An overview of the Payment & Settlement Systems that undergoes as per the supervision and controlling of RBI.

2. 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 includingLatest 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

3. INTRODUCTIONINTRODUCTION
Payment 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.

4. Settlement:Settlement:
-- process of fulfilling certain contractual obligations byprocess of fulfilling certain contractual obligations by
means of paymentmeans of payment
- settlement is successful in banking when one’s account- settlement is successful in banking when one’s account
gets debited and another’s account gets creditedgets debited and another’s account gets credited
--
P1 P2
S
Q2Q1

5. Payment and Settlement systems?
•the Central Bank (RBI) formulates and regulates itsthe Central Bank (RBI) formulates and regulates its
structurestructure
•BPSS has been set up for authorizing, prescribingBPSS 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 paymentonly RBI is authorized to allow different payment
system operators to operate in Indiasystem operators to operate in India

6. PAYMENT LANDSCAPE: INDIA !!PAYMENT LANDSCAPE: INDIA !!
• Electronic payments steadily gaining popularity in the cashElectronic payments steadily gaining popularity in the cash
dominant Indian society.dominant Indian society.
• As of F.Y 2014, percentage share of cheques in retailAs of F.Y 2014, percentage share of cheques in retail
payments reduced to 35% from 66% in F.Y 2010; and sharepayments reduced to 35% from 66% in F.Y 2010; and share
of electronic payments have increased from 34% in F.Y 2010of electronic payments have increased from 34% in F.Y 2010
to 65% in F.Y 2014.to 65% in F.Y 2014.
• NPCI set up in 2009: to act as the umbrella institution for allNPCI set up in 2009: to act as the umbrella institution for all
sorts of retail payments.sorts of retail payments.
• NPCI currently handles around 18mn transactions daily.NPCI currently handles around 18mn transactions daily.

7. • Total Number of ATMs at present= 2lac approx. which isTotal Number of ATMs at present= 2lac approx. which is
around 15 ATMs per 1 lac people. Very minimal than that ofaround 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% ofInstalled 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.

8. EVOLUTION OF PAYMENT & SETTLEMENT SYSTEMS INEVOLUTION OF PAYMENT & SETTLEMENT SYSTEMS IN
INDIAINDIA
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

9. 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

10. PAYMENT LANDSCAPE: GLOBALPAYMENT LANDSCAPE: GLOBAL
• Undergoing constant transformation ever since first ATM launched in US inUndergoing constant transformation ever since first ATM launched in US in
1969.1969.
• Growth of domestic card schemes like CUP of China, ELO of Brazil, and ourGrowth of domestic card schemes like CUP of China, ELO of Brazil, and our
very own RuPay pose tough competition to global card schemes andvery own RuPay pose tough competition to global card schemes and
network.network.
• Around 7.7 bn bank cards will be issued by domestic card issuers by end ofAround 7.7 bn bank cards will be issued by domestic card issuers by end of
year 2017.year 2017.
• Stored-value cards and e-wallets such as m-Pesa and Paytm are some successStored-value cards and e-wallets such as m-Pesa and Paytm are some success
stories.stories.
• Google-wallet, Apple Pay signifies entry of social sites and tech cos. Into theGoogle-wallet, Apple Pay signifies entry of social sites and tech cos. Into the
payments sector.payments sector.

11. 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 banksStarted with 10 core promoter banks, but soon going to add 50 new banks
as its shareholders.as its shareholders.
• CTS : reduced the time for clearing of cheques through Clearing Houses;CTS : reduced the time for clearing of cheques through Clearing Houses;
gets cleared in T+1 days; 3 Grids: 66 MICR centers.gets cleared in T+1 days; 3 Grids: 66 MICR centers.
• NACH : centralised clearing house for all ECS transactions; NACH Debit &NACH : centralised clearing house for all ECS transactions; NACH Debit &
NACH Credit; NACH Debit: efficient mandate-based debit services by useNACH Credit; NACH Debit: efficient mandate-based debit services by use
of UMRN; NACH Credit: creates only a single debit in user institution’sof UMRN; NACH Credit: creates only a single debit in user institution’s
bank account and provides credit (pension, salary etc.) to beneficiaries.bank account and provides credit (pension, salary etc.) to beneficiaries.

12. • NFS: ATMs across the country get connected via this switch; it has 470NFS: ATMs across the country get connected via this switch; it has 470
Banks and connected to approx 2.03 lac ATMs.Banks and connected to approx 2.03 lac ATMs.
• APBS: applicable in DBT schemes based on Aadhaar Card Numbers;APBS: applicable in DBT schemes based on Aadhaar Card Numbers;
bulk payment systembulk payment system
• NUUSD: does not require any app to be downloaded or have GPRSNUUSD: 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, interneteKYC: electronic Aadhaar based KYC; workable on mobile, PC, internet
based channels.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.

13. 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 gatewaynation in the world to have a domestic payment gateway
•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 banksIssued 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

14. 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 theObtain 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 fromPNB tied up with Xoom Corp. for instant transfer of funds from
US to India using IMPS facilityUS to India using IMPS facility
• 107 member banks107 member banks

15. INNOVATIVE PAYMENT MODELS AROUND THEINNOVATIVE PAYMENT MODELS AROUND THE
WORLDWORLD
• m-Pesa of Kenyam-Pesa of Kenya
• China Union Pay (CUP)China Union Pay (CUP)

16. LATEST DEVELOPMENTS IN THE PAYMENT SCENARIOLATEST DEVELOPMENTS IN THE PAYMENT SCENARIO
GLOBALLY INCLUDING INDIAGLOBALLY INCLUDING INDIA
• VenmoVenmo
• PayPalPayPal
• PingPay of Axis BankPingPay of Axis Bank
• KayPayKayPay
• icicibankPayicicibankPay

17. One of the main objective of project was toOne of the main objective of project was to
check the performance of transactions undercheck the performance of transactions under
NEFT by 15 selected major banks for threeNEFT by 15 selected major banks for three
financial yearsfinancial years

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

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

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

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

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

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

28. TRIPARTITE MODELTRIPARTITE MODEL
• Solace to patients, Relief to hospitals & triggering RuPay’s revenue
generation.