ROADMAPROADMAP• Introduction.Introduction.

• Payment Landscape: India & GlobalPayment Landscape: India & Global

• Evolution of Payment and Settlement Systems in India!!Evolution of Payment and Settlement Systems in India!!

• NPCI: offering different platforms for paymentsNPCI: offering different platforms for payments

• RuPay: say goodbye to MasterCard and VisaRuPay: say goodbye to MasterCard and Visa

• IMPS: instant funds transferIMPS: instant funds transfer

• Innovative Payment Models around the worldInnovative Payment Models around the world

• Latest developments in the payment scenario globally including Latest developments in the payment scenario globally including IndiaIndia

• NEFT and RTGS transactions over three financial yearsNEFT and RTGS transactions over three financial years

• Proposed TRIPARTITE MODELProposed TRIPARTITE MODEL

INTRODUCTIONINTRODUCTIONPayment v/s SettlementPayment v/s Settlement

Payments:- something that is paid to someone in return for goods or services

- traditionally cheques, drafts etc. paid in lieu of cash

- various payment methods have evolved with time

- payment methods now can used for transactions in equity markets, bond markets, currency markets etc.

Settlement:Settlement:- - process of fulfilling certain contractual obligations by process of fulfilling certain contractual obligations by

means of paymentmeans of payment- settlement is successful in banking when one’s - settlement is successful in banking when one’s

account gets debited and another’s account gets creditedaccount gets debited and another’s account gets credited- -

P1 P2

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Payment and Settlement systems?

•the Central Bank (RBI) formulates and regulates its the Central Bank (RBI) formulates and regulates its structurestructure

•BPSS has been set up for authorizing, prescribing BPSS has been set up for authorizing, prescribing policies and setting standardspolicies and setting standards

• DPSS executes the directions of BPSSDPSS executes the directions of BPSS

•only RBI is authorized to allow different payment only RBI is authorized to allow different payment system operators to operate in Indiasystem operators to operate in India

PAYMENT LANDSCAPE: PAYMENT LANDSCAPE: INDIA !!INDIA !!

• Electronic payments steadily gaining popularity in the cash Electronic payments steadily gaining popularity in the cash dominant Indian society.dominant Indian society.

• As of F.Y 2014, percentage share of cheques in retail As of F.Y 2014, percentage share of cheques in retail payments reduced to 35% from 66% in F.Y 2010; and share payments reduced to 35% from 66% in F.Y 2010; and share of electronic payments have increased from 34% in F.Y of electronic payments have increased from 34% in F.Y 2010 to 65% in F.Y 2014.2010 to 65% in F.Y 2014.

• NPCI set up in 2009: to act as the umbrella institution for NPCI set up in 2009: to act as the umbrella institution for all sorts of retail payments. all sorts of retail payments.

• NPCI currently handles around 18mn transactions daily.NPCI currently handles around 18mn transactions daily.

• Total Number of ATMs at present= 2lac approx. which is Total Number of ATMs at present= 2lac approx. which is around 15 ATMs per 1 lac people. Very minimal than that of around 15 ATMs per 1 lac people. Very minimal than that of BRIICS countries where per 1 lac people, the figures are 130, BRIICS countries where per 1 lac people, the figures are 130, 120,50 and 62.120,50 and 62.

• Installed 1.1 million POS terminals constitute less than 10% of Installed 1.1 million POS terminals constitute less than 10% of the 14mn merchants in India.the 14mn merchants in India.

• e-commerce sector set to touch 137 bn by 2020.e-commerce sector set to touch 137 bn by 2020.

EVOLUTION OF PAYMENT & SETTLEMENT SYSTEMS EVOLUTION OF PAYMENT & SETTLEMENT SYSTEMS IN INDIAIN INDIA

1980 MICR was introduced to mechanise the cheque clearing system

1990s ECS and EFT were introduced, thus permitting issuance of Credit and Debit cards

1996 Institute for Development & Research in Banking Technology (IDRBT) was set-up for technical upgradation and developing a reliable network

2001 Clearing Corporation of India Limited (CCIL) was set-up by banks, financial institutions and primary dealers

2003 National Financial Switch (NFS) was introduced for interconnectivity of ATMs across the country

2004 Core Banking Systems (CBS) was introduced by banks, and alongside RTGS and NEFT were introduced by RBI

2007 Payment and Settlement Systems Act (PSS Act, 2007) came into existence

2008 Cheque Truncation System (CTS) was introduced, and alongside the National Payments Corporation of India (NPCI) was also set-up

2009 Introduction of 2nd factor authentication : “Card Not Present”, the first of its kind in the world

2010 Immediate Payment Service (IMPS) was introduced by NPCI

2012 NPCI launched RuPay, the domestic card payment network

2014 RuPay Card was dedicated to India by President Pranab Mukherjee on 8th of May, 2014

2008-15 Improvising of payment infrastructure through creation of AEPS, APBS, NACH, NUUP

PAYMENT LANDSCAPE: GLOBALPAYMENT LANDSCAPE: GLOBAL• Undergoing constant transformation ever since first ATM launched in Undergoing constant transformation ever since first ATM launched in

US in 1969.US in 1969.

• Growth of domestic card schemes like CUP of China, ELO of Brazil, and Growth of domestic card schemes like CUP of China, ELO of Brazil, and our very own RuPay pose tough competition to global card schemes our very own RuPay pose tough competition to global card schemes and network.and network.

• Around 7.7 bn bank cards will be issued by domestic card issuers by Around 7.7 bn bank cards will be issued by domestic card issuers by end of year 2017.end of year 2017.

• Stored-value cards and e-wallets such as m-Pesa and Paytm are some Stored-value cards and e-wallets such as m-Pesa and Paytm are some success stories.success stories.

• Google-wallet, Apple Pay signifies entry of social sites and tech cos. Google-wallet, Apple Pay signifies entry of social sites and tech cos. Into the payments sector.Into the payments sector.

NPCI: OFFERING DIFFERENT PLATFORMS FOR PAYMENTSNPCI: OFFERING DIFFERENT PLATFORMS FOR PAYMENTS

• A Section 8 Company under Companies Act,2013.A Section 8 Company under Companies Act,2013.• Started with 10 core promoter banks, but soon going to add 50 new Started with 10 core promoter banks, but soon going to add 50 new

banks as its shareholders.banks as its shareholders.• CTS : reduced the time for clearing of cheques through Clearing CTS : reduced the time for clearing of cheques through Clearing

Houses; gets cleared in T+1 days; 3 Grids: 66 MICR centers.Houses; gets cleared in T+1 days; 3 Grids: 66 MICR centers.• NACH : centralised clearing house for all ECS transactions; NACH NACH : centralised clearing house for all ECS transactions; NACH

Debit & NACH Credit; NACH Debit: efficient mandate-based debit Debit & NACH Credit; NACH Debit: efficient mandate-based debit services by use of UMRN; NACH Credit: creates only a single debit services by use of UMRN; NACH Credit: creates only a single debit in user institution’s bank account and provides credit (pension, in user institution’s bank account and provides credit (pension, salary etc.) to beneficiaries.salary etc.) to beneficiaries.

• NFS: ATMs across the country get connected via this switch; it has NFS: ATMs across the country get connected via this switch; it has 470 Banks and connected to approx 2.03 lac ATMs.470 Banks and connected to approx 2.03 lac ATMs.

• APBS: applicable in DBT schemes based on Aadhaar Card APBS: applicable in DBT schemes based on Aadhaar Card Numbers; bulk payment systemNumbers; bulk payment system

• NUUSD: does not require any app to be downloaded or have GPRS NUUSD: does not require any app to be downloaded or have GPRS connectivity to enjoy USSD solutionconnectivity to enjoy USSD solution

• eKYC: electronic Aadhaar based KYC; workable on mobile, PC, eKYC: electronic Aadhaar based KYC; workable on mobile, PC, internet based channels.internet based channels.

• White Label ATMs: around 7000 WLA s of 7 WLAOs are at present.White Label ATMs: around 7000 WLA s of 7 WLAOs are at present.

RUPAY: SAY GOODBYE TO MASTERCARD AND VISARUPAY: SAY GOODBYE TO MASTERCARD AND VISA

•Only the 6Only the 6thth nation in the world to have a domestic payment nation in the world to have a domestic payment gatewaygateway•More than 170 mn RuPay cards have been issued till dateMore than 170 mn RuPay cards have been issued till date•Issued by more than 400 banks Issued by more than 400 banks •Usable in 12 lac+ PoS terminals & 30,000+ e-com merchantsUsable in 12 lac+ PoS terminals & 30,000+ e-com merchants•Partnered with JCB International for global usagePartnered with JCB International for global usage•Nearly 13% of all transactions are done via RuPay Debit cardsNearly 13% of all transactions are done via RuPay Debit cards•RuPay Credit Cards will be launched in 2016RuPay Credit Cards will be launched in 2016

IMPS: INSTANT FUNDS TRANSFERIMPS: INSTANT FUNDS TRANSFER

• It is a 24*7 inter-bank electronic fund transfer serviceIt is a 24*7 inter-bank electronic fund transfer service• Obtain MMID and MPIN from the bank: then download the Obtain MMID and MPIN from the bank: then download the

required Application for using the service to remit moneyrequired Application for using the service to remit money• The beneficiary should also obtain the MMID from the bankThe beneficiary should also obtain the MMID from the bank• Minimum value: Re.1/- ; Maximum value Rs. 2 lac/-Minimum value: Re.1/- ; Maximum value Rs. 2 lac/-• PNB tied up with Xoom Corp. for instant transfer of funds PNB tied up with Xoom Corp. for instant transfer of funds

from US to India using IMPS facilityfrom US to India using IMPS facility• 107 member banks107 member banks

INNOVATIVE PAYMENT MODELS AROUND THE INNOVATIVE PAYMENT MODELS AROUND THE WORLDWORLD

• m-Pesa of Kenya m-Pesa of Kenya

• China Union Pay (CUP)China Union Pay (CUP)

LATEST DEVELOPMENTS IN THE PAYMENT SCENARIO LATEST DEVELOPMENTS IN THE PAYMENT SCENARIO GLOBALLY INCLUDING INDIAGLOBALLY INCLUDING INDIA

• VenmoVenmo

• PayPalPayPal

• PingPay of Axis BankPingPay of Axis Bank

• KayPayKayPay

• icicibankPayicicibankPay

One of the main objective of project was One of the main objective of project was to check the performance of transactions to check the performance of transactions under NEFT by 15 selected major banks under NEFT by 15 selected major banks for three financial yearsfor three financial years

NEFT PERFORMANCE OVER LAST THREE FINANCIAL YEARS: NEFT PERFORMANCE OVER LAST THREE FINANCIAL YEARS: JULY 2012 TO JUNE 2015JULY 2012 TO JUNE 2015

•NEFT projections: Outward Debit comparisons of transaction NEFT projections: Outward Debit comparisons of transaction amount in Rs. Crore.amount in Rs. Crore.

• NEFT projections: Inward Credit comparisons of transaction NEFT projections: Inward Credit comparisons of transaction amount in Rs. Crore.amount in Rs. Crore.

RTGS PERFORMANCE OVER LAST THREE FINANCIAL YEARS: RTGS PERFORMANCE OVER LAST THREE FINANCIAL YEARS: JULY 2012 TO JUNE 2015JULY 2012 TO JUNE 2015

• RTGS projections: Comparisons of Outward transaction amount in RTGS projections: Comparisons of Outward transaction amount in Rs. Crore.Rs. Crore.

• Mobile Banking projections: Compariosns for transaction Mobile Banking projections: Compariosns for transaction amount (in Rs.’000)amount (in Rs.’000)

TRIPARTITE MODELTRIPARTITE MODEL• Solace to patients, Relief to hospitals & triggering

RuPay’s revenue generation.