Payments Vision 2025

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What is Payments Vision 2025?

• It proposes a host of innovative payment systems and regulation of BigTechs, fintechs, buy-now-pay-later (BNPL) systems, and introduction of a central bank digital currency (CBDC).
• The operations that the central bank will do between now and 2025 have been divided into five key goals which are integrity, inclusivity, innovation, institutionalisation, and internationalisation.
• Additionally, RBI wants to achieve 10 goals that include tripling the number of digital payment transactions, 50% annualised growth for the UPI, 20% growth for the Immediate Payment Service (IMPS) and National Electronic Fund Transfer (NEFT), and debit card usage surpassing credit card usage.
• It promises to further elevate our payment systems towards a realm of empowering users with affordable payment options accessible anytime and anywhere with convenience.

• It has proposed enabling the geotagging of digital payment infrastructure and transactions and revisiting guidelines for prepaid payment instruments (PPIs), including closed system PPIs. 
• It also proposed a framework for regulation of all significant intermediaries in the payments ecosystem and link credit cards and credit components of banking products to UPI.
• Other proposals include bringing in enhancements to the Cheque Truncation System (CTS), including One Nation One Grid clearing and settlement perspective, and creating a payment system for processing online merchant payments using internet and mobile banking. 
• It also proposed regulation of BigTechs and FinTechs in the payments space.
• The vision document recommended that the BNPL method should be examined, and issuance of appropriate guidelines on payments involving BNPL should be explored. 
• BNPL services have developed into a new payment mode alongside the existing payment modes like cards, UPI, and net banking. 
• This channel, facilitated by a few payment aggregators, leverages the existing nodal account (escrow account after authorisation) to route payments between a BNPL customer and a merchant.
• The Payments Vision 2025 has the core theme of E-payments for everyone, everywhere, everytime (4Es) and aims to provide every user with safe, secure, fast, convenient, accessible and affordable e-payment options.
• The Payments Vision 2021 had envisaged to empower every Indian with access to a bouquet of e-payment options that is safe, secure, convenient, quick and affordable, and had set four goalposts of competition, cost, convenience and confidence with 36 specific action points and 12 expected outcomes.

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