Let's Talk about Digital payments.

2. Digital Payment Companies In India
1.1.1 Concept – Meaning & Definition
1.1.2 Overview of Payment Systems
1.1.3 Digital Payment Forecasting
1.1.4 Payment Gateways

3. Digital Payment Companies
1.1 Introduction & Overview of Payment Systems
1.2 Prepaid Payment Instruments [PPI]
1.3 Who can Issue PPI?
1.4 Mode of Payment
1.5 Anti Money Laundering [AML]
1.6 Key Discussions
Session - I Road Map…

4. 1.1.1 Concept
“Digital payments are not one instrument but rather an
umbrella term applied to a range of different instruments
used in different ways.”
Meaning & Definition:
“I love you not for what you are
but for what I am when I am with
you”
-- Umashanker Sahu

5. 1.1.2 Overview of Payment System
 Country’s Cashless Journey
 2006-2011- Shift of Non Cash
Payments
 2013 – Master Card launched
 2014 – Online payments rapid
Growth
 2014 – Adaption of Mobile
payment
 2015 – 200% increase in Mobile
Payment from 2011
 E- Commerce
 Consumer to Business (C2B)
 Business to Consumer(B2C)
Manufacturer Wholesaler

6. 1.1.3 Forecasting
'Indian digital payments market to reach $500 bn by
2020'

7. 1.1.4 Payment gateway market
HOW PAYMENT GATEWAYS WORK
Software and servers that transmit Transaction information to Acquiring Banks and responses from
Issuing Banks (such as whether a transaction is approved or declined).

8. 1.1.4 Payment gateway market
Payment Gateway Players
Financial Institutions/Banks
• ICICI
• CITI
• HDFC
• AXIS etc.
Third Party Vendors
• CC Avenue
• Bill Desk
• PayU
• PayPal etc.

9. 1.2 Prepaid Payment Instruments [PPI]
Definition:
“Payment instruments that facilitate purchase of goods
and services, including funds transfer, against the
value stored on such instruments. ”
---- RBI under Payment & Settlement Systems
Act 2007
Meaning & Definition:
“Mode of cashless fund transfer or transaction
using cards or mobile phones”
-Umashanker Sahu

10. 1.2 PPI Exists??

11. 1.2 Classification of PPI
ClosedSystemPaymentInstruments
• Issued by an entity
for facilitating the
purchase of goods
and services
• Do not permit cash
withdrawal
• Usage - Web
portals for online
purchases
/shopping - Make
my Trip, Flipkart,
Jabong etc.
Semi-ClosedPaymentInstruments • Facilitates the
purchase of goods
and services at
identified merchant
locations
• Do not permit cash
withdrawal
• Limit – Rs. 20,000
with minimum
details
• E.g. E Wallets/Digital
Wallets OpenSystemPayment
Instruments
• Facilitates the
purchase of goods
and services at POS
terminal.
• Permit Cash
withdrawal upto
Rs.1000 at any point
of time.
• Eg. Web portals for
online purchases
/shopping -
Closed System
Payment Instruments
Semi-Closed System
Payment Instruments
Open System
Payment Instruments

12. 1.2 Classification of PPI
Closed System
Payment Instruments
Semi-Closed System
Payment Instruments
Open System
Payment Instruments
Virtual Cards/Digital
Wallets/E-Wallets
General Purpose
Debit Cards
Gift Cards

13. 1.3 Who can issue PPI in India?
 Companies minimum paid up capital of Rs. 5 crore and +ve
Net worth of Rs. 1 crore
 Mobile based pre-paid payment instruments (mobile wallets
& mobile accounts)
 NBFC - closed and semi-closed system payment
instruments, including mobile phone based pre-paid
payment instruments
 Certificates of Authorization issued by Reserve Bank of
India under the Payment and Settlement Systems Act,
2007 for Setting up and Operating Payment System in
India

14. 1.4 Mode of Payment
1.4.1 Bank Cards
1.4.2 USSD Mobile Banking
1.4.3 Aadhar enabled payment system [AEPS]
1.4.4 United Payments Interface [UPI]
1.4.5 Point of Sale (POS) & Cards
1.4.6 Mobile POS
1.4.7 V- POS
1.4.8 Best Practices

15. 1.4.1 Bank Cards
 How to issue
 Approach nearest bank branch
 Multiple cards from one account
 PIN issued by bank separately
 Activate your Card
 At your Bank’s ATM by even balance
checking
 At your bank branch by any
transaction

16. 1.4.1 Bank Cards – Types & Usage
 PREPAID CARDS
 Pre-loaded from
your bank account
 Safe to use, limited
amount of
transaction
 Can be recharged
like mobile recharge
like Gift Card
 DEBIT CARDS
 Linked to your bank
account
 Used to pay at
shops, ATMs, wallets,
Micro ATMs, online
shopping Etc.

17. 1.4.2 USSD – Mobile banking
Enables Customer to send money, check account balance,
mini statement and more without internet connectivity.
Non-internet Banking - USSD - *99#
Registrations
Get Mobile Money Identifier (MMID)
& Mobile Pin [MPIN]
Link mobile number with Bank Account
Account in a bank or
Any mobile phone on GSM network

18. 1.4.2 Transaction Flow
Transfer Funds to another Bank Account
Dial
99#
from
your
phone

19. 1.4.3 Aadhar enabled payment system [AEPS]
AEPS allows bank-to-bank
transaction at PoS (MicroATM)
with the help of BC.
Only Aadhar needed
Aadhar enabled Services
Balance Enquiry
Cash Withdrawal
Aadhaar to Aadhaar Funds Transfer

20. 1.4.3 Transaction Flow
GO TO A
MICROATM OR
BANKING
CORRESPONDENT
PROVIDE YOUR
BANK NAME AND
AADHAAR
CHOOSE WHICH
TRANSACTION TO
DO
PROVIDE FINGER
PRINT ON
SCANNER
ON SUCCESSFUL
TRANSACTION
TAKE THE PRINT
SLIP
PROCESS
COMPLETED

21. 1.4.4 Unified Payment Interface [UPI]
A system that powers multiple bank
accounts into a single mobile application
like an email ID for your money.
Registration Requirements
Smartphone with internet facility
Bank Account details
(only for registration)
CUPI, UCO UPI, Union Bank UPI,
AVAILABLE APPS (28 BANK APPS)
like SBI app, PNB UPI, UPI Collect (ICICI) etc.

22. 1.4.4 Registration Process
DOWNLOAD ANY
BANK’S APP
CHOOSE YOUR
UNIQUE ID AS
VIRTUAL PAYMENT
ADDRESS (VPA)
SELECT YOUR
BANK
GIVE ACCOUNT
DETAILS FOR FIRST
TIME
SET M-PIN FOR
VALIDATING
TRANSACTIONS
REGISTRATIO N
COMPLETED

23. 1.4.4 Registering on UPI

24. 1.4.4 Sending Money on UPI

25. 1.4.5 Point of Sale (POS) & Types
An electronic device used to process card payments
at retail locations.
PHYSICAL POS MOBILE POS VIRTUAL POS

26. 1.4.5 Physical POS
The physical location at which goods are sold to customers.
1. Swipe a
Debit/Credit Card on
the POS Machine.
2. Enter Amount to be
Paid and PIN
3. Generate Receipt

27. 1.4.6 Mobile POS
A Smartphone, tablet or dedicated wireless device or electronic
point of sale terminal.

28. 1.4.7 Virtual- POS
A web or windows application that can be used by card-accepting
merchants to manually authorize card transactions.
 No POS machine required
 QR code used for payment
to bank account of merchant
 Complete privacy of
merchant bank account

29. 1.4.8 Best Practices
 Register your mobile number at bank for regular
information by SMS for every transaction
 Never share your PIN to anyone
 Transact at only trusted merchants
 While at ATM, ensure no one is looking over your
shoulders

30. 1.5 Anti Money Laundering [AML]
1.5.1 Meaning, Definition & Concepts
1.5.2 ML Activities
1.5.3 Stags of ML
1.5.4 AML Flow
1.5.5 Illustration Video

31. 1.5.1 Meaning, Definition & Concepts
Section 3 of PMLA 2005, describes the offence of
ML. Section 3 reads as under: “Whosoever
directly or indirectly attempts to indulge or
knowingly assists or knowingly is a party or is
actually involved in any process or activity
connected with the proceeds of crime and
projecting it as untainted property shall be guilty
of offence of money-laundering.”
Money Laundering (ML) is the processing of
criminal proceeds in order to disguise their illegal
origin.

32. 1.5.2 Money Laundering Activities
 Account activities not consistent with the
customer’s business or normal transaction profile
of the customer.
 Transactions which attempts to avoid
reporting/record-keeping requirements.
 Unusual activities.
 Transaction or account activities pertaining to
customer who provides insufficient or suspicious
information or is reluctant to provide requisite
information.
 Suspicious fund transfer activities.

33. 1.5.3 Stages of ML
• Physical Movement of cash through
banking channel.PLACEMENT STAGE
• Conducting Multiple complex financial
Transactions to eliminates the audit trail.LAYERING STAGE
• Integrate the illicit funds into the
Economy
• E.g. Purchase of real estate, Jewellery
etc.
INTEGRATION STAGE

34. 1.5.4 Money Laundering Flow

35. Happy Digitalization
Thank You