~ Kamzalian Tomging
In an interior village of Bihar, a dying grand old man needed money. His only asset was a simple mobile phone handed down to him by his son. With no balance on his prepaid phone to his credit he made a much needed missed call to his son who was in Mumbai, the financial capital of India. His son calls back at the first instance of his free time and learnt that, his father was in need of urgent money. With the help of mobile app he remit the money then and there. The money was immediately delivered to his father by a business correspondent in the village.
A roadside vendor selling her vegetables, had no proper place to keep her earnings from her sales. Apart from safety issue, the nature of her role resulted in soiled notes. She recently found a solution to her problem which is safe, secured and devoid of all cash handling. She would simply put up a notice with her mobile number and special ID code in front of her wares wherein buyer can easily pay/transfer the money to her without actual cash.
Mungsuan, a tech savvy guy in Bangaluru was browsing an online retail store. After eyeing the dream wrist watch he wanted for his sister Kim, he checked out his shopping cart with his RuPay. His joy knew no bounds when he was informed that the product will be delivered within the evening to his sister in Delhi. Perfect arrangement of Birthday gifts for people in different geographical location.
These are nothing but the products of National Payments Corporation of India (NPCI). Born out of IBA's untiring efforts to turn the vision document of Reserve Bank of India for setting up an umbrella institution for all the retail payment systems in the country, NPCI is a Section 8 company under the Companies Act, 2013 incorporated in December 2008 to operate for the benefit of all the member banks and their customers with an aim towards financial inclusion.
The authorized capital has been pegged at Rs.300 crore with a paid up capital of Rs.100. There are ten core promoter banks viz. State Bank of India, Punjab National Bank, Canara Bank, Bank of Baroda, Union bank of India, Bank of India, ICICI Bank, HDFC Bank, Citibank and HSBC. Though domestic in nature, the swirling logo indicates global presence in partnership with Discover Financial Services. Discover Financial Services, Inc. is an American financial services company, which operates the Discover and Pulse networks overseas. NPCI is now a large transaction processing company with more than 14o lakh transactions a day and is building a capacity to process 10 crore a day with a goal set to ‘touching every Indian by 2020’.
NPCI has already undertaken many initiatives like
1.National Financial Switch, NFS which facilitates everyday inter-bank ATM transactions.
2. Immediate Payment system, IMPS for instant remittance/transfer of money in multi-channel, multi-dimensional platform which can be initiated from mobile, internet and ATM channel.
3. RuPay, Rupee Payment- A domestic, open-loop multilateral systems which enables banks and FIs participation in card-based electronic payment.
4. Cheque Truncation System, CTS is a faster, secure T+1 clearing for Cheques presented anywhere in India.
5. National Automated Clearing House, NACH for centralizing the multiple ECS systems in the country.
6. Aadhaar Enabled Payment System, AEPS-online operability of financial transactions at PoS through business correspondence of any bank using Aadhaar authentication.
Immediate Payment Service (IMPS)
IMPS is an instant, 24x7, cost effective, secured channel independent retail payment service empowering customers to transfer funds for any personal or commercial purpose. Launched in November, 2010 it has now evolved as a multi-channel, multi-dimensional remittance platform. It has done away the problem of real time settlement of NEFT wherein the transactions are processed and settled in batches done only during the working hours of the RTGS system, and hence not real time. The IMPS works with MMID and a security code call MPIN. Mobile Money Identifier, MMID is a 7 digit code, issued by bank is a unique identity of an individual. Different MMID’s can be conveniently linked to the same Mobile Number. IMPS transactions can be initiated from Mobile, Internet & ATM channels. In addition to banking customers, non-banking customers can also avail the IMPS facility through RBI approved Prepaid payment Instrument (PPI). The six PPIs as on date are Oxicash, Airtel Money, m-Pesa of Vodafone, GI Cash, Itz Cash, and UAE Exchange with a daily average volume of 1,50,000+ financial transactions. This facility is provided by NPCI through its existing NFS switch with banks having a Mobile Banking Service.
The various channels of Fund transfer/Remittance through IMPS are:
1) Using Mobile number & MMID (P2P)
Money can be remitted by sending simple sms using basic mobile phone. The format is [IMPS] [Beneficiary Mobile number] [Beneficiary MMID] [Amount] [MPIN] for eg. IMPS 9869048414 9214025 3500 1729. It can also be initiated through mobile apps.
2) Using Account number & IFS Code (P2A)
This is the cases where Remitter is enabled on Mobile Banking, but Beneficiary mobile number is not registered with any bank account. In such cases, Remitter use the Beneficiary account number and IFSC of the bank.
3) Using Aadhaar number alone (ABRS)
In ABRS, a remitter initiates IMPS transaction using the beneficiary’s AADHAAR number alone which has been linked to the beneficiaries account number. Another important utility of this service is in disbursal of subsidy payment i.e. Electronic Benefit Transfer (EBT)/ Direct Benefit transfer (DBT), Student scholarship, Old Age Pension, 30+ Welfare Schemes of Central & State Governments, etc. through the Aadhaar Payment Bridge (APB) System. Aadhaar based Remittance Service (ABRS) is expected to catalyst in expanding financial Inclusion reach.
4) Query Service on Aadhaar Mapper (QSAM)
National Unified USSD Platform (NUUP) is introduced based on the existing Unstructured Supplementary Service Data (USSD) based platform. The special (magic) code number adopted under NUUP *99#, which is similar to balance checking in a prepaid mobile phone, will redefine mobile banking in India. This service allows every customer access banking services with a single number across all banks, irrespective of the telecom service provider (currently available with MTNL & BSNL), mobile handset make or the region that they reside in. Under this new service, known as “Query Service on Aadhaar Mapper” customer check whether his/her AADHAAR number has been linked to his/her bank account.
Appropriate existing two-factor authentication method is used for all the channels. The transaction limit as prescribed by the bank for these channels would apply while transferring money. For transactions initiated using Mobile, transactions will be authenticated by mobile number & MPIN. For ATM channel it is the Card + ATM PIN. Likewise for internet channel it is the User ID + Internet Banking Password/Transaction Password. Funds Transfer through IMPS can be made for services like Donations, Utility Bill Payment and Online Shopping. It is a session based transaction and therefore nothing is store on the channels being in used.
Our very own RuPay
“RuPay” is a coinage of two terms Rupee and Payment launched to tap the huge potential of card payment network dedicated to the nation on 8 May 2014 by President Pranab Mukherjee. It is a user friendly and smooth adaptability card like Visa or Mastercard which operates under simplified architecture reducing transaction time. It can be used at all ATMs, merchant establishments and online transactions. This offers enhanced security measures in addition to the RBI mandated 2-Factor authentication viz. registration, OTP, image based authentication and anti-phishing measures.
During the first transaction on e-merchant websites, customers have to select an image and enter a phrase to register his RuPay card for online usage. In subsequent transactions, customer will have to identify the correct registered image and phrase which self-protect against anti-phishing. In case the customer forgets or exceeds the number of attempts for image selection they will need to wait till next business day to try again or re-register to enter new phrase and select a new image. Customer is then required to enter valid PIN on the pad using mouse clicks for authorization of the e-Commerce transactions.
The various types of RuPay card are RuPay Debit card, EVM chip card, Kisan card, Prepaid card. As on date, 26 Public Sector Banks, 9 Private Banks, and 203 Cooperative and Gramin Banks are under using RuPay.
Why ICT enabled financial transactions?
Father of the nation Mahatma Gandhi said, ‘India does not live in its towns but in its villages’. As per Census 2011, 77% of our population live in rural areas and nearly 51% farmer households do not have access to bank credit. Incidentally remittances upto 10 cr is remitted by migrant workers who contribute 10% to GDP with an average annual remittance of Rs.20,000 cr.
Shri A P Hota, MD & CEO, NPCI indicated that there is a 7000USD crore payment industry with 88% mobile penetration wherein access of internet through mobile stands at 55%. TRAI reported that the total telecom subscriptions in the country as on 30 June 2013 is 90.309 crore. There are 1,52,000 BCs deployed for 18 cr number of transactions of Rs. 16,500 cr value of transactions having about Rs. 916 per transaction.
The only way out to cater to these is ICT based financial products with its Easy KYC norms and convenient delivery channels. Technology minimizes need of physical branches and manpower, and also improves efficiency in the system. To speed up this movement, NABARD is facilitating the process of bringing RRBs and CCBs into Core Banking System (CBS) platform and also helps in RuPay KCC implementation. It had taken 58 RRBs, 370 DCCBs under CBS with a total financial assistance sanctioned of Rs. 32.02 crore for issuance of 52 Lakh RuPay Kisan Cards and installation of 9,987 PoS/ Micro ATMs.
The value of banknotes and coins in circulation is at 12.04% of GDP and only 3% of financial transactions are done electronically thereby Rs.2800 crores is spend to print these currency notes. This means that with more electronic transaction, there will be a huge saving. Less cash with citizens which means more cash with Banks for better use. It may also be interpreted as Less Cash with Citizens = Less Corruption = Less Black Money.