• 9964432222
  • Mail Us
  • Appointment
  • Locate Us
  • Chat Now
  • Courses
  • Login
  • Register
Manifest IAS
JournalsOfIndia
Manifest Learning Academy
  • Home
  • SNIPPETSfor Prelims
  • ARTICLESfor Mains
  • BROWSEBY SOURCE
  • DOWNLOADS
No Result
View All Result
  • Home
  • SNIPPETSfor Prelims
  • ARTICLESfor Mains
  • BROWSEBY SOURCE
  • DOWNLOADS
No Result
View All Result
JournalsOfIndia
No Result
View All Result
Home Economy

Payment and settlement systems-RBI Vision document 

September 13, 2019
in Economy
Reading Time: 5 mins read
0
1.2k
VIEWS
Share on WhatsAppShare on TelegramShare on Facebook
image_pdfMake PDF

Source: Yojana Magazine

Background 

Payment and settlement systems are the backbones of any economy. The last decade has witnessed substantial developments in this area of activity across the country. The Reserve Bank of India (RBI), under powers from the Payment and Settlement Systems Act, 2007, has endeavoured to ensure that India has ‘state-of-the-art’ payment and settlement systems that are not just safe and secure but are also efficient, fast and affordable. Efforts in this direction has yielded handsome results. The planned development of the payment systems has been guided by RBI’s vision document for the payment and settlement systems in India which is being put out in the public domain since the year 2002; the last in this series was the Payment Systems Vision 2018. The current Vision document outlines the road map for the three-year period spanning from 2019 to 2021.

Payment Systems Vision-2021

Core Theme- Empowering Exceptional (E) Payment Experience

Vision Statement – Empower every Indian with access to a bouquet of e-payment options that is safe, secure, convenient, quick and affordable.

Vision 2021 concentrates on a two-pronged approach of, (a) exceptional customer experience; and (b) enabling an eco-system which will result in this customer experience. With this in view, the Vision aims towards;

  • Enhancing the experience of Customers
  • Empowering payment System Operators and Service Providers
  • Enabling the Eco-system and Infrastructure
  • Putting in place a Forward-looking Regulation
  • Supported by  Risk-focussed Supervision.

To achieve the above, the Vision envisages four goal-posts (4 Cs) Competition, Cost, Convenience and Confidence. 

  • For enhancement of Competition in the payment systems landscape, specific thrust areas like creating a regulatory sandbox, authorizing new players, etc., have been incorporated
  • This along with the presence of multiple players in the market is expected to achieve optimal Cost for the customers
  • Free access with the availability of multiple payment system options anytime-anywhere should cater to the requirement of Convenience
  • The ‘no-compromise’ approach towards safety of payment systems should address security vulnerabilities to retain customer confidence.

Expected Outcomes of Vision 2021

  • The Payment Systems Vision 2021 covers the period up to December 2021.
  • Vision 2021 focuses on further enhancements/improvements in all facets of payment systems.
  • With concerted efforts and involvement of all stakeholders, the four goal-posts of Vision 2021 with 36 specific action points over the 36-month timeframe will have the following 12 specific outcomes:
  1. Further decrease in the share of paper-based clearing as a percentage of retail payments, particularly in terms of the number of paper instruments processed. Given the current trend in cheque usage and the thrust to shift to digitized transactions it is expected that the volume of cheque-based payments would be less than 2.0% of the retail electronic transactions by 2021.
  2. Accelerated growth in individual retail electronic payment systems, both in terms of the number of transactions and increased availability. Payment systems like UPI / IMPS are likely to register average annualized growth of over 100% and NEFT at 40% over the vision period. The number of digital transactions is expected to increase more than four times from 2069 crore in December 2018 to 8707 crore in December 2021.
  3. Measurably, the digital payment transaction turnover vis-à-vis GDP (at market prices-current price) is expected to further increase to 10.37 in 2019, 12.29 in 2020 and 14.80 in 2021. Payment transaction turnover, including CCIL transactions and paper, is expected to be 22.30 times the GDP (at market prices-current price) by December 2021.
  4. Increase in use of digital modes of payment for the purchase of goods and services through an increase in debit card transactions at PoS (35% increase during the vision period) and continued growth in PPI transactions.
  5. Usage of debit cards at PoS transactions is expected to be at least 44% of total debit card transactions (at PoS + ATM). In value terms, it is 15.2 percent in 2018-19 (5.2 percent in 2014-15) which is expected to be 22% by end 2021.
  6. Increased deployment of card acceptance infrastructure across the country including at smaller centers with a substantial portion of the infrastructure taking care of processing contactless card payments. Given the current growth trend, it is expected to have 5 mn active PoS by end 2021; digital PoS (QR code) is also expected to increase substantially, and the total card acceptance infrastructure will be upscaled to six times present levels by end 2021. This is expected to support the aim of the cash-lite economy and also shift Cash on Delivery (CoD) transactions to digital modes for e-commerce.
  7. While no specific target is considered for cash in circulation, the enhanced availability of PoS infrastructure is expected to reduced demand for cash and thus over time achieve a reduction in Cash in Circulation (CIC) as a percentage of GDP.
  8. Further facilitation of mobile-based payment transactions as gauged on the basis of the registered customer base (expected increase of 50% considering the base effect).
  9. Enhanced usage of electronic payment systems is expected to reduce the marginal cost given the additional volume. The pricing of such services to customers should, over the vision period, show a reduction of at least 100 bps from current levels. Plus a shift from ad valorem rates to per transaction rates is envisaged, as the usage of a system is irrespective of the value of a transaction.
  10. Security of systems and customer-centricity as reflected by –
    1. Decrease in Technical Declines reported across various payment systems by 10% year-on-year.
    2. Reduction in Business Declines reported across various payment systems by 5% year-on-year. This will be achieved through targeted hand-holding of merchants and customers with customized campaigns by partnering with system operators and system participants.
    3. Improvement in Turn Around Time (TAT) for resolution of customer complaints by PSOs.
  11. FTS [Fraud to Sales (Fraud value / Sales value) x 10000] count for payment systems is expected to be less than 10 bps for most of the payment systems.
  12. Enhanced healthy competition in the payments space and establishment of new PSOs during the Vision period is envisaged.

 

image_pdfMake PDF
Tags: Prelims

Related Posts

What are Multilateral Development Banks?

What are Multilateral Development Banks?

March 31, 2023
Tamil Nadu announces Universal Basic Income scheme

Tamil Nadu announces Universal Basic Income scheme

March 30, 2023
New rules on UPI transactions

New rules on UPI transactions

March 30, 2023
GST Appellate Tribunal (GSTAT)

GST Appellate Tribunal (GSTAT)

March 28, 2023
Rubber board’s mobile app–CRISP

Rubber board’s mobile app–CRISP

March 28, 2023
IMF bailout

IMF bailout

March 28, 2023
Government removed the LTCG tax benefit from debt mutual funds

Government removed the LTCG tax benefit from debt mutual funds

March 25, 2023
Impact of Fed rate on the Economy

Impact of Fed rate on the Economy

March 24, 2023
World Happiness Report 2023

World Happiness Report 2023

March 23, 2023
Mundra Petrochemical project

Mundra Petrochemical project

March 21, 2023
Please login to join discussion

Our Offline Classroom Student

CONGRATULATIONS TO 2021 TOPPERS !!!

Rank 171 Kumar Shivashish
Rank 250 Sahithya
Rank 263 Sumit Kumar Thakur
Rank 311 Deepak Ramachandra Shet
Rank 455 Ravinandan B M

April 2023
MTWTFSS
 12
3456789
10111213141516
17181920212223
24252627282930
« Mar    

Browse by Category

  • Agriculture
  • Disaster Management
  • Economy
  • Environment
  • Ethics
  • Foreign Affairs
  • Geography
  • Governance
  • History
  • Law & Policy
  • Opinion
  • People in News
  • Places in News
  • Science & Tech
  • Security
  • Society
  • Sports
  • Uncategorized

Browse by Tags

AIR All India Radio BBC Business Line Business Standard dow Down to Earth DownToEarth DTE Economic Times ET FAO Financial Express GS-1 GS-2 GS-3 GS-4 Hindustan Times IE India & the world Indian express Indiatoday India today Kurukshetra Livelihoods portal LiveMint Mains News Newspaper News Paper PIB Prelims PRS India RSTV Science Reporter Survey The Hindu The India Express The Indian Express The Print the wire Times of India TOI TOPPERS Yojana
JournalsOfIndia

Our vision is to orient the readers to grasp the facts objectively and analyse critically. In the rush of reaching first to the readers, the websites miss the balanced opinion, which is the need of the hour. We aim to reach the readers with more crispness, preciseness and relevance. We bring the articles in UPSC way for the civil services aspirants and the Wisest Way for general readers.

Categories

  • Agriculture
  • Disaster Management
  • Economy
  • Environment
  • Ethics
  • Foreign Affairs
  • Geography
  • Governance
  • History
  • Law & Policy
  • Opinion
  • People in News
  • Places in News
  • Science & Tech
  • Security
  • Society
  • Sports
  • Uncategorized

Browse by Tag

AIR All India Radio BBC Business Line Business Standard dow Down to Earth DownToEarth DTE Economic Times ET FAO Financial Express GS-1 GS-2 GS-3 GS-4 Hindustan Times IE India & the world Indian express Indiatoday India today Kurukshetra Livelihoods portal LiveMint Mains News Newspaper News Paper PIB Prelims PRS India RSTV Science Reporter Survey The Hindu The India Express The Indian Express The Print the wire Times of India TOI TOPPERS Yojana

Newsletter

The most important UPSC news and events of the day.

Get Journals daily newsletter on your inbox.

© 2020 JournalsOfIndia - A free initiative by Manifest Team.

  • Login
  • Sign Up
  • Home
  • SNIPPETS
  • ARTICLES
  • BROWSE
  • DOWNLOADS
No Result
View All Result

© 2020 JournalsOfIndia - A free initiative by Manifest Team.

Welcome Back!

Login to your account below

Forgotten Password? Sign Up

Create New Account!

Fill the forms bellow to register

All fields are required. Log In

Retrieve your password

Please enter your username or email address to reset your password.

Log In