International Expansion of RuPay card & UPI recommends by Nilekani-led committee

International Expansion of RuPay card & UPI recommends by Nilekani-led committee:

An RBI-appointed panel set up to review the status of digital payments in January recently submitted its report, in which it said that the Reserve Bank of India (RBI) and the government must target 10X growth in the volume of digital payments in the next three years. This growth will be driven by a shift from high-value, low-volume, high-cost transactions to low-value, high-volume, low-cost transactions, said the five-member panel, headed by Nandan Nilekani. Initiatives such as removing transaction charges on digital payments made to government, simplying KYC processes, and reducing KYC costs for banks are among the committee’s 73 recommendations.

Few recommendations mentioned here:

1) NPCI must put together an Internationalisation plan for Indian payment systems such as RuPay and BHIM UPI to ease remittances into India and to help Indian travellers make payments abroad. The BHIM UPI protocol and RuPay must be considered for standardisation.

2) Enable Kisan Credit Cards for digital payments by converting them to RuPay cards on priority (say, within a year), with adequate infrastructure in place for KCC holders to make purchases digitally.

3) Promote acceptance of digital payments. Each merchant must support at least one digital mode, namely BharatQR, BHIM UPI QR, or cards. QR codes allow merchants to accept payments with very low fixed costs, and this can be the basis for a large growth in acceptance.

4) Bring in RRBs into the digital payments ecosystem: To cover customers in villages and semi-urban centres who bank with regional rural banks (RRBs), all RRBs should be brought under the ambit of UPI at the earliest. IFTAS may be appointed as the implementing agency and may consider a cloud implementation for better security and management.

5) Enable recurring payments in all digital payment systems. The committee recommends that BHIM UPI be upgraded to allow recurring payments use cases, through e-Mandates. Users must have the option to cancel the mandate, with a notification to the other party.

Previous month RBI also releases ‘Vision 2021’ for payment system to increase digital transactions

few things mentioned here:

WIDEN SCOPE, USE AND REACH OF DOMESTIC CARDS

Domestic cards have stabilised well and the potential for their large-scale use is high. Efforts will be made to increase the scope, coverage and usage of domestic cards, including the RuPay card scheme which was launched in March 2012. Collaborative effort will be initiated among NPCI, banks and the Government to widen and deepen the scope / usage of RuPay cards to enhance its brand value internationally.

GLOBAL OUTREACH OF PAYMENT SYTEMS

India is home to several innovative digital payment products which are available to the public at low cost anytime anywhere. Many countries have expressed interest in partnering in this growth and replicating our products based on their country specific requirements. Specific interests / requests are being received for implementing CTS, NEFT, UPI, messaging solutions, etc., by certain jurisdictions. There is scope for enhancing global outreach of our payment systems, including remittance services, through active participation and co-operation in international and regional fora by collaborating and contributing to standard setting. RBI will continue to actively participate, involve and engage in discussions in international standard-setting bodies. Leadership role towards regional co-operation in payment systems is also envisaged.

E-MANDATES / STANDING INSTRUCTIONS

The Reserve Bank has been receiving requests for allowing e-mandate / standing instructions-based automation of periodically recurring, non-discretionary payments. The Reserve Bank will consider implementation of e-mandates / standing instructions for retail payment systems, subject to customer protection and adequate safeguards like authenticating payment instrument registration, mandating transaction limits, segments, etc.