Additionally, many jurisdictions provide victims with the right to participate in parole hearings and the right to privacy to protect their personal information from public disclosure. These rights aim to acknowledge the impact of crime on victims and to provide them with the necessary resources and involvement in the judicial process.
Responsibilities of the office bearers while registering multi-state cooperat...Finlaw Consultancy Pvt Ltd
Introduction-
The process of register multi-state cooperative society in India is governed by the Multi-State Co-operative Societies Act, 2002. This process requires the office bearers to undertake several crucial responsibilities to ensure compliance with legal and regulatory frameworks. The key office bearers typically include the President, Secretary, and Treasurer, along with other elected members of the managing committee. Their responsibilities encompass administrative, legal, and financial duties essential for the successful registration and operation of the society.
Introducing New Government Regulation on Toll Road.pdfAHRP Law Firm
For nearly two decades, Government Regulation Number 15 of 2005 on Toll Roads ("GR No. 15/2005") has served as the cornerstone of toll road legislation. However, with the emergence of various new developments and legal requirements, the Government has enacted Government Regulation Number 23 of 2024 on Toll Roads to replace GR No. 15/2005. This new regulation introduces several provisions impacting toll business entities and toll road users. Find out more out insights about this topic in our Legal Brief publication.
NATURE, ORIGIN AND DEVELOPMENT OF INTERNATIONAL LAW.pptxanvithaav
These slides helps the student of international law to understand what is the nature of international law? and how international law was originated and developed?.
The slides was well structured along with the highlighted points for better understanding .
In 2020, the Ministry of Home Affairs established a committee led by Prof. (Dr.) Ranbir Singh, former Vice Chancellor of National Law University (NLU), Delhi. This committee was tasked with reviewing the three codes of criminal law. The primary objective of the committee was to propose comprehensive reforms to the country’s criminal laws in a manner that is both principled and effective.
The committee’s focus was on ensuring the safety and security of individuals, communities, and the nation as a whole. Throughout its deliberations, the committee aimed to uphold constitutional values such as justice, dignity, and the intrinsic value of each individual. Their goal was to recommend amendments to the criminal laws that align with these values and priorities.
Subsequently, in February, the committee successfully submitted its recommendations regarding amendments to the criminal law. These recommendations are intended to serve as a foundation for enhancing the current legal framework, promoting safety and security, and upholding the constitutional principles of justice, dignity, and the inherent worth of every individual.
2. INTRODUCTION
The payments landscape in India has evolved over the past many years,
stimulated by developments in information technology. Improvements in IT
systems, aided by the push for no-cash transactions has bolstered the digital
payments infrastructure in India with newer cutting-edge technologies being
rolled out constantly by the Reserve Bank of India and the National Payments
Corporation of India.
Since the introduction of online payment mechanisms like NEFT and RTGS in
the 2005 to operationalizing UPI in 2016, India has come a long way in
establishing a robust ecosystem of digital payments. This in turn has provided
a much-needed boost to the fintech industry, evidenced by the increasing
number of start-ups.
Next-generation payment technologies such as UPI, Bharat QR, digital wallets
are expected to thrive and projected to double their contribution to 30% in
the digital payments industry.
According to a report by Google and Boston
Consulting Group (BCG), the Indian digital
payments is estimated to touch $500 billion
by 2020, contributing 15 per cent to the
country’s GDP.
It is estimated that the number of micro –
transactions (transactions lower than INR
100) are going to grow at an enormous pace
with the at least 50% of the person to
merchant transactions being below INR 100.
While wallets were expected to dominate
the ecosystem, the advent of Unified
Payments Interface (UPI) was a
gamechanger in the digital payments
ecosystem. Market trends suggest that UPI
will outshine wallets with a compounded
annual growth rate of almost 13% as stated
in a report published by KPMG.
3. 1. Enactment of
Payment and
Settlement Systems,
Act 2007
2. Launch of Aadhaar
3. Launch of
Immediate Payment
Service (IMPS)
4. Electronic
Payments involving
intermediaries
1. Launch of RuPay
2. Launch of National
Automated Clearing
House (NACH)
3. Launch of National
Unified USSD
Platform (99#)
1. Launch of Bharat
Bill Payment System
(BBPS)
2. Launch of Unified
Payments Interface
(UPI) and Bharat
Interface for Money
3. Launch of Bharat
QR
4. Directions on
Issuance of Prepaid
Instruments by RBI
2012-2014
2015-2018
2006-2011
70% INCREASE IN DIGITAL PAYMENTS
IN INDIA IN 2018
600% INCREASE IN THE NUMBER OF
UPI TRANSACTIONS
6X INCREASE IN THE NUMBER OF
MERCHANTS
PAYMENTS LANDSCAPE IN INDIA
2019-2022
1. Draft Guidelines
for setting up of a
regulatory
sandbox
2. Discussion
paper on
regulating
payment gateways
and payment
aggregators
3. Personal Data
Protection Bill
4. SEBI IRDA TRAI
RBI
NPCI
Payment &
Settlement
Systems Act
REGULATORY FRAMEWORKPayment and Settlement Systems Act
The payments sector is governed by the
Payment and Settlement Systems Act, 2007
and the corresponding Regulations enacted
under it. The Reserve Bank of India (RBI) is
the chief regulator deriving its power from
the aforementioned Act
National Payments Corporation of India
National Payments Corporation of India
(NPCI) is an umbrella organisation for all
retail payment systems in India, set up with
the support of RBI & Indian Banks
Association (IBA).
Other Regulators
The major sector-specific regulators
depending on the nature of the fintech
business are:
1. Reserve Bank of India (RBI)
2. Insurance Regulatory and
Development Authority (IRDA)
3. Telecom Regulatory Authority of India
(TRAI)
4. Securities and Exchange Board of
India (SEBI)
5. CARDS
56.48%NETBANKING
23.80%
UPI
17 %
WALLETS
1.89%
PREFERRED PAYMENT MODES
While mobile wallet transactions grew by only
5% between June 2018-June 2019 with a
decline in the number of transactions in
recent months; UPI transactions increased by
600% in 2018, the share of mobile wallet
transactions in value of digital payments has
also declined in the intervening period from
6% in FY 2018 to 1.87% in FY 2019.
While digital payment transactions have been
growing at a rapid space, the preferred mode
of payment is constantly changing with the
emergence of new technologies. In the years
post demonetization, mobile wallets became
the preferred mode of payment but with the
introduction of UPI, there has been a gigantic
shift from wallets to UPI.
7. Types of PPI
Closed Semi Closed Open
PRE PAID INSTRUMENTS
RBI’s Master Direction dated 11th
October 2017
governs the issuance and operation of PPIs .
A Prepaid Payment Instrument (PPI), facilitates
purchase of goods and services including
financial services, remittance facilities etc.
against the value that is stored on such PPIs.
PPIs are governed by Payments and Settlements
Act, 2007.
Market studies indicate that various companies
intend to shut down wallet offering due to the
increase in the adoption of UPI linked Apps.
Co-Branded
PPIs are primarily of 3 types, Closed, Semi –
Closed and Open. Additionally, the Directions
also enable companies to co brand with
licensed PPI Issuers to issue co-branded PPIs.
8. CLOSED PPI SEMI-CLOSED PPI OPEN PPI
Any Entity Any banking or non-banking
entity
Only banking entities
Not Required Required Required
To avail goods and services
solely from the issuing entity.
Cannot be used for
payments/settlement for third
party transactions.
To purchase goods and services
from a group of clearly identified
merchant locations/
establishments.
Cash withdrawal or redemption
is restricted (whether the issuing
entity is a banking entity or not).
To purchase goods and
services, including financial
services, remittance facilities,
etc. Banks issuing an open PPI
also facilitate cash withdrawal
at ATMs/Point of Sale
(PoS)/Business Correspondents
(BCs).
Restricted Permitted (Subject to KYC) Permitted (Subject to KYC)
FEATURES
Transferability of Funds
Functionality
Approvals
Issuer
9. UPI
*Please note that the numbers denote
the order of the steps
UNIFIED PAYMENT INTERFACE
1. Request for
Payment
8. Confirming
Payment
2. Seeking
Authorisation Details
3. Responding with
Details
4. Request to
debit amount
5. Amount
being debited
6. Request for credit
of amount
7. Confirmation of
credit
The United Payments Interface (UPI) is a
cutting-edge digital payment technology that
facilitates inter-bank transactions in real time
using the Immediate Payments Service (IMPS).
The payment system was designed and
developed by the NPCI. The most important
advantages that UPI provides is that it is cheap,
secure as well as interoperable which can
execute both push & pull transactions unlike
its other predecessors which could only
execute only push transactions. The governing
framework for UPI is the rules & regulations
enacted by NPCI from time to time.
9. Request for
Transaction
Confirmation
10. Confirmation
of Transaction
Remitter
Bank
Beneficiary
Bank
Payee
PSP
Payer
PSP
The number of UPI transactions has increased
approximately by 57,000% since
demonetization!
10. BHARAT BILL PAYMENT SYSTEM
Until now the system catered to only five
services – DTH, water, electricity, gas and
telecom. In September 2019, the RBI extended
the BBPS to include other recurring payments
such as insurance premiums, mutual fund
contributions, municipal taxes and even school
and university fees under the BBPS.
The BBPS is an integrated bill payment system,
introduced by the NPCI and the RBI as an
initiative to promote financial inclusion and
digital payments. BBPS offers interoperable bill
payment service to customers online as well as
through a network of agents on the ground.
Authorised operational
units working on the basis
of the standards set by the
BBPCU
Single authorized entity
operating the BBPS
BBPCU
BBPOU
Customer
Operating Unit
Biller
Operating Unit
Customer and
Biller
Operating Unit
Consumer Customer OU BBPCU Biller OU Biller
1. Consumer uses a
channel (mobile,
internet banking etc)
for payment.
2. Customer OU debits
the account, collates
information and
transfers it to BBPCU.
3. BBPCU undertakes
the settlement and
passes the bill
information to Biller
OU.
4. Biller OU credits
accounts and transmits
information to the
Biller.
BBPS Structure
Transaction Flow
11. Eligibility The eligibility criteria for non-bank entities seeking to operate as BBPOUs is as follows:
a. The entity should be a company incorporated and registered in India.
b. The memorandum of association of the entity must cover the proposed activity of
operating as a BBPOU.
c. The entity should have a net worth of at least INR 100,00,00,000 (Hundred Crores)
d. In case of any foreign direct investment in the entity, necessary approval from the
competent authority is required.
12. BHARAT QR
Bharat QR is an integrated, interoperable Person-to-Merchant (P2M) mobile payment
solution developed by major card payment companies like MasterCard, Rupay, Visa and the
National Payments Corporation of India. The technology allows digital payments for
merchants without the need for having a Point of Sale (PoS) machine.
To make a payment, a user is simply required scan the QR code at a merchant store that has
displayed the Bharat QR code. The codes generated by the merchant can either be static or
generated dynamically for each transaction.
In April 2018, the NPCI issued guidelines on interoperability of all BHIM UPI applications
including merchant and third party applications. This enables the following through BHIM UPI
apps, merchant apps and third party apps:
1) Sending and receiving money using any BHIM UPI ID (VPA)
2) Generating and responding to a collection request
3) Generating, scanning and paying via Bhart QR and BHIM QR
INTEROPERABILITY
13. CARDS
DEBIT CARD
TYPES OF CARDS
DEBIT CARD
CREDIT CARD
CO-BRANDED CARD
Debit cards allows deduction of money directly from a consumer’s bank account to pay for a
purchase. Debit cards can be issued by both banks and NBFCs
Credit cards allow holders to purchase goods and services on credit and enable holders to
obtain cash advances. Credit cards may be issued by both, scheduled commercial banks and
non-banking financial companies (NBFCs).
A co-branded card is sponsored by two parties – typically one is a retailer and the other is a
bank or card network. Banks can issue co-branded credit and debit cards provided they comply
with KYC/AML/CFT norms issued by the RBI. NBFCs are permitted to issue co-branded credit
cards by taking prior approval from the RBI. They are also required to have a minimum net
owned fund of INR 100 crores.
15. UNREGULATED ENTITIES
The framework discussed until now governs certain specific businesses such as lending,
payment settlement, pre-paid instruments etc. It must be noted that there are a whole bunch
of fintech companies that are unregulated (i.e do not require a license or registration) either
because:
1) their operations cannot be categorized as the ones regulated by the relevant legislations,
rules, regulations, directions etc.; or
2) they partner with a licensed entity or piggy back on a licensed entity’s framework in order
to render their services.
The following companies, while fairly large players in the fintech sector as largely unregulated:
1) Payment Facilitators;
2) Payment Aggregators;
3) Loan Facilitators;
5) Crowdfunding Platforms.
However, due to the strong focus on data privacy, security and KYC, it appears that directions
will soon be issued to regulate the operations of such fin tech companies.
16. LOYALTY PROGRAMS
DESCRIPTION
ARE LOYALTY PROGRAMS REGULATED ?
Loyalty Programs are customer retention strategies devised by companies, merchants and
banks to encourage customers to make purchases. There can be various kinds of loyalty
programs such as: (a) Reward points - These reward points can be redeemed for products and
services from the company itself or from third parties, (b) Cash back rewards (c) Loyalty cards.
Whether a specific loyalty program is regulated or not will depend on the type and structure of
the program. For example, meal vouchers are regulated by the RBI but rewards points are
unregulated. The regulation that comes closest to governing reward points are the Pre-Paid
Instruments Guidelines but they do specifically make a mention of the same. Reward points
can generally be exchanged for goods and services and not for cash.
Our view is that the guidelines - as they stand - are not intended to govern rewards points. As
per market study, most companies issuing reward points do not have a PPI license.
17. ELECTRONIC PAYMENT TRANSACTIONS INVOLVING INTERMEDIARIES
In 2011, the RBI in order to safeguard the
interests of the customers and to ensure
that the payments made by them are duly
accounted for by the intermediaries
receiving such payments and remitted to
the accounts of the merchants without
undue delay, issued directions to this effect.
Intermediaries include all entities that collect monies received from customers for payment
to merchants using any electronic/online payment mode, for goods and services availed by
them and subsequently facilitate the transfer of these monies to the merchants in final
settlement of the obligations of the paying customers.
The RBI has mandated that all accounts opened and maintained by banks for facilitating
collection of payments by intermediaries, should be treated as internal accounts of the
banks. The RBI’s directions state that intermediaries have to ensure that such accounts are
not maintained or operated by them.
NODAL ACCOUNT
SETTLEMENT
The RBI has pointed out that it is necessary that banks transfer funds to the ultimate
beneficiaries with minimum time delay. All final settlements to merchants has to be
implemented in the following cycle:
1. All payments to merchants which do not involve transfer of funds to nodal banks should
be effected within a maximum of T+2 settlement cycle (where T is defined as the day of
intimation regarding the completion of transaction.
2. All payments to merchants involving nodal banks should be effected within a maximum
of T+3 settlement cycle.
18. The RBI in April 2019 published a draft framework for regulatory sandbox in India and opened it to
the public and industry experts for comments and recommendations. The objective of proposing a
regulatory sandbox was to “foster responsible innovation in financial services, promote efficiency
and bring benefit to consumers.” In August 2019, the RBI issued an amended version of the Draft
Framework based on the inputs received. An important change in the proposed framework from
the draft framework was the reduction in the minimum net worth of an entity eligible to
participate in the regulatory sandbox and inclusion of the regulatory relaxations that will be
provided to an entity.
REGULATORY SANDBOX
Relaxations
Excluded technologies
Permitted Technologies
Eligibility Criteria
Mobile technology applications (payments, digital identity, etc.), data analytics, application
program interface (APIs) services, applications under blockchain technologies and artificial
intelligence and machine learning applications.
Fintech companies including start-ups, banks, financial institutions and any other company
partnering with or providing support to financial services businesses.
Crypto currency, crypto assets and investing, trading and settling of crypto assets and initial coin
offerings, credit registry, credit information.
Liquidity requirements, board composition, management experience, financial soundness, track
record, etc.
19. PAYMENT GATEWAYS AND AGGREGATORS
Regulatory Approaches
Definition
Background In September, 2019, RBI expressed its intention to regulate payment gateways and aggregators,
citing potential risks as digital transactions continue to rise in India. It stated that fintech entities
may be a source of risk in such a technology and customer experience intensive business if they
have inadequate governance practices which may impact customer confidence and experience.
Payment Gateways and Payment Aggregators refer to entities who –
a. provide technology infrastructure to route and / or facilitate processing of an online
payment transaction and perform other functions without actually handling the funds.
b. facilitate e-commerce sites and merchants to accept various payment instruments from the
customers for completion of their payment obligations.
c. facilitate merchants to connect with acquirers.
The definition covers most players in the fintech sector.
Option 1 : Continue with the existing instructions with minor changes.
Option 2: Limited Regulation, in respect of minimum net-worth, merchant on-boarding,
timelines for settlement of funds, maintenance of escrow account, IT security, etc.
Option 3: Full and Direct Regulation – both on site and off-site monitoring.