Big Day for Payment Systems

June 24, 2016 was a big day for Payment Systems with the IDRBT organising the first "Payment System Innovation Contest" sponsored by the Reserve Bank of India; releasing a Booklet that presents the best Payment System Innovations in the country; and the second IDRBT Staff Paper Series, which focuses on Payment Systems. Providing a framework for this concerted push for better Payment Systems in the country, the Reserve Bank of India released its Vision 2018 on Payment and Settlement Systems in India on June 23, 2016.

Payment System Innovation Contest (PSIC)

Payments are at the core of banking and financial activities of a country and technology is at the core of today's payment systems. Right from the introduction of MICR way back in mid-eighties till the recent implementation of Next Gen RTGS with ISO 20022, the Reserve Bank of India has been the driving force behind the technology based payment systems in India. The Central Bank has been encouraging innovation in the Payment Systems while ensuring that the system remains trustworthy.

In order to support and encourage innovations in the area of Payment Systems, the Reserve Bank of India announced the institution of the "Payment System Innovation Contest" on December 22, 2015 and entrusted the task of conducting it to the Institute for Development and Research in Banking Technology (IDRBT).

The PSIC provided a platform for individuals, groups, start-ups and others to demonstrate their innovations in the area of Payment Systems, which can help end-users, banks, payment service providers and other financial sector participants, etc. There was no restriction on the area of innovation other than its relevance to Payment Systems and some of the areas in which innovations were called for are as under:

  • Payment Security including Fraud Prevention
  • Customer Convenience and Cost Reduction
  • Mobile Payments
  • Acceptance/Electronic Payment Infrastructure
  • Use of Emerging Technologies for Payments.

The nation-wide call for participation in the PSIC evoked a very good response, with 115 registrations coming in from banks, individuals, payment service providers and start-ups, including three of them from outside India. Keeping in view the quality of responses, an expert committee comprising of noted academicians and industry experts, selected 12 entries after careful scrutiny, and their details are as under:

Sl. No. Name of the Innovation Affiliation
1. Cloud based Mobile On-boarding Enabled by Biometrics and Advanced Cryptography Signzy
2. PaySe™ – Democratizing Money Nucleus Software
3. eazypay – A Consolidated Platform for Collecting Payments ICICI Bank Limited
4. Trade Finance on Mobile HDFC Bank Limited
5. Vayana's Electronic Acceptance & Payment Network Vayana
6. Fastacash – Request to Pay Services Fastacash
7. Yes Bank, Unique E-Collection Proposition Yes Bank
8. Digital Payment Service: NoKash Euronet Services India Private Limited
9. LEOPARD – Integrated Tablet POS/MicroATM Evolute Systems
10. FSS PoSability – Integrated POS Payments Solution Financial Software and Systems
11. Ezetap, Universal Wallet Ezetap
12. mobiquity® Wallet Hybrid HCE Mahindra Comviva

Out of the 12 shortlisted teams, nine teams presented their innovations on June 24, 2016 before a distinguished audience including the top management of the Reserve Bank of India.

Shri H. R. Khan, Deputy Governor, Reserve Bank of India and Chairman, IDRBT gave away the awards to the winners.

Delivering his address on this occasion, Shri H. R. Khan, Deputy Governor, Reserve Bank of India and Chairman, IDRBT highlighted the following key points:

  • Payment and Settlement Systems in India need to work towards a less-cash economy
  • New Technologies such as Mobile Internet, Cloud Computing, Automates Knowledge Sharing, Virtual Reality, Blockchain Technology, needs to be harnessed for improving Payment and Settlement Systems
  • He proposed Seven Cs that can help create sustainable models for the development of Payment and Settlement Systems:
    • Capacity Dimension and Capability Building
    • Convenience of Customers: Design and develop technologies which makes banking easy and convenient for the customers
    • Cost: There is a need to keep check on the cost incurred in developing those technologies and offer affordable technologies
    • Conversion across Systems: Interoperability of systems
    • Confidence: Safeguarding the customer accounts by enhancing cyber security
    • Co-petition: Cooperate, compete and collaborate with Fintech companies for developing tech-robust finance products
    • Commitment & Conviction: Need to have a technology-oriented vision and work towards implementing it.

In his welcome address, Dr. A. S. Ramasastri, Director, IDRBT, highlighted the importance of payment systems in the Indian Banking and Financial Sector and the key role of technology in making payment systems secure and efficient. He invited all the contestants in the Payment System Innovation Contest to work together with IDRBT to improve Payment System in the Country.

Payment System Innovation Awards

Based on the presentations, an eminent Jury selected the best three innovations, which won prizes of Rs. 5 lakh, Rs. 3 lakh and Rs.1 lakh respectively. The Jury consisted of:

  • Prof. D. B. Phatak, Indian Institute of Technology, Bombay
  • Prof. G. Sivakumar, Indian Institute of Technology, Bombay
  • Prof. Rajat Moona, Director General, Centre for Development of Advanced Computing (C-DAC).

And the winners are...

  • The innovation titled Cloud based Mobile On-boarding Enabled by Biometrics and Advanced Cryptography, presented by Signzy represented by Ankit Ratan, Ankur Pandey and Arpit Ratan, won the first prize of Rs. 5,00,000/-. This innovation about on-boarding technology extracts information from ID/Documents and provides a forgery score. It replicates human-like intelligence in detecting the authenticity of information, digital forgery of documents, which go undetected by human eye. The Cloud API based background checks ensure compliance to strictest Anti Money Laundering (AML)/Combating the Financing of Terrorism (CFT) norms, even with low operation resources. In short, it's a user-friendly technology that brings greater trust in modern digital banking by reducing risks of identity theft, money-laundering and fraud.
  • The innovation titled LEOPARD – Integrated Tablet POS/MicroATM, represented by Evolute Systems, represented by Shashikumar JV and Dhananjay Dixit, won the second prize of Rs. 3,00,000/-. LEOPARD is an integrated, smart device designed to facilitate highly secure banking transactions, rugged to operate in rural environment, portable, easy to use and maintain. It was made an affordable solution to penetrate across 6.5 lakh villages along with urban and semi-urban geographies of India. It is a comprehensive and highly configurable solution empowering multiple verticals like FI, MFI, BFSI, retail, E-governance etc., giving superb user experience.
  • The innovation titled PaySe™ – Democratizing Money, presented by Nucleus Software, represented by Ashutosh Pandey and Ashish Khanna, won the third prize of Rs. 1,00,000/-. PaySe™ is designed and created with an aim to democratize digital money. It addresses the single biggest deterrent to cost-effective delivery of financial services to the last mile; the cost of cash. PaySe™ has created a solution of digital cash by retaining all the security and fungibility of cash. This platform has been built to bring the power of digital money to people at the bottom of pyramid; those who don't possess a phone. It utilizes the latest advancement in mobility, big data, open source and crypto currency (primarily tokenization) to deliver the world's first secure offline peer-to-peer payment solution.

Shri H. R. Khan, Deputy Governor, Reserve Bank of India and Chairman, IDRBT gave away the awards to the winners.

Release of Payment System Innovation Contest Booklet

Coinciding with the contest, Shri H. R. Khan, Deputy Governor, Reserve Bank of India and Chairman, IDRBT, also released the "Booklet on Payment System Innovation Contest".

This booklet provides the fine points of the 12 shortlisted entries plus an additional 14 promising proposals. It captures details of various payment innovations being developed across the country so that the banks and financial institutions enable easier payment modes for the customers and usher in more comfortable banking. The booklet serves as a guide for developing new payment systems platform by individuals, institutions, start-ups and other companies.

Release of Staff Paper Series on Payment Systems

The Institute started publishing the IDRBT Staff Series recently, which focuses on a specific theme of relevance to the Banking and Financial Sector, with the inaugural series focusing on Mobile Banking.

The second volume of the IDRBT Staff Series, which focuses on Payment Systems, was released today by Shri H. R. Khan, Deputy Governor, Reserve Bank of India and Chairman, IDRBT.

This volume of Staff Paper Series focuses attention on four key areas of Payment Systems, with the first paper describing the process of implementation of NextGen RTGS by Reserve Bank of India in 2013, focusing on adoption of ISO 20022 messaging standards; the second paper turning attention on fraud detection techniques in retail payment systems and application of these sophisticated techniques for detecting frauds in card based payments, mobile based payments, etc., the third paper dwelling on simplified authentication techniques for mobile payments, and the fourth paper presenting a reality check on the modes of payments utilized by migrant workers in two districts of the neighbouring states of Andhra Pradesh (Kurnool) and Telangana (Mahbubnagar).

The top management of the Reserve Bank of India, Executive Directors of Public and Private Sector Banks participated in the event.