Tag: Digital

What is e-RUPI and how does it work?, BFSI News, ET BFSI

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-By Tarika Sethia

What is e-RUPI?

The new digital product, e-RUPI is a paperless one-time payment system and a person and purpose-specific digital product.

The contactless e-RUPI is a secure way of transacting as it keeps the beneficiary’s information confidential and can also be tracked by the issuer. It is authorised via a verification code and does not require handling of cash due to its wholly digital and prepaid mode. Additionally, the beneficiary is not required to have a bank account or a digital payment app thus, being a catalyst in boosting financial inclusion in the country.

e-RUPI connects the sponsors of the services with the beneficiaries and service providers in a digital manner without the requirement of any physical interface.

How can we redeem e-RUPI?

e-RUPI is a prepaid voucher that can be redeemed without a debit or a credit card, digital payments app or internet banking services. It is a QR based or SMS string-based digital voucher that is delivered to the mobile phones of the beneficiaries by the government or by a selected few organisations.

The user can give an e-RUPI voucher instead of cash at the counters of merchants accepting e-RUPI. Covid-19 vaccine jabs can also be received via these newly launched vouchers. Moreover, a variety of donations can be made by this prepaid digital voucher with the assurance of a targeted, transparent and leakage-free transaction. Even the private sector can leverage these e-vouchers as part of their employee benefit and corporate social responsibility programmes.

The pilot avenue of e-RUPI is the health sector where payments via these electronic vouchers will be accepted. The product will gradually move into other segments.

Who is the architect of e-RUPI?

This digital innovation was brought to the fore by the National Payments Corporation of India (NPCI). It was launched in collaboration with the Department of Financial Services (DFS), National Health Authority (NHA), Ministry of Health and Family Welfare (MoHFW), and other partner banks.

Which banks have gone live with e-RUPI?

From Axis Bank to ICICI, from Bank of Baroda to Punjab National Bank, in total 11 banks are currently in sync with the e-RUPI product. Bharat Pe, BHIM Baroda Merchant Pay, HDFC Business App, PNB Merchant Pay and YONO SBI Merchant are the acquiring apps dealing with the NPCI’s recent launch.

How is e-RUPI different from UPI?

The Unified Payments Interface (UPI) is a direct bank-to-bank transfer that requires the presence of a bank account or a digital payments app while e-RUPI works independent of bank accounts.

What is e-RUPI and how does it work?

Under UPI payments, there is no way of tracking the money paid, however, e-RUPI facilitates payment tracking for the issuer.

NPCI’s data reveals that UPI experiences a fail rate or technical decline rate (TD) of 1.43% which is an improvement from the high that it had reached of 3.4% in December 2020. In another move, e-RUPI is designed with a pre-recorded amount thus, leading to a much smaller transaction failure rate. An amount is already stored in the voucher within which the payment is made.



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PM Narendra Modi launches e-RUPI, BFSI News, ET BFSI

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“India has moved forward with a futuristic innovation today. e-RUPI vouchers will play a big role in strengthening Direct Benefit Transfer (DBT) and raise digital penetration in the country. Targeted, transparent and leakage-free delivery via e-RUPI will be beneficial to all.”

e-RUPI, this real-time and paperless service was launched today at 4:30 p.m. by PM Narendra Modi via video conferencing. Developed by the National Payments Corporation of India (NPCI) on its UPI platform, e-RUPI is a QR code or SMS string-based e-Voucher, which is delivered to the mobile of the beneficiaries.

“e-RUPI is a person and purpose-specific digital payment solution.” said PM Modi at the conference.

Launched in collaboration with the Department of Financial Services, Ministry of Health & Family Welfare and National Health Authority, the users of this seamless one-time payment mechanism will be able to redeem the voucher without a card, digital payments app or internet banking access, at the service provider. The e-RUPI vouchers can also be used to make the payment for COVID-19 vaccine shots.

e-RUPI connects the sponsors of the services with the beneficiaries and service providers in a digital manner without the requirement of any physical interface. It also ensures that the payment to the service provider is made only after the transaction is completed. Being pre-paid in nature, it assures timely payment to the service provider without the involvement of any intermediary.

Digital payments recorded a growth of 30.19 per cent during the year ended March 2021, reflecting the adoption and deepening of cashless transactions in the country, RBI data showed. India has grown copiously in the digital arena after the introduction of the Unified Payments Interface (UPI) in 2016. UPI transaction volumes surged 43.2% in the first quarter of the last fiscal, 98.5% in the second quarter, 104.6% in the third and 112.5% in the fourth quarter.



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As Covid wave ebbs, UPI transactions hit record in July, BFSI News, ET BFSI

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UPI continues to record growth despite lockdown restrictions aided by the pandemic.

Unified payment interface (UPI) transactions rose to record 3.24 billion transactions in July, up 15 per cent over June, while value-wise the transactions were up 10.7 per cent at Rs 6.06 lakh crore.

The performance

The platform saw 2.8 billion transactions worth Rs 5.47 lakh crore in June, up 10.6 per cent in volume terms and 11.56 per cent in value terms over May.

UPI transactions fell in volume as well as in value for the second consecutive month in May as lockdowns restricted economic activity.

About 2.53 billion transactions worth Rs 4.9 lakh were recorded in May, a 4.16% drop in volume and 0.6% fall in value compared with April, according to National Payments Corp of India data.

Digital payment index

Digital payments recorded a growth of 30.19 per cent during the year ended March 2021, reflecting the adoption and deepening of cashless transactions in the country, RBI data showed.

As per the newly constituted Digital Payments Index (RBI-DPI), the index rose to 270.59 at the end of March 2021, up from 207.84 a year ago.

“The RBI-DPI index has demonstrated significant growth in the index representing the rapid adoption and deepening of digital payments across the country in recent years,” the RBI said.

The Reserve Bank had earlier announced the construction of a composite Reserve Bank of India – Digital Payments Index (RBI-DPI) with March 2018 as a base to capture the extent of digitisation of payments across the country.

The RBI-DPI comprises five broad parameters that enable the measurement of deepening and penetration of digital payments in the country over different time periods.

These parameters are — Payment Enablers (weight 25 per cent); Payment Infrastructure – Demand-side factors (10 per cent); Payment Infrastructure – Supply-side factors (15 per cent); Payment Performance (45 per cent); and Consumer Centricity (5 per cent).

UPI on the fast track

UPI transaction volumes surged 43.2% in the first quarter of the last fiscal, 98.5% in the second quarter 104.6% in the third and 112.5% in the fourth quarter.

While IMPS volumes degrew 9.6% in Q1, they rose 26% om Q2. 40.5% in the third quarter and 42.9% in the fourth quarter.

National Automated Clearing House (NACH) volumes grew 32.8 in the first quarter, 13 in second, 0.9 in third while they degrew 10.2 in the fourth.

BBPS volumes grew 66% in Q1, 103.2 in Q2, 84.4 in Q3 and 102.7 in Q4 while National Electronic Toll Collection, the NHAI’s Fastag system logged 83.9 growth in Q1, 249.2 in Q2, 195 in Q3 and 75.3 in the fourth quarter.

On the other hand, RTGS volumes degrew 26.2 in Q1, logged 3.1 in Q2, 10.2 in third and 31.1 in the fourth quarter.

NEFT volumes degrew 3.9% in the first quarter, grew 9.8 in second, 23.2 in third, 17.8 in the fourth quarter.



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PM Modi to launch e-RUPI on August 2. Here’s all about the cashless digital payment solution, BFSI News, ET BFSI

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Prime Minister Narendra Modi will launch e-RUPI, a person and purpose specific digital payment solution on Monday via video conferencing. The event will take place at 4.30 pm. e-RUPI is a cashless and contactless instrument for digital payment.

What is e-RUPI
e-RUPI is a QR code or SMS string-based e-Voucher, which is delivered to the mobile of the beneficiaries. The users of this seamless one-time payment mechanism will be able to redeem the voucher without a card, digital payments app or internet banking access, at the service provider.

e-RUPI connects the sponsors of the services with the beneficiaries and service providers in a digital manner without any physical interface. It also ensures that the payment to the service provider is made only after the transaction is completed. Being pre-paid in nature, it assures timely payment to the service provider without involvement of any intermediary.

The instrument has been developed by the National Payments Corporation of India on its UPI platform, in collaboration with the Department of Financial Services, Ministry of Health & Family Welfare and National Health Authority.

Can also be used for other government schemes
It can also be used for delivering services under schemes meant for providing drugs and nutritional support under Mother and Child welfare schemes, TB eradication programmes, drugs and diagnostics under schemes like Ayushman Bharat Pradhan Mantri Jan Arogya Yojana besides fertilizer subsidies.

A PMO release said that the Prime Minister has always championed digital initiatives. Over the years, several programmes have been launched to ensure that the benefits reach their intended beneficiaries in a targeted and leak-proof manner, with limited touchpoints between the government and the beneficiary. The concept of electronic voucher takes forward this vision of good governance, the release said.

Another tool for good governance
Over the years, several programmes have been launched to ensure that the benefits reach its intended beneficiaries in a targeted and leak-proof manner, with limited touch points between the government and the beneficiary. The concept of electronic voucher takes forward this vision of Good Governance.

Mobile telephony & India
While the DBT scheme relies on the troika of Jan Dhan accounts, Aadhaar numbers — although Aadhaar is not mandatory — and mobile phones, the e-RUPI system will not require users’ bank account details. The only requirement is for the beneficiary’s mobile phone number. The DBT scheme notes that it relies on 100 crore mobile connections to reach aid to beneficiaries.



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Bitcoin leaps 12% to test recent peaks, ether hits 3-week high, BFSI News, ET BFSI

Banking & Finance

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Cryptocurrencies popped to the top of recent ranges on Monday as short sellers bailed out in the wake of a strong week and while traders hoped a handful of positive comments from influential investors might signal a turnaround in fragile sentiment.

Bitcoin rose as far as 12.5% to hit $39,850, its highest since mid-June during the Asia session, while ether hit a three-week peak of $2,344. On the heels of bitcoin’s best week in almost three months, the move put the squeeze on short sellers.

Last week, cryptocurrency enthusiast and Tesla boss Elon Musk said the carmarker would likely resume accepting bitcoin once it conducts due diligence on its energy use. It had suspended such payments in May, contributing to a sharp crypto selloff.

Twitter boss Jack Dorsey also said last week that the digital currency is a “big part” of the social media firm’s future and, on Sunday, London’s City A.M. newspaper reported – citing an un-named “insider” – that Amazon is looking to accept bitcoin payments by year’s end.

Brokers said that taken together the remarks were enough to finally lift the market from the floor of support where it has held steady since a May plunge, while data also pointed to heavy short-seller liquidations – suggesting many might have given up.

“Over the last five trading sessions we’ve seen general near-term bullishness in the market, driven by key technicals, as well as recent positive comments,” said Ryan Rabaglia, global head of trading at digital asset platform OSL.

“With a record $1.2 billion in shorts liquidated over the past 24 hours, the outlook and momentum for the week ahead is positive,” he said.

Bitcoin was last up 8% at $38,064, putting it within sight of resistance around June’s $41,341.57 peak just a week after it was testing support at $29,500.

Ether was last up 5% at $2,304.



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Reserve Bank working towards phased implementation of digital currencies

Banking & Finance

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The time for introduction of central bank digital currencies (CBDCs) is possibly near, with the Reserve Bank of India (RBI) currently working towards a phased implementation strategy and examining use cases which could be implemented with little or no disruption, according to Deputy Governor T Rabi Sankar.

Referring to countries generally implementing specific purpose CBDCs in the wholesale and retail segments, Sankar observed that going forward, after studying the impact of these models, launch of general purpose CBDCs will be evaluated.

A CBDC is the legal tender issued by a central bank in a digital form. It is the same as a fiat currency and is exchangeable one-to-one with the fiat currency. Only its form is different.

Some key issues under examination by the RBI relate to the scope of CBDCs – whether they should be used in retail payments or also in wholesale payments; the underlying technology — whether it should be a distributed ledger or a centralised ledger, for instance, and whether the choice of technology should vary according to use cases, the Deputy Governor said.

Further, the validation mechanism — whether token-based or account-based distribution architecture — whether direct issuance by the RBI or through banks; degree of anonymity etc., are also being examined.

However, conducting pilots in wholesale and retail segments may be a possibility in near future.

Benefits and risks

At a webinar organised by New Delhi-based Vidhi Centre for Legal Policy, Sankar emphasised that introduction of CBDC has the potential to provide significant benefits such as reduced dependency on cash, higher seigniorage due to lower transaction costs, reduced settlement risk.

“Introduction of CBDC would possibly lead to a more robust, efficient, trusted, regulated and legal tender-based payments option,” he said.

The Deputy Governor cautioned that there are associated risks, no doubt, but they need to be carefully evaluated against the potential benefits.

He underscored that it would be the RBI’s endeavour, as we move forward in the direction of India’s CBDC, to take the necessary steps which would reiterate the leadership position of India in payment systems.”

Sankar said CBDC is a digital or virtual currency but it is not comparable to the private virtual currencies that have mushroomed over the last decade.

“Private virtual currencies sit at substantial odds to the historical concept of money. They are not commodities or claims on commodities as they have no intrinsic value; some claims that they are akin to gold clearly seem opportunistic.

“Usually, certainly for the most popular ones now, they do not represent any person’s debt or liabilities. There is no ISSUER. They are not money (certainly not CURRENCY) as the word has come to be understood historically,” he cautioned.

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Globally, Indian Banks lead the way in adopting new technologies, BFSI News, ET BFSI

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Mumbai: While the banking sector has been adapting to digital disruption for several years, COVID-19 has accelerated this transformation, opening up access and opportunity to millions of unbanked and under-banked consumers.

Leveraging technology to its fullest potential will not only stimulate growth but will enable Indian Banks to emerge as global leaders that will be among the strongest, resilient and most dynamic in the world.

Indian banks are leading all other banks around the world in adopting technologies. This was the collective opinion of leading bankers and experts in the BFSI sector who participated in a virtual discussion at the IMC Chamber of Commerce and Industry’s 11th Banking & Finance Conference on”How Technology is Reshaping Banking and Finance,” on July 15 & 16, 2021.

SBI Chairman Dinesh Khara spoke of SBI working towards launching the next version of Yono, adding that the bank had onboarded 40,000 overseas customers on the Yono platform by end of March 2021.

Speaking at the Conference, Guest of Honour, N. S. Vishwanathan, Former Deputy Governor, Reserve Bank of India said, “The government’s move to privatise two State-owned lenders, presents an ‘exciting opportunity’ for investors looking to get into the business.”

“The government has already been brave while presenting the Union budget and has confirmed that it is willing to stretch the deficit to make sure that the country continues to be on a growth path,” said K V Kamath, while speaking at an event.

Abizer Diwanji, Partner & Head – Financial Services, E&Yis of the opinion that defaults are bound to happen in the banking business, but one has to deal with them upfront rather than taking 5-7 years to deal with it.

Narendra Ostawal, MD, Warburg Pincus‘ said, “Private equity firms like his will be interested in investing in the bank privatisation process and see it as a ‘huge opportunity’.”

Arjit Basu, Chairman, Banking and Finance Committee in his introductory address affirmed that Technology is the core of global economy and we should fearlessly embrace new technologies and innovations. Diversion between Banks and financial institutions are slowly going away and Fintechs are the emerging banks of tomorrow.

In his welcome remarks, Rajiv Podar, President, IMC mentioned that the Indian economy has undergone a radical transformation in the last decade. The confluence of technology and finance, or Fintech as it is commonly known, has been at the centre of this change. India has emerged as one of the biggest Fintech hubs in the world, as new-age companies leveraged technology to change the way people and businesses avail banking and financial services.

Other sessions focused on the importance of ‘Corporate Governance’ in the banking systems, opportunities and risks involved in investing in the Indian banking and financial services, role of Fintechs and Payments Banks in the financial systems, and on how technology will help banking and financial services in future.

Also discussed were problems encountered by customers and banks due to the rapid digitization of the banking and finance sector, and how central banks can and should take the lead to ensure a Green Economy.MDs and CEOs of many other banks, Fintech companies, Private Equity Firmsalso participated in the conference.



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Digital banking app Revolut launches travel booking service, BFSI News, ET BFSI

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By Anna Irrera

LONDON, – British-based digital banking app Revolut is launching a new service allowing users to book travel accommodation and receive up to 10% in cashback in its first non-financial or insurance product launch.

Revolut, which was valued at about $33 billion through a new investment round last week, will allocate 70 million pounds ($95.24 million) to cashback for customers using the new service, Stays, it said on Wednesday.

Stays is part of Revolut’s wider goal to help users spend “more smartly” when travelling, it said. It comes as coronavirus travel restrictions start to ease in some regions.

“After 18 months of endless restrictions and lockdowns, we want to give people more and make their money travel further,” said Marsel Nikaj, head of savings and lifestyle at Revolut.

The digital banking provider raised around $800 million in a funding round led by Softbank’s Vision Fund and Tiger Global Management last week. The cash injection made Revolut Britain’s most valuable fintech firm.

Launched in 2015, Revolut has more than 16 million customers and is aiming to become a leading financial super app. It gained popularity with travellers in its early days by offering cheaper and easier foreign exchange services than mainstream banks and now provides a range of products including trading and insurance. It has yet to become profitable.

The new booking product, which pits Revolut against online travel booking giants such as Booking Holdings Inc, will allow users to make reservations for flights, car rentals, and other travel needs.

It will go live in the UK on Wednesday, with EU and U.S. launches coming in the next few weeks. ($1 = 0.7350 pounds)

(Reporting by Anna Irrera; Editing by Nick Macfie)



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SIDBI’s net profit up 3.6% in FY2021, BFSI News, ET BFSI

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The operating profit (before provision) of SIDBI has recorded a Year-on-Year (YoY) growth of 8.0% in FY21 over FY20 to Rs. 4,063 crore. The net profit witnessed a growth of 3.6% to Rs. 2,398 crore in FY21, from Rs. 2,315 crore in FY20. Net Interest Income (NII) grew by 11.5% to Rs. 3,678 crore in FY21, from Rs. 3,299 crore in FY20. Total advances marginally declined by 5.6% (YoY) to Rs. 1,56,233 crore as of March 31, 2021, from Rs. 165,422 crore as of March 31, 2020. Earnings Per Share improved to Rs. 45.09 in FY 21 from Rs. 43.51 in FY 20

Sivasubramanian Ramann, Chairman and Managing Director, SIDBI, said, “SIDBI has been responsive to the COVID-19 challenges faced by the MSME sector. Besides channelizing the Government of India / Reserve Bank of India (RBI) support to partner lending institutions, SIDBI has launched several schemes like SAFE, SAFEPLUS, AROG, and TWARIT to directly enable MSMEs to revive and thrive. To respond to the emerging needs of the MSME sector, SIDBI continued with its developmental engagements including inter alia powering national missions through digital portals, setting up project management units in 11 states for strengthening the ecosystem, supporting 1700 Women Homepreneurs in 7 states, setting up 100 Swavalamban Connect Kendras to kindle the aspirations of youth / displaced population, as also setting up of Swavalamban Crisis Responsive Fund for MSMEs. I can assure you that besides growing its topline and bottomline, SIDBI shall rise to the occasion for implementing national priorities and continue to contribute to an inclusive AtmaNirbhar Bharat.”



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Fintech Wise to digitally disrupt outbound remittances from India

Banking & Finance

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British fintech company Wise, a digital cross-border money transfer solutions provider, has now set its sights on disrupting outbound remittances from India, launching a digital solution in this space in the Indian market, a top official said.

With the launch of this service from June 1, Indians can now use Wise to send money to 44 countries around the world.

“Outbound market in India is $14-15 billion every year. For us, as a global company, that is a large interesting opportunity where we believe we can be one of the solutions to the problem. Historically, it (outbound remittance) is a space that has not been invested in and we believe that we can bring some competition and disruption in the Indian market in this space,” Venkatesh Saha, Head of APAC & Middle East Expansion, Wise told BusinessLine.

“We already have a formidable business of bringing money into India. We have had that for a number of years. We use the most competitive, cost-effective and transparent methods to send money to India. Now that we can do that, moving forward we would like to see how we can be a part of solution to improve outbound payments from India.”

For Wise, sending money to India started in 2013. Wise most recently enabled Google Pay users in the US to send Indian rupees to Google Pay users in India.

Founded in 2011 by two Estonian gentlemen in London, Wise, which was formerly known as TransferWise, got itself directly listed at the London Stock Exchange (LSE) last week, giving the firm a market value of over $ 11 billion on market debut. This strong listing has now turned its founders Kristo Kaarmann and Taavet Hinrikus into billionaires.

Money transfer solutions

With India now becoming the largest inbound remittance recipient market (about $85 billion a year), processes are quite a breeze when it comes to transferring money into India from jurisdictions abroad. However, the same cannot be said for outbound remittances where a lot of “friction” exists in the processes and the opaque bank charges for international money transfers are still a pain point.

Ten years ago, making an outbound remittance from India was an experience riddled with a lot of frustration and anxiety. If you wanted to send money abroad (say for your son or daughter’s education), you would have had to walk to a bank branch, fill up a form and then you would not know how much you would be charged for your remittance and you wouldn’t know how much you would get on the other side and when your recipient would get the money, etc. However, things are beginning to change as this is where fintechs like Wise are seeing opportunity, promising reliable transparent and cost effective technology solutions for international money transfers.

Multi-currency account

Wise, which is now regulated in 13 jurisdictions around the world including home market UK, EU, US, Canada, Brazil and several countries in Asia Pacific, currently has over 10 million people and businesses using its fully digital services.

Going forward, Wise, which now has only its remittance service in India, may also bring its multi-currency account offering that lets you hold 40 currencies in the account and convert from one currency to another, according to Saha.

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