Payment Systems in India
Bharat Bill Payments System:
With the increase in e-commerce sites in India, people also like to buy products online and pay for them online only through debit cards, credit cards, netbanking and some platforms. Under the retail payment transactions, bill payments like electricity, water, phone bills, etc. also form a major component.
With a need of bill payments system, various organizations decided to provide a single platform to make all these payments. So an integrated bill payment system called Bharat Bill Payment System (BBPS) was proposed for which the policy guidelines were issued by the Reserve Bank of India on November 28, 2014.
National Payment Corporation of India (NPCI) had been identified to act as Bharat Bill Payment Central Unit (BBPCU) which will be a single authorized entity for operating the BBPS. The BBPCU will set necessary operational, technical and business standards for the entire system and its participants, and also undertake clearing and settlement activities. It will work only as a medium to connect multiple billers and agents through various Operating Units.
BBPS will operate on entities called Bharat Bill Payments Operating Unit (BBPOU). BBPOU will be authorised operational entities, which can fulfill the standards set by the BBPCU for facilitating bill payments online as well as through a network of agents, on the ground. Banks and non-bank entities presently engaged in any of the above bill payment activities falling under the scope of BBPS can apply for approval from RBI under the Payment and Settlement Systems (PSS) Act 2007.
Some facts about BBPS:
- The biggest advantage is that the bill can be paid anywhere and anytime.
- The system will provide multiple payment modes and instant confirmation of payment.
- Payments may be made through the BBPS using cash, transfer cheques, and electronic modes.
- Retail points will be set up for bill payments across the country who would be able to accept all kinds of bills payments made through credit cards, debit cards, mobile wallets, net banking (IMPS, NEFT).
- The BBPS outlets would include banks, ATMs, business correspondents, kiosks etc.
- Payments would be made securely through the NPCI network with instant receipts getting generated.
- PayU India is the first non-bank entity which got RBI approval to set up and operate Bharat Bill Payment System (BBPS).
Immediate Payment Service (IMPS):
Immediate Payment Service (IMPS) is a tool through which one can transfer money instantly within banks across India through mobile, internet and ATMs which is not only safe but also economical both in financial and non-financial perspectives. This facility is available 24x7x365. The IMPS facility is provided by National Payments Corporation of India (NPCI).
Why IMPS was started?
Before IMPS system, the transactions could be done either by NEFT or by RTGS. And this can also happen in NEFT and RTGS working hours. So NPCI along with some banks like SBI, BOI, UBI and ICICI in 2010 conducted a pilot study to create a system that works 24×7. As a result, IMP public launch happened on 22nd November 2010 by Smt. Shyamala Gopinath, DG RBI at Mumbai and this service is now available to the Indian public.
The participants for IMPS are:
- Remitter (Sender)
- Beneficiary (Receiver)
- Banks
- National Financial Switch by NPCI
Objectives of IMPS
- To be customer friendly so that customers do not have to wait for tomorrow to make remittances.
- To make the payment simpler just with the use of mobile number.
- To achieve digitization in doing retail payments.
- To build the foundation for a full range of mobile based Banking services.
Some important facts:
- The bank should have an approval from RBI for Mobile Banking Service to be eligible to participate in IMPS.
- Customer should do Mobile Banking Registration if he wants to transact through mobile.
- The customer gets a unique Mobile Money Identifier (MMID) which is one of the inputs to start the transaction. It is a 7 digit number issued by banks.
- Every mobile phone be it a basic phone or smartphone is eligible for IMPS.
- There is no need of bank account to avail IMPS.
- More than one account can be linked to single mobile number.
- The recipient is not required to register for IMPS.
- Individual banks can also charge money for IMPS as per bank policy.
NEFT & RTGS:
The two popular systems NEFT and RTGS for funds transfer are explained in this article.
NEFT
National Electronic Funds Transfer (NEFT) is a nation-wide payment system facilitating one-to-one funds transfer. Under this Scheme, individuals, firms and corporates can electronically transfer funds from any bank branch to any individual, firm or corporate having an account with any other bank branch in the country participating in the Scheme.It is an electronic fund transfer system that operates on a Deferred Net Settlement (DNS) basis which settles transactions in batches. By the word ‘batches’ it mean that instructions received for transferring the money will not be done as soon the request is received. So, the settlement takes place with all transactions received till the particular cut-off time.
In NEFT system, presently there are hourly batches – there are twelve settlements from 8 am to 7 pm on week days and six settlements from 8 am to 1 pm on Saturdays. This can be explained by an
example: If you submit your request of transfer of payment at say, 1: 10 PM on any of the week day, the settlement will get started at next batch i.e. 2 PM to 3 PM batch along with all the requests which were submitted in the 1 PM to 2 PM batch.
- Not every bank can transfer or receive money through NEFT system. For this the bank should be NEFT enabled. A list of NEFT enabled bank branches is available on RBI website, and also you can obtain this information from your bank.
- There is no minimum or maximum limit for opting for a NEFT payment system. However, if you do not have an account in a bank, then you can only transfer up to Rs 50,000 per transaction.
- NEFT payment system is also available to transfer funds to Nepal under Indo-Nepal Remittance Facility scheme. While transferring funds to Nepal, there is a maximum limit of Indian Rupees 50,000 and the beneficiary in Nepal will get them in Nepalese Rupees. Any customer of bank or walk-in-customer can do a transfer of up to Rs 50,000 to Nepal.
- Banks charge Processing Charges / Service Charges for NEFT transaction.
Details you need to give while requesting for NEFT transfer:
- Your bank account number with bank, so that bank can debit amount from that account.
- The amount to be remitted.
- Beneficiary’s name.
- Beneficiary’s bank’s and branch’s name (Bank branch should be NEFT enabled).
- Beneficiary’s account number.
- IFS code of bank branch of beneficiary. (IFS Code of all bank branches is available on RBI website)
RTGS
The acronym ‘RTGS’ stands for Real Time Gross Settlement. Real Time means that the processing of instructions start at same time when they are received and not at some later time. Gross settlement means that the settlement of funds transfer instructions occurs individually (on an instruction by instruction basis).
- Not every bank can transfer or receive money through RTGS system. For this the bank should be RTGS enabled. A list of RTGS enabled bank branches is available on RBI website, and also you can obtain this information from your bank.
- So this is in contrast with the NEFT system in which settlements take place in batches.
- In contrast with NEFT system, there is a minimum limit of Rs 2,00,000 to be transferred through RTGS. Though there is no maximum limit.
- Banks charge Processing Charges / Service Charges for RTGS transaction.
Details you need to give while requesting for RTGS transfer:
- Your bank account number with bank, so that bank can debit amount from that account.
- The amount to be remitted.
- Beneficiary’s name.
- Beneficiary’s bank’s and branch’s name (Bank branch should be NEFT enabled).
- Beneficiary’s account number.
- IFS code of bank branch of beneficiary. (IFS Code of all bank branches is available on RBI website)
0 comments:
Post a Comment