digital payments - mopr payement.pdf · incentive, cashback, offers and promotional schemes on...

Digital Payments

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Agenda Items

1 Introduction to Digital Payments

2. Trends in Digital Payments

3 Modes of digital Payments

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Introduction to Digital Payments

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Definition of Digital Payment

Benefits of Digital Payment

Why digital payments are required in India

Current State of Digital Payments

Definition-Digital Payments

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Digital Payment are initiated by a person by way of :

o Instruction

o Authorization

o Order to bank to debit or credit an account maintained through

electronic means.

Digital Payments - Benefits

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Convenience of use

Anytime Anywhere Any mode

Secure Transactions

Facilitate financial inclusion

Incentive, Cashback, Offers and promotional schemes on digital payments

No fear of losing cash or getting robbed or getting fake currency

No need to handle cash

Why Digital Payments are required?

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Cash to GDP ratio higher than most of the countries12.4 %

Net cost of cash ~ 1.7 % of GDP1.7 %

Currency operation cost (Printing, Currency chest, supply etc.)21K Cr

of GDP, the foregone tax revenue from shadow economy3.2%

Targeted Digital Payments

Union Budget 2017- Announcement

Mission has been set-up to achieve a target of (25 Bn) - 2500 Crore Digital Payment Txn in FY 18

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Modes of Digital Payments

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Cards

IMPS

UPI

BHIM App

AEPS

BHIM Aadhaar

*99#

BBPS

NCMC

NETC

NACH

NPCI Products for Digital Payments

Except NFS & CTSInternal -

Type of Card instruments

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Deb

it C

ard • Linked to

bank’s account. Usage at :

• ATMs, micro ATMs

• PoS

• Online Shopping (E-Commerce)

Cre

dit

Car

d • Linked to bank’s account. Usage at :

• ATMs, PoS

• Online Shopping (E-Commerce)

Pre

pai

d In

stru

men

t • Preloaded Card

• Can be recharged several times

• Can be used at PoS, Online transactions, ATMs

Debit Cards

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• Total Number of debit cards: 88 Crore .• Card schemes are : Visa , MasterCard & RuPay .• Approx. 50 Cr cards are on VISA & Master card platform.• Approx. 37 Cr cards are on Rupay platform which represents 43% of the

total debit cards . • However , only 13 % RuPay cards are used for PoS & Ecommerce

transactions.• PMJDY mandates banks to issue RuPay debit cards . There are more than

800 issuing Banks for RuPay (27 PSBs, 14 Private banks , 700+ Co operative banks & RRBs).

National Financial Switch - NPCI Impact

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Only 50 odd banks were offering ATM Cards

Customers were able to access own bank’s ATM only.

Limited no. of ATMs were getting installed- 55K till 2009

Customer migration to alternate channel was challenge for banks

Scenario before NFS

No. of ATMs now 220K + No. of Cards issued = 850 Mn + No. of ATM Txns. are showing

upward trend NPCI processes 11 Mn + Txns a

day (inter bank) Cost of Branch Operations

coming down

Post NPCI takeover of NFS

RuPay : India’s own Card

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375 Million + RuPay Debit Cards issued

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Real Time Payment Service (RTPS) Options

107.85

661

927.55

1252.88

15.36 78.44220.81

506.84

0

500

1000

1500

2000

1622.1

2013-14 2014-15 2015-16 2016-17

RTPS Channel Usage in India (in Mn)

Money Order RTGS NEFT IMPSRTPS (in Mn) 2013-14 2014-15 2015-16 2016-17

Money Order 109.14 135.2 101.85 65.15RTGS 81.1 92.78 98.34 107.85NEFT 661 927.55 1252.88 1622.1IMPS 15.36 78.44 220.81 506.84

Like Telegram- Money Order seems Vanishing by 2020Internal -

Settlement Cycle

IMPS – Immediate Payment Service

Member Banks

Service

Million Txn/Month

203

24X7

CH

AN

NEL

S

PR

OD

UC

TS P2P

P2A

ABRS

P2M

(PUSH)

M2P

(PULL)

FIR

NUUP

4

66

Mobile

*99#

Branch

ATM

Internet

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Immediate Payment Service (IMPS)

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Real-time domestic fund

transfer

24 X 7 X 365 availability

Simple, fast and easy to

use

Fast, Inexpensive,

Safe and secure

Channel Independent

AADHAAR No. based

transaction enabled

Financial and non-financial

service available

Alternate input options

Multiple access

mechanism

203 banks & non bank (PPIs) are on IMPS platform.

An innovative

“real-time” payment

service that is available

“round-the-clock” (even

on holidays) and facilitates

interbank (available with

select PPIs also), Account

to Account (or to wallets

also) fund transfer.

Unified Payment Interface-UPI

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Push and Pull Payments

Virtual Address (‘Username@PSPName’)

(No need to share Bank account details)

Transfer using Single identifier like Virtual

Address or Aadhaar No

Banks – (Payment Service Provider) will provide App to customers of any bank

One App for all transaction needs

Single Click 2 Factor Authentication

The Unified Payments Interface (UPI) offers architecture and a set of standard Application Programming Interface (API) specifications to facilitate online payments.

Prerequisites for UPI Mobile Number

Registration with Bank Active Debit Card

52 Banks are live on UPI

BHIM- Bharat Interface for Money

• Launched by the Hon’ble Prime Minister of India on 30th Dec’2016

• As of today, 50 Banks listed on BHIM and the counts are increasing

• A basic UPI app providing simple functionalities of Send and Request

money

• Provides Scan & Pay and Generate QR Code facility

• By default mobileno@upi is created with an option to create an

additional VPA of address@upi

• Transaction limit of Rs.10,000 per transaction and Rs.20,000 per day

• One Bank account can be added with a option to change the same

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BHIM/UPI Adoption

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User Profile for BHIM

Consumers

• Send Money to Friends & Family at ZERO cost

• Scan & Pay to QR code at Merchant

Shops/Neighbourhood

• Shop or Pay online by clicking on “Pay by UPI”

• Check Balance & See Transaction history

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Prerequisites for using #BHIM

Register Mobile Numbers

against their bank accounts

Active Debit Card

to set UPI PIN.

Can be done using any Debit Card

Bank Account

in any of the 50 UPI/BHIM Enabled

Banks

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BHIM/UPI Adoption

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*99# NUUP – BHIM for Feature Phone

100% Bank accounts seeding with Mobile is still a challengeInternal -

Aadhaar Enabled Payment System

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• Facilitating Aadhaar number based banking transactions• Simple , Secure and User Friendly Mode of Banking Solution• Inputs Required – Aadhaar Number, Biometric & Bank name

Bhim AADHAAR

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• Launched by Hon’ble Prime Minister of India on 14th April, 2017

• Aimed at helping people make payments digitally using their biometric

• Allows merchants to accept payments via Aadhaar Number

• Merchants have to download the App on Mobile .

BHIM Aadhaar

Facilitating Aadhaar based Banking & merchant transactions

For consumers not having access to card or mobile (not even feature phone)

Merchant Mobile

Consumer’s Aadhaar No. + Biometric

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