PAYMENT NETWORKS

PAYMENT NETWORKS

TOPIC: Economy

Section: Monetary Policy and banking

Context- The sanctions-led withdrawal of card payments networks like Visa and Mastercard from Russia throws light on the dominance of US-based companies in the global payments ecosystem.

Concept-

• In India two UPI cost apps — Walmart-owned PhonePe and Google Pay — accounted for over two-thirds of the whole transactions recorded in the course of a month.
• Domestic card operator RuPay has emerged as the largest challenger to US majors Visa and Mastercard.
• As per the National Payments Corporation of India (NPCI), largest UPI apps include: PhonePe followed by Google Pay , Paytm Payments Bank and Amazon Pay.

About UPI:

• Unified Payments Interface is an advanced version of Immediate Payment Service (IMPS)- round–the-clock funds transfer service to make cashless payments faster, easier and smoother.
• NPCI launched UPI with 21 member banks in 2016.
• UPI is a system that powers multiple bank accounts into a single mobile application (of any participating bank), merging several banking features, seamless fund routing & merchant payments into one hood.
• UPI is currently the biggest among the National Payments Corporation of India (NPCI) operated systems including:
  • National Automated Clearing House (NACH),
  • Immediate Payment Service (IMPS),
  • Aadhaar enabled Payment System (AePS),
  • Bharat Bill Payment System (BBPS),
  • RuPay etc.
• The top UPI apps today include PhonePe, Google Pay, PayTm, Amazon Pay and BHIM, the latter being the Government offering.

RuPay Card:

• RuPay is the first-of-its-kind domestic Debit and Credit Card payment network of India.
• The name is derived from the words ‘Rupee and ‘Payment’, emphasises that it is India’s very own initiative for Debit and Credit Card payments.
• The card can also be used for transactions in Singapore, Bhutan, Nepal, UAE, Bahrain and Saudi Arabia.

National Payments Corporation of India:

• NPCI, an umbrella organisation for operating retail payments and settlement systems in India.
• It is an initiative of Reserve Bank of India (RBI) and Indian Banks’ Association (IBA) under the provisions of the Payment and Settlement Systems Act, 2007.
• It is a “Not for Profit” Company under the provisions of Section 8 of Companies Act 2013 with an intention to provide infrastructure to the entire Banking system in India for physical as well as electronic payment and settlement systems.