What is NPCI?
National Payments Corporation of India (NPCI), an umbrella
organization for operating retail payments and settlement systems
in India, is an initiative of Reserve Bank of India (RBI) and
Indian Banks’ Association (IBA) under the provisions of the
Payment and Settlement Systems Act, 2007, for creating a robust
Payment & Settlement Infrastructure in India.
Why was it incorporated?
The main agenda of NPCI is to provide the whole
banking sector with better infrastructure to bring both
physical and electronic payment and settlement
systems. The retail payments for business and day-
to-day transactions need to have an effective
settlement system for both physical and electronic
payments. To accommodate this, the NPCI was
incorporated.
Objectives;
The main objective of NPCI is to consolidate,
combine, and integrate multiple systems for
payment with different service levels into one
nationwide standard uniform and business process
for all the retail payment transactions. It is set up
under the guide lance and support of the central
bank RBI and the Indian Banks Association.
Another objective of NPCI to design and facilitate
an affordable payment process or mechanism so
that the common man who makes retail payments
on a day-to-day basis benefits from the process by
saving the cost and time.
Objectives:
Thus NPCI exists in designing and implementing a
nationwide mechanism that is affordable for
retailers to use on a day-to-day basis without
losing credibility and making sure the same
process is standardized across the country. The
uniformity is also maintained.
Composition:
NPCI works with ten core promoter banks across India. These include:
StateBank of India Bank of India
Bank of Baroda Union Bank of India
Canara Bank HDFC Bank
Punjab National Bank ICICI Bank
HSBC Bank Citibank India
What does NPCI offer?
NPCI has made its valuable contribution to the banking sector through its
products from time to time. The products and their significance are listed
below:
NFS: National Financial Switch (NFS) ATM network with 37 member
banks and connecting 50,000 ATMs was taken to NPCI’s authority from the
Institute for Development and Research in Banking Technology (IDRBT)
on 14 December 2009. After taking over, NFS ATM network has grown
many folds. As on 31 July 2019, there were 1,140 members with more than
2.41 lakh ATMs connected to the network.
IMPS: Immediate Payment Service (IMPS) lets you transfer money in real-
time around the clock, 365 days of the year. At the time of introducing
IMPS, consumers only had the NEFT and RTGS facilities that were limited
to the bank working hours. NPCI conducted a pilot study of the technology
with banks such as SBI, BOI, UBI, and ICICI in August 2010. It was
publicly launched on 22 November 2010.
AePS: Aadhaar-enabled Payment Service (AePS) is a result of the
attempt to further speed track financial inclusion in the country. AePS is
a bank-led model that allows online interoperable financial inclusion
transaction at PoS of any bank using the Aadhaar authentication through
the retail merchant. A customer must provide details such as bank
identification, Aadhaar number, and fingerprint to complete such a
transaction.
Bharat BillPay: Bharat BillPay is a system conceptualized by the
Reserve Bank of India (RBI) and driven by NPCI. It is a one-stop-shop
for all bill payments, such as mutual funds, insurance premiums, school
fees, telecom, electricity, DTH, gas, water and more. It provides an
interoperable and accessible service to across India. The system is
reliable and safe for usage. You can also set up recurring payments on
the window. A confirmation of the payment will be sent to you via SMS
or receipt.
CTS: Cheque Truncation System (CTS) facilitates extended cut-off
time to accept customer Cheque by banks and reduces timelines for
clearing. CTS has also eliminated the cost involved in the paper
movement. It uses the digital signature/encryption methods to
prevent manipulation of data/image during transit.
RuPay: RuPay is a new card payment system launched to satisfy
RBI’s vision to offer a domestic, open-loop, and the multilateral
system. This made it easier for Indian banks and financial
institutions to implement electronic payments. The term ‘RuPay’ is
a combination of Rupee and Payment. NPCI also developed RuPay
Contactless payments technology using open standards.
NACH: National Automated Clearing House (NACH) is a
web-based solution that facilitates interbank, high volume
electronic transactions that are repetitive in nature. They are
well suited for bulk transactions towards the distribution of
dividends, interest, subsidies, salary, pension, and more.
APBS: Aadhaar Payment Bridge (APB) System is used by the
government and government agencies to make direct benefit transfers
with respect to various Central and state-sponsored schemes.
*99#: *99# is a USSD-based mobile banking service of NPCI
launched in November 2012. Then, the service had limited reach as it
was available only with MTNL and BSNL networks. In August 2014,
*99# was reintroduced with a wider ecosystem including 11
telephone service providers by the Prime Minister. After the launch of
UPI in 2016, the *99# service aimed to take banking services to every
common man in the country.
UPI: Unified Payments Interface (UPI) is a system that makes
multiple bank accounts to be accessed from a single mobile
application. Users can make instant money transfers through mobile
devices round the clock, any day of the year. The technology also
features peer-to-peer collect request service with a scheduling facility.
BHIM: The introduction of the concept of UPI, an app named Bharat
Interface for Money (BHIM) was launched to make payments simpler
and easier. Instant bank-to-bank payments can be made using a mobile
number or virtual payment address (UPI ID).
BharatQR: Basically, a QR code is a series of black squares arranged in
a square grid that can be read by a camera. NPCI, together with the
international card schemes, developed a common standard QR code
specification. This led to the creation of Bharat QR (BQR), a person-to-
merchant mobile payment solution. When a merchant displays a BQR
code, the user can scan the code via BQR-enabled mobile banking app
and make the payment using a card-linked account.
BHIM Aadhaar Pay: This is a payment interface through which you
can make real-time payments to merchants using Aadhaar number or
VPA of the customer followed by a round of authentication through
biometrics. Such a transaction is limited to Rs.10,000 per transaction.
NETC: National Electronic Toll Collection (NETC) is a
nation-wide programme designed to meet the electronic
tolling requirements in India. It is an interoperable toll
payment solution that includes clearing house services for
settlement and dispute management. NETC uses a common
set of processes that enables customers to use FASTag as a
payment mode at toll plazas irrespective of who controls the
toll plaza.
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