Monday, October 2, 2017

NPCI to debut Proximity Payments for UPI Transactions

                   As on date, 55 Banks are Live on the NPCI UPI platform. Multiple approaches are in pipeline to enable the remaining Banks to onboard UPI platform.

         A large number of Banks live on NPCI UPI Platform will make it attractive for 3rd Party PSPs to roll out innovative UPI products.
         UPI transactions can be executed through the App, Website and QR as the payment address needs to be keyed in manually or scanned to successfully complete the Transaction.
         There have been a number of instances wherein the wrong VPA was keyed in, and the payment landed in a wrong bank account!!  It was a hectic job, to recall the funds credited to the wrong beneficiary.
The QR mode is superior over manual keying mode of the VPA, however in some cases, the QR Code not be scanned, and the VPA had to be keyed in manually.

To overcome the barriers associated with 01) Manual keying of VPA 02) Scanning VPA, NPCI has decided to go for additional payment channels under ‘Proximity Based Payments’.

The new ‘Proximity Based Payments’ channels in UPI will be live in the next 2 quarters.


The RFP focus is on UPI only. The Objective of this RFP: To make available method of payments other than text and QR to the end customers, which will expedite the payment process as well reduce complaints.

Remote and Proximity payments in UPI are currently done only by entering the VPA or scanning a QR within the App or a web site, which limits the possible methods in which payment can be made.

Banks have been implementing various proximity payment solutions in their existing non-UPI apps but have not been able to extend it to their UPI apps as there are no standardization sets and the current implementation limits them to work with their own PSP apps only.

NPCI has been getting requests from various proximity payment players on taking their products and having them embedded within NPCI library or environment and/or certified by NPCI to be implemented within BHIM App or other UPI Apps.
Hence, the above RFP is expected to fill the gap and A) reduce complaints associated with wrong payments B) increase transactions routed through UPI c) provide a platform for FinTech companies to be part of India’s digital transactions platform.

The main requirements for Proximity Payments are the presence two devices to complete the financial transaction.Proximity Payments are equal to ‘Card Present’, transactions.

In India, the NFC based payments did not take off to various reasons.

The best examples of Proximity Payments are Apple Pay, Samsung Pay, Android Pay

Through this RFP, NPCI intends to introduce the benefits of proximity payments to UPI transactions.
UPI has gained acceptance since its launch and more and more bank customers have understood the benefits of UPI.

Introducing Proximity Payments will add an additional security layer and reduce the last-mile friction.

The RFP states that the following:-

The Bidders need to develop a solution for proximity payments where the mechanism for transfer could be anyone of the below however not limited to the following.
1. Sound
2. Tone
3. NFC
5. UHF
6. Location based payments

The Bidder/solution provider would need to have a fair understanding on UPI and also would need to provide solutions which addresses the below concerns as well.

a)   Multiple VPAs configured.

b)   Storage of VPA

c)   Functioning of proximity payments in case the app is not launched & battery optimization.

d) Payments between un-intended devices.

Proximity payments via UPI will encourage merchants to adopt UPI quickly.

One of the major drawbacks in the present UPI process is that intentionally a wrong VPA may be provided by the store staff to the customer. This leads to payment to a person other than the merchant.
Through Proximity Payments, this can be avoided.

The ‘Collect’, option is not preferred for onsite payments, as the time taken to complete the transaction is more.

The same applies to ‘QR Code’ option too. In case, the store staff shows a wrong ‘QR Code’, to the customers, the payment will land in the wrong bank account.

Service Charges –

No charges for P2P transactions
Solution Provider may charge for P2M transactions

It is not for a single service provider to provide all the methods of proximity payments. NPCI may choose different vendors for each proximity payment channel.

5 Benefits of Proximity Payments being part of NPCI UPI

Benefit No 01) – Introduce the Joys of proximity payments to Digital India.
Benefit No 02) – Enhance the confidence levels of merchants to adopt UPI

Benefit No 03) – Reduce complaints associated with wrong payments, time-outs, etc

Benefit No 04) – Increase the number of UPI transactions

Benefit No 05) – Increase the turnover rates for P2M transactions

Benefit No 06) – Enable Banks to launch ‘Cash Management Products’ based on UPI

Benefit No 07) – Ensure quick adoption of proximity payments channels to other financial products

Google TeZ is a trailblazer in UPI based proximity payments.  

Good to read articles:
MoboMoney takes sound-based mobile payments to India

A new approach to digital payments - Ultracash


Monday, August 21, 2017

Shri Amitabh Bachchan is back with Kaun Banega Crorepati – Will he promote Safe ePayments?

           The 9th season of KBC will go live on 28th August 2017.

Shooting for the same has started few months back, with the momentum building up every day.

Contestants from India participate in the game show hosted by Shri Amitabh Bachchan, where they are asked questions based on their knowledge of general topics in order to win the grand prize.    KBC has completed 8 seasons with Shri Amitabh Bachchan playing host for majority of the seasons.

"KBC" first aired in 2000 and was hosted by Shri Amitabh Bachchan. It also marked his first appearance on Indian television.

The actor went on to host the second season of the show which went on air in 2005.

Season three was hosted by Shah Rukh Khan. Bachchan made a comeback in front of "computer ji" with the fourth season and has been serving as the anchor since then.

KBC is back after a two-year bread. SET has been able to lock in three sponsors even before the launch of the show. The channel has got on board Reliance Jio as the presenting sponsor while the series is being co-powered by Vivo Cameras and Mobile and Ching’s Secret.

The highlights of KBC from a Payment angle, is the writing of the PAYMENT ADVICE by Shri Amitabh Bachchan to the contestant after every round.

At this moment, it would be a great boost to Safe ePayments in India, if Shri Amitabh Bachchan can provide nuggets on Safe eTransactions. 

Tuesday, August 15, 2017

National Automated Clearing House – Banks are requested to adhere to the laid down rules

          NPCI through circular dt July 19, 2017 has strictly advised all member banks participating in NACH Mandate Management System to adhere to laid down procedures while processing mandates.

          Mandate Management System is in operation from 2013 and over the years, 2.71 crores mandates have been added to the MMS repository.

          It was brought to the notice of NPCI that some of the member banks had started formulating their own rules for acceptance of mandates. Such non-standardised processes by banks have led to confusion in the participants of NACH eco-system.  

          Hence, NPCI to restore order in the NACH eco-system has advised Banks to strictly follow the laid-down procedures while processing the mandates.

          However NPCI is open to suggestions and has advised member banks to put forth any process improvement points to the Steering committee. The process improvements points will be deliberated at the Steering committee and further action will be planned.

          Yes, non-members too can put their points to the Steering Committee. This is a welcome step by NPCI


Mandate Management System (MMS) is an essential part of National Automated Clearing House (NACH) service. The Mandates are necessary from the regulatory National Automated Clearing House perspective in order to process NACH transactions.
As a step towards streamlining the process and making it more customer and participant -friendly, it is proposed to implement the MMS, where mandate information is captured on a standard cheque like mandate form.


Sunday, July 23, 2017

Government of India Digital Transactions Target – 2,500 crores / 25 Billion

          Government of India under the leadership of Shri Narendra Modi has set a target of 2,500 crore digital transactions in the financial year 2017-2018.

          The number of 2,500 crore digital transactions or 25 billion digital transactions has been announced by Shri Arun Jaitely, Union Minister for Finance, Government of India, in Parliament on February 1, 2017 during the presentation of the Union Budget for 2017-18.

An announcement has been made to set up a Mission to reach 25 billion digital transactions for 2017-18 through Unified Payment Interface (UPI), Unstructured Supplementary Service Data (USSD), Aadhar Pay, Immediate Payment Service (IMPS) and debit cards.

Please note transactions through Cheques will not qualify under the 25 billion numbers.

The action from the Central Government side has picked up for ensuring that the target of 25 billion digital transactions is met by 31st March, 2018.

The government has split the number across 35 government ministries and 29 states and seven Union Territories.

In the next couple of months a real-time tracking portal will be rolled out. The primary objective of the portal is to remind the various stake-holders the road ahead.

The ministry of road transport and highways and the department of telecommunications (DoT) will be chasing the highest targets for electronic payments in the government's plan to turn India into a less-cash economy.

Ministries have been chosen depending on their ability to carry out digital transactions through their physical footprint. “For the petroleum ministry, the point of interface will be the petrol pump network; for human resource development it is the educational institutes, and for railways, it will be the stations or the booking counters," said the official.

Image courtesy - Economic Times

While the ministry of road transport and highways and the department of telecommunications have been given targets upwards of 5 billion, they are followed by the ministries of railways and petroleum and natural gas, which must aim for 2.82 billion and 2.29 billion transactions, respectively.

Now the targets have been distributed, the respective ministries and states will unveil detailed road-maps.

Among states, Maharashtra and Uttar Pradesh have the highest targets (above 3 billion) followed by Tamil Nadu, West Bengal and Gujarat with numbers in the 1.5-2 billion range.

Friday, June 23, 2017

RBI Missive @ Recording of Details of Transactions in Passbook/ Statement of Account

           Reserve Bank of India has issued fresh guidelines regarding ‘Recording of Details of Transactions in Passbook/ Statement of Account’,

          Q: What is Bank Passbook/Statement of Account?
Ans: Statement is a record of all money going into and coming out of your account over a period of time.  

Bank statements can be accessed through Net Banking, Mobile Banking APP, online or on paper.

Your statement will show your balance at a given time and the money you have available to take out of the account.

Reserve Bank of India’s Circular No RBI/2016-17/326 DBR.No.Leg.BC.76/09.07.005/2016-17, dt June 22, 2017, highlights the basic details which have to reflect in the Bank Account Passbook/Statement of Account .

Illustrative narrations to be recorded in the Statement of Account/ Passbook

Two categories of transactions reflect in the Bank Account Passbook/Statement of Account - Debit Category and Credit Category

Debit means withdrawal and Credit means deposit

I.       Debit entries

a) Payment to third parties      

(i) Name of the payee
(ii) Mode – Transfer, clearing, inter-branch, RTGS/ NEFT, cash, cheque (number)
(iii) Name of the transferee bank, if the payment is made through clearing/ inter-branch transaction/ RTGS/ NEFT

b) Payment to ‘self’         

(i) Indicate “Self” as payee
(ii) Name of the ATM/ branch if the payment is made by ATM/ another branch

c) Issuance of drafts/ pay orders/ any other payment instrument      

(i) Name of the payee (in brief/ acronym)
(ii) Name of the drawee bank/ branch/ service branch

d) Bank charges    

(i) Nature of the charges – fee/ commission/ fine/ penalty etc.
(ii) Reasons for the charges, in brief – e.g. return of cheque (number), commission/ fee on draft issued/ remittance (draft number), cheque collection charge (number), issuance of cheque book, SMS alerts, ATM fees, additional cash withdrawals, etc.

e) Reversal of wrong credits    

(i) Date of the original credit entry reversed
(ii) Reasons for reversal, in brief

f) Recovery of instalments of a loan/ interest on loan      

(i) Loan account number
(ii) Name of the Loan account holder

g) Creation of fixed deposit/ recurring deposit     

(i) Fixed Deposit/ Recurring Deposit Account/ Receipt number
(ii) Name of the Fixed Deposit/ Recurring Deposit Account holder

h) Transactions at POS   

(i) Transaction date, time and identification number
(ii) Location of the POS

i) Any other (i) Provide adequate details on the same lines as mentioned above.

Note: In case of single debit in account with multiple credits, the payee name/ account number/ branch/ bank shall not be recorded. However, the fact of “multiple payees” will be indicated.

II.     Credit Entries

a) Cash deposit     

(i) Indicate that it is a “cash deposit”
(ii) Name of the depositor – self/ third party

b) Receipt from third parties  

(i) Name of the remitter/ transferor
(ii) Mode – Transfer, inter-branch, RTGS/ NEFT, cash, etc.
(iii) Name of the transferor bank, if the payment is received through inter-branch transaction, RTGS/ NEFT

c) Proceeds of clearing/ collection/ draft etc. paid

(i) Name of the draft issuing bank
(ii) Date and number of the cheque/ draft

d) Reversal of wrong debits (including charges)     

(i) Date of the original debit entry reversed
(ii) Reasons for reversal, in brief

e) Interest on deposits  

(i) Mention if it is interest paid on the Savings Account/ Fixed Deposit
(ii) Mention the respective Fixed Deposit Account/ Receipt Number if it is interest paid on Fixed Deposit(s)

f) Maturity proceeds of fixed deposit/ recurring deposit         

(i) Name of the Fixed Deposit/ Recurring Deposit holder
(ii) Fixed Deposit/ Recurring Deposit account/ receipt number
(iii) Date of maturity

g) Loan proceeds    (i) Loan account number

h) Any other          (i) Provide adequate details

          The operative date of the circular is not mentioned, this means that the banks have to implement these changes immediately

Extract from:  BCSBI Code of Banks Commitment to Customers


Statements: To help you manage your account and check entries in it, we will provide you with a monthly statement of account unless you have opted for a pass book.


          Reserve Bank of India vide Paragraphs 6 and 7 of Circular DBOD.No.Leg.BC.74/09.07.005/2003-04 dated April 10, 2004 had advised  banks to avoid inscrutable entries in passbooks/ statements of account and ensure that brief, intelligible particulars are invariably entered in passbooks/ statements of account with a view to avoiding inconvenience to depositors.

          However, account-holders have approached Reserve Bank of India or highlighted in various forums the difficulties in interpreting details in Bank Account Passbook/Statement of Account.
          Statement of Accounts not only assists account holders to keep a track of thief financial transactions but also assist third-parties to arrive at the financial position of the account holders.
          Hence it is of utmost importance that the Transactions Details in Bank Account Passbook/Statement of Account are legible and make sense to the reader. The clearer are the transaction details, the less account holders will approach Bank staff/Call Centre for clarity.

 Additional specific guidelines::

As per NPCI NACH Circular dt October 05, 2016, Sponsor Banks have to provide ‘User Name’, and ‘User Ref No’, in the transaction file. This will enable Destination Banks to consume these details and ensure that the same reflect in the account holders Passbook/Statement of Account.

As per RBI NEFT procedural guidelines, beneficiary has to be advised of the Receipt of Funds in his/her bank account. The Account Statement / Pass Book entry or any online messaging system shall indicate briefly the source of funds as well.

For this purpose, the mandatory field 6091 which contains the remitter's name shall be picked up for the source of credit and information contained shall be printed in the Account Statement / Pass Book. Banks originating transactions shall ensure proper and meaningful details are provided in this field.

Description of field 6091 is:

M  6091  Sending customer a/c name    50x    Sender's account name

Sender to be advised in Case of NEFT Returns - If the beneficiary specified in the sender's payment instruction fails to get payment through the NEFT system for some valid reasons, the sender shall be informed immediately after the sending bank gets the returned NEFT.

The originating bank shall provide the description “NEFT-Return” in the pass book / account statement of the originator whose NEFT transaction is returned.

Additional Reading:

01) ‘Make bank statements less cryptic’


03)           History of Passbook


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