NPCI and the magic code ~ Mr. 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.

Mungsuan, a tech savvy guy in Bengaluru 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
- National Financial Switch, NFS which facilitates everyday inter-bank ATM transactions.
- 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.
- RuPay, Rupee Payment- A domestic, open-loop multilateral systems which enables banks and FIs participation in card-based electronic payment.
- Cheque Truncation System, CTS is a faster, secure T+1 clearing for Cheques presented anywhere in India.
- National Automated Clearing House, NACH for centralizing the multiple ECS systems in the country.
- 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.
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