- May 9, 2022
- Posted by: OptimizeIAS Team
- Category: DPN Topics
Section: Monetary policy
The electronic payments industry is dominated by four companies. Visa, Mastercard, American Express, and Discover are responsible for handling the majority of the world’s card payments.Visa and Mastercard are the two largest payment processing networks in the world. However they do not issue cards directly to the public, as Discover and American Express do, but rather through member financial institutions.
Other Methods of payments:
RuPay is an Indigenously developed Payment System – RuPay supports the issuance of debit, credit and prepaid cards by banks in India and thereby supporting the growth of retail electronic payments in India. All RuPay Cards will now have the functionality of NCMC which can enable low value contactless payments (like transit, toll, parking, retail) using Offline technology.
- Immediate Payment Service (IMPS)
IMPS provides robust & real time fund transfer which offers an instant, 24X7, inter bank electronic fund transfer service that could be accessed on multiple channels like Mobile, Internet, ATM, SMS. IMPS is an emphatic service which allows transferring of funds instantly within banks across India which is not only safe but also economical. Currently on IMPS, 647 members are live which includes banks & PPIs. This facility is provided by NPCI through its existing NFS switch.
- National Automated Clearing House (NACH)
It is an offline web based system for bulk push and pull transactions. NACH provides an electronic mandate platform to register mandates facilitating paperless collection processes for the corporates and banks. It provides for both account based and Aadhaar based transactions.
- Aadhaar Payment Bridge (APB) System
It is helping the Government and Government agencies in making the Direct Benefit Transfers for various Central as well as State sponsored schemes.
- Ahaar enabled payment system AePS
AePS is a bank led model which allows online interoperable financial inclusion transaction at PoS (MicroATM) through the Business correspondent of any bank using the Aadhaar authentication. AePS allows you to do six types of transactions.The only inputs required for a customer to do a transaction under this scenario are:-
- Bank Name
- Aadhaar Number
- Fingerprint captured during enrollment.
- National Financial Switch (NFS)
Itis the largest network of shared Automated Teller Machines (ATMs) in India facilitating interoperable cash withdrawal, card to card funds transfer and interoperable cash deposit transactions among other value added services in the country.
- Unified Payments Interface (UPI)
It 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. It also caters to the “Peer to Peer” collect request which can be scheduled and paid as per requirement and convenience.
- Bharat Interface for Money (BHIM)
It is an app that lets you make simple, easy and quick payment transactions using Unified Payments Interface (UPI). You can make instant bank-to-bank payments and Pay and collect money using just a Mobile number or Virtual Payment Address (UPI ID).
- Bharat Bill Payment System
It is a Reserve Bank of India (RBI) conceptualized system driven by National Payments Corporation of India (NPCI). It is a one-stop ecosystem for payment of all bills providing an interoperable and accessible “Anytime Anywhere” Bill payment service to all customers across India with certainty, reliability and safety of transactions.
- National Electronic Toll Collection (NETC) program
It provides an electronic payment facility to customers to make the payments at national, state and city toll plazas by identifying the vehicle uniquely through a FASTag. FASTag are Radio-Frequency Identification (RFID) stickers which are affixed on the vehicle windshield and enable the driver to make toll payments electronically while the vehicle is in motion without stopping at the Toll plazas by saving Fuel and Time.
National Payments Corporation of India (NPCI), an umbrella organisation for operating retail payments and settlement systems in India, 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, for creating a robust Payment & Settlement Infrastructure in India.
It has been incorporated as a “Not for Profit” Company under the provisions of Section 25 of Companies Act 1956 (now 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. The Company is focused on bringing innovations in the retail payment systems through the use of technology for achieving greater efficiency in operations and widening the reach of payment systems.
New Umbrella Entity:
The umbrella entity shall be a Company incorporated in India under the Companies Act, 2013 and may be a ‘for-profit’ or a Section 8 Company as may be decided by it. It shall be authorized by Reserve Bank of India (RBI) under Section 4 of the PSS Act, 2007. It shall be governed by the provisions of the PSS Act and other relevant statutes and directives, prudential regulations and other guidelines / instructions.
All entities eligible to apply as promoter / promoter group of the umbrella entity shall be owned and controlled by resident Indian citizens’ [as defined in the rules / regulations framed under the Foreign Exchange Management Act, 1999 (FEMA), as amended from time to time] with 3 years’ experience in the payments ecosystem as Payment System Operator (PSO) / Payment Service Provider (PSP) / Technology Service Provider (TSP)2. The shareholding pattern shall be diversified. Any entity holding more than 25% of the paid-up capital of the umbrella entity shall be deemed to be a Promoter.
The umbrella entity shall have a minimum paid-up capital of ₹500 crore. No single Promoter / Promoter Group shall have more than 40% investment in the capital of the umbrella entity.
The scope of activities of the umbrella entity shall be as follows:
- Set-up, manage and operate new payment system(s) in the retail space comprising of but not limited to ATMs, White Label PoS; Aadhaar based payments and remittance services; newer payment methods, standards and technologies; monitor related issues in the country and internationally; take care of developmental objectives like enhancement of awareness about the payment systems.
- Operate clearing and settlement systems for participating banks and non-banks; identify and manage relevant risks such as settlement, credit, liquidity and operational and preserve the integrity of the system(s); monitor retail payment system developments and related issues in the country and internationally to avoid shocks, frauds and contagions that may adversely affect the system(s) and / or the economy in general.
- Fulfill its policy objectives and ensure that principles of fairness, equity and competitive neutrality are applied in determining participation in the system; frame necessary rules and the related processes to ensure that the system is safe and sound, and that payments are exchanged efficiently.
- Carry on any other business as suitable to further strengthen the retail payments ecosystem in the country. It is expected that the umbrella entity shall offer innovative payment systems to include hitherto excluded cross-sections of the society and which enhance access, customer convenience and safety and the same shall be distinct yet interoperable.
- It is also expected to interact and be interoperable, to the extent possible, with the systems operated by NPCI.
- The umbrella entity may be permitted to participate in Reserve Bank’s payment and settlement systems, including having a current account with Reserve Bank, if required.
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