It is one of the best presentation by engineering students of RIT under the guidance of Dr. Binod Sinha

1. 1
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Engineering
Economics Students
under the guidance
of Dr. Binod SinhaDigital Payment
Revolutionary Steps
Go to cash less
A movement
Analysis by Engineering Students
Digital
Payment

2. Let’s Start

3. Digital
PaymentReady to go Cashless?

4. 1
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3
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History of Payments
From barter to mobile phones
Market Forces
Sustainable Business model of payment system
Digital Payment Methods
From Banking Cards to Micro-ATMS
Cashless Economy in India
Effects on economic factors & where India stands.
Recent Developments
Frauds in Real & Virtual World
Cyber Security for Digital Payments
Threats & Best practices
4
AGENDA

5. AGENDA
7
Capacity Building &Awareness
Initiatives, Promotion & Awareness
8
Incentivizing Digital Payment
New payment schemes
9 Demonetization
The BIG Move!
5

6. 1
INTRODUCTIO
N

7. A brief history of
payments
7
Virtual Money
E-Commerce
Written
Promises
Virtual Money
Tv Commerce
Person To
Person Money
Trasfer
Tokens
Barter
Mobile
Commerce
Chip Cards

8. Barter
8
Since the dawn of time, people have been swapping items of equivalent values. Battering still continues in many communities today.

9. Tokens
9
Small items of value such as shell or precious metal, were
often exchanged instead of large quantity of goods. These
becomes coins of value. The earliest coins were minted in the
middle east in 7th
century BC.

10. Written
Promises
Paper money is a written promise to pay the bearer a specific sum.
It was invented in China in the 9th
century as a lighter, cheaper
substitute for metal coins. Cheques extended this system of
promises between individuals. The first recorded is use was in 17th
century London as the become widespread during 19th
century.
10

11. Virtual Money
11
Money started to become invisible rather than the physical with the electrical transmission of funds by telegraph in the 19th
century and
telegraph company Western Union pioneered payment cards in 1914. It was the first company to issue a metal plaque that could be
presented at its offices instead of cash. This trend towards virtual money accelerated with automated banking. International Payment cards
and electronics money transfer
Today Is Another Day

12. E commerce
12
Europe is the most advanced Internet region in the world, with more than 190 million people online today. We spend billions of euros each
year at online retailers and more than half of these purchases are made possible by Visa. These figures are set to rise with the introduction
of verified by Visa.

13. Chip cards
13
Chip cards have the capability of carrying anything that can be digitised, on single, multi-purpose chip cards. Imagine been able to use debit
and credit accounts, download and store tickets, insurance details and much more.

14. Tv commerce
14
By 2005, interactive digital television is expected to the most common way for Europeans to go online. You will be able to visit Internet
retailers, buy what you have seen in programmes or commercials, pay spontaneously to watch premium programmes or films and settle your
house holds bills-all from the comfort of your living room.
Today Is Another Day

15. Mobile commerce
15
Worldwide, mobile telephone outnumber landlines- and they bring the freedom to buy whatever you need while you are on the move. You can choose a film,
pay for tickets and download them for the back of a taxi, or join an on-line auction. Pick up special offers sent to your handset and use them immediately
when shopping. You can always stay in contact, because you can even top up airtime you use without buying a voucher.

16. Person-to-person
Money Transfer
16
Soon you will be able to send money from your Visa account with anybody else with a Visa card in any UE country. With a new Visa direct
service, you do not have to leave your home or office and the recipient does not have to visit a bank branch to collect cash. Visa Direct allow
to transfer money from your visa card or bank account over the internet, or telephoning or visiting a bank branch.

17. Digital Payments
Methods
17
oThese cards can be used at PoS (Point of Sale) machines, ATMs,
microATMs, Shops, wallets, online transactions, and for e-
commerce websites.
oTransaction cost is NIL for customer and 0.50% to 2.25% paid by
merchant.
oService is provided by 751 banks.
Bank Cards

18. Digital Payments
Methods
18
o*99# works on USSD and it is common for all TSPs.
oMMID and MPIN is required.
oTransaction cost is NIL for system and RS.0.50 for customer.
oService is provided by 51 banks.
USSD(Unstructured Supplementary Service
Data)

19. Digital Payments
Methods
19
oAdhaar card must be linked with bank.
oTransaction cost is NIL for customer and merchant may get
charged or paid based on bank‘s discretion.
oService is provided by 118 banks.
AEPS(Adhaar Enabled Payment
Service)

20. Digital Payments
Methods
20
oMultiple bank accounts in single application.
oApplications like BHIM,SBI UPI app,HDFC UPI app.
oTransaction cost is NIL for customer.
oService is provided by 30 banks.
UPI(Unified Payment Interface)

21. Digital Payments
Methods
21
oWay to carry cash in digital format,
oMost banks have their e-wallets and some private companies. e.g.
Paytm, Freecharge, Mobikwik, Oxigen, mRuppee, Airtel Money,
Jio Money, SBI Buddy, itz Cash, Citrus Pay, Vodafone M-Pesa,
Axis Bank Lime, ICICI Pockets, SpeedPay etc.
oTransaction cost is 0.50% to 2.50% for customer.
oService is provided by 40 companies.
Mobile Wallets

22. Digital Payments
Methods
22
oNational Electronic Fund Transfer(NEFT).
oReal Time Gross Settlement(RTGS):for large transactions.
o Electronic Clearing System(ECS):mostly used to pay bills.
oImmediate Payment Service(IMPS):inter bank fund transfer
service.
Internet Banking

23. Digital Payment
Methods
23
Mobile Banking
oAllows its customers to conduct
different types of financial
transactions remotely using a
mobile device such as a mobile
phone or tablet.
Point of Sale
oA point of sale (PoS) is the place
where sales are made.
Bank Prepaid Cards
oOn loading the pre-paid card,
Customer may pay service charges
for transaction or fixed fee, upfront
+ each transaction.
oAll leading banks.

24. Cashless
Economy

28. GDP Gross Development Product-It represents the total dollar value of
all goods and services produced over a specific time period
•Increase in card penetration can increase GDP
•Every transaction is recorded
•Going digital will adversely affect the GDP in the short term but
the digital economy with a substantially hike up GDP in the long
term
28

29. Financ
ial
Inclu
sion
Delivering financial services at affordable prices to sectors of low
income segment of society.
•If govt will excersie quality control and speed on infrastructure.
•Banks are also focusing on semi-rural and rural areas.
•financial literacy and access to other financial services for
customers
•According to the recent World Bank report, developing and
accelerating electronic merchant payments at the broader level
can help countries advance financial access and financial
inclusion.
29

30. Shado
w
Econo
my
Black money and undeclared work
•Cash perpetuates shadow economy
•Cashless transactions reduce it.
•Black money is around 19% of india's GDP
•In perspective, a 2015 study estimated the retail market at INR
5,88,000 crores with 12million retail outlets; where the
unorganised market share is INR 5,83,000 crores and the
organised market is worth Rs 5,000 crore.! And this is just retail.
30

31. Job
Oppor
tuniti
es:
• Technical advancement will boost jobs in the IT sector, as
more of tech experts will be required to have proper control
over the digital world
• A study suggest that electronic payments added $296 billion
to GDP in the 70 countries studied between 2011 and 2015,
which is equivalent to the creation of ~2.6 million jobs on
average per year over the five-year period, or about 0.4% of
total employment in the 70 countries.
31

32. E-
comme
rce
• E-commerce, m-commerce portals and digital wallets - Paytm,
MobiKwik, FreeCharge, PayUmoney, etc., have seen an
unprecedented surge in usage and the opening of new
accounts.
32

33. Better
tracki
ng of
invent
ory
Better tracking of inventory
•For small businesses, mobile payment services allow you to
track customer’s trends so that you can sever your customers in a
better way.
•Mobile payments allow you to track inventory and customer
behaviour. You can even learn about customers and use the
respective information to improve services.
Content Based Recommendation (CBR):
CBR provides personalized recommendation by matching user’s
interests with description and attributes of items
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34. Reven
ue
from
new
chann
els
• Ability to generate revenue from new channels and digital
financial services (if they keep balances with banks and other
PSPs-payment service providers)
• A payment service provider (PSP) offers shops online services
for accepting electronic payments by a variety of payment
methods including credit card, bank-based payments such as
direct debit, bank transfer, and real-time bank transfer based
on online banking
• Value-added services that come bundled with payments, or for
making or receiving payments (loyalty, credit, marketing
support).
34

35. Reduc
e
money
theft
We often hear people saying that somebody has looted their
money. Such things will become a thing of the past
35

36. Good
For
Indust
ries
Going digital decreases the operational cost and increases the
efficiency of the workforce which will help industries to grow at a
faster pace.
36

37. Infras
tructu
re
Infrastructure is a huge flag, the diversity of language and
economic strata - all pose unique roadblocks for compliance,
compatibility and adaptation of demonetization. We are talking 1.2
billion people with a huge chunk lacking even for the basic
necessities including, food and water.
37

38. People
’s
mindse
t
Urban India though a different story will also need unravelling.
Many people, especially the older population, housewives, even
working professionals, etc., will not overnight change their habit of
hard cash to the plastic transaction. And cash is not black money.
To be noted is also the potential mental risk of safety for some;
there is no cashback if everything is wiped out fraudulently
38

39. 39
Internet Payments
are increasing
dramatically
n
2
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a
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40. 40
There is huge fraud
on payment cards
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4:
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ll

41. The industry is taking steps to
reduce these losses
41
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42. Securing Internet
Payments: PAIN
Privacy
Is the message secure ?
Authentication
Is it from whom we think it’s
from?
Integrity
Has the message been tampered
with?
Non-Repudiation
Can the sender not later claim it
wasn’t them?
42

43. 01 02 03 04
43
Why did SET
fail ?
Secure Electronic
Transaction (SET)
was a standard
designed to provide
Internet payment
security
SET was designed by
technologists
Very secure, very sophisticated
…
… and very hard to use !!
No thought given
to implementation
Merchants don’t want it until
customers have it
Customers don’t see a need if
merchants don’t use it
An expensive
lesson: Security
and useability
are a trade-off

44. To
e
n
A
ut
h
e
nti
a
o
n
M
o
d
el
M
as
e
C
ar
d
C
A
P
U
e
a
C
hi
p
&
PI
N
a
d
a
n
What will provide secure
Internet Payments
44
S
m
ar
C
ar
d
R
e
a
d
er
n
P
C
T
hr
e
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D
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ai
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es
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a
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pti
n
g
h
es
e
S
o
m
et

45. Cyber Security
45
Authentication
The first step in protecting data is to verify the identity of the person who is attempting to access it.
With sensitive mobile data, traditional username and password authentication isn't enough.
Authorization and access Controls
Once identity has been established, the system must be able to determine which data files that user i
s allowed to open and what level of access he/she can have (read only, modify, delete, etc.)
Encryption
Web--based data traffic is usually encrypted using Transport Layer Security (TLS).

46. Cyber Security
46
User education
Ensure that mobile users are aware of your best security practices and understood how to apply
Them.
MDM and MDA
 MDM system allows you to create and apply policy- based security to all of the mobile devices.
 MAM helps you keep mobile apps updated and configured correctly for best security
Back it up
Ensure that data can be restored after a device is damaged, wiped or lost, by taking advantage of
data backup capabilities supported by each mobile OS.

47. Threats to Mobile Bank
ing
47
Mobile Banking Malwares
There have been incidents that involved sophisticated virus infecting banks mobile apps.
Phishing/Smishing/Vishing Attack
An attacker attempts phishing on to a mobile phone through SMS (Short Message Service),text
message, telephone call, fax, voicemail etc. with a purpose to convince the recipients to share their
sensitive or personal information.
Jailbroken or Rooted Devices
This is practiced to gain unrestricted or administrative access to the device's entire file system, at the
risk of exposing the device vulnerable to the malicious apps download by breaking its
inherent security model and limitations.

48. 48
Best Practices for User
s to remain safe
Bank account number or
IPIN should not be stored on
the user’s mobile phone
User should download the
mobile banking apps for
trusted app stores such as
google play or Apple Store.
Enable Passwords On
Devices
The user should report the lo
ss of mobile phone.

49. 49
Best Practices for User
s to remain safe
Have Decent Password and
Encryption.
Avoid Clicking on web-links
from unknown sources.
Avoid Unknown Wi-fi
Networks.
Use Social Media network
Applications Carefully.

50. 50
Market Forces that
Determine the
Payment Model

51. Public Policy Issues determine the shape of a
payment system
Banking Regulation
Banking prior to 1967
Indian banking regulation act 1949
Pricing Transparency
Competitive Framework Required
Anti-Monopolistic Behaviour
Must not exclude potential entrants
Banks DO operates as a cartel
Security and Fraud Issues
Money Laundering, criminal funding
51

52. T
h
er
e
h
as
o
b
e
a
c
h
e
m
e
o
e
h
e
u
e
o
d
ec
d
e
a
bil
y
A brand is a pre-requisite of
any payment system
52
T
h
er
e
h
as
o
b
e
a
e
tl
e
m
e
nt
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ec
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as
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br
a
n
d
o
et
o
ns
u
m
er
n
o
w
w
h
at
o
ex
p
ec

53. 01 02 03 04
53
Merchants are crucial
to a payment system
Banks have a
comprehensive
Merchant Account
base
Relationship is much
more than payments
Enrolment, retention, training,
support
Banks often make
more money from
merchant
relationships than
consumers
There is huge
tension between
banks and
merchants

54. 1
CAPACITY
BUILDING AND
AWARENESS

55. DIGISHALA
E
D
U
C
A
TI
O
N
A
T
V
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55

56. 1
2
3
4
5
DigiShala Subscription Details
56
Free to Air (FTA) Channel with receiving frequency: 11590 MHz
Satellite/Location: GSAT 15 (DD Direct DTH), 93.5 degree East
Broadcasted nationally on DD Free Dish DTH service
affordable service without any subscription fees
DigiShala TV Channel is also available on channel no 2032 on Dish TV
(of Zee Group)

57. 1
2
3
4
5
DigiShala Programme Portolio
57
Range of educational programmes on Digital India in multiple regional languages Sessions with focus on:
Step by step demos of making digital payments using UPI, USSD,
Aadhaar, e-Wallets, cards etc
Talk shows and panel discussions with experts
Case studies on business transformation using digital payments
Information about products and services under the Digital India
programme.
Programme schedule of DigiShala TV channel.

58. SCHEM
ES
“Digital Finance for Rural India: Creating Awareness
and Access through Common Service Centres
(CSCs)” under Digital Saksharta Abhiyan (DISHA) with
objectives to enable the CSCs to become Digital
Financial Hubs, by hosting awareness sessions on
government policies and digital finance options
available for rural citizens
58

59. VITTI
YA
SAKSH
ARTA
ABHIY
AN
(VISA
Ministry of Human Resource Development
(MHRD) views the institutions of higher education in
the country, faculty members and students to take the
lead and act as engines of this transformational
shift.The purpose of the `Vittiya Saksharta Abhiyan’ is
to actively engage the youth/ students of Higher
Education Institutions to encourage and motivate all
payers and payees to use a digitally enabled cashless
economic system for transfer of funds.
59

60. PROMOTING DIGITAL PAYMENTS AMONG
PEOPLE

61. BHARAT INTERFACE
FOR MONEY (BHIM)
Bharat Interface for Money (BHIM) provides fast, secure, reliable medium to make
digital payments through your mobile phone using UPI (Unified Payment
Interface) platform via Mobile App and USSD (Unstructured Supplementary
Service Data) platform via *99# service.
61

62. BHARAT INTERFACE FOR
MONEY (BHIM)
62
Send / Receive Money:
Send money to or receive money from
friends, family and customers through a
mobile number or payment address
Check Balance:
You can check your bank balance and
transactions details on the go.
Custom Payment
Address:
You can create a custom payment address
in addition to your phone number.
Transaction Charges:
For transactions up to Rs 10,000 : not
exceeding Rs 2.50 (+ Service Tax)
Transaction Limits:
Maximum of Rs. 10,000 per transaction and
Rs. 20,000 within 24 hours. The limit for
USSD has currently been set at 5,000 per₹
day.
QR Code:
You can scan a QR code for faster entry of
payment addresses. Merchants can easily
print their QR Code for display.
How does
it work?

63. 1
2
3
4
5
Benefits:
63
1 digital payment app for all bank accounts.
Money remains in your bank account, so you earn interest.
BHIM framework *99# works without internet.
Transaction from 1/- to 10,000/-₹ ₹
Daily transaction limit of 20,000/-₹
The main purpose of BHIM
App is to provide uniform
experience of UPI and also
to support those banks who
have not developed any UPI
app for their customers as
yet”

64. Incentivizing Digital
Payment
64
L
uc
y
G
a
a
Y
oj
a
n
a.
Di
gi
V
a
p
ar
Y
oj
a
n
a

65. Promoting and
Rewarding Digital
Payments
65
Coverage
• Digital Transactions through RuPay Cards, UPI, AEPS & USSD
• Transactions between 50- 3,000₹ ₹
Awards
• Separate incentives for Consumers and Merchants
• Random draw of Digital Transaction Ids to select awardees
Implementing Agency
• National Payment Corporation of India (NPCI)

66. 1
2
3
4
5
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67. What Happened on
Demonetization?
67
On 8th November 2016, Government of India had announced
that from today onward rupees 500 and 1000 rupee note will not
be a legal tender.
Means that 500 and 1000 rupee notes will not
be accepted by anyone except the
organization declared by the government.
Public can deposit and change the currency
from the banks and post offices till 30th
December 2016.

68. Towards A Cashless Economy
68
Wh
e
ra
ti
all
m
os
bl
o
av
a
00% cashless economy
he
of
ar
as
n
he
co
o
my
ill
ec
ea
e
nd
ur
co
Now government has put Some limitation for
Cash Withdraw from bank Accounts. People
Will go for online payments.
They Will use PayTM Or other online payment
to companies for Buying goods or Making
payments.
More Use of Debit and Credit Card

69. 69
Ef
e
t
o
n
P
r
ll
l
E
o
n
o
m
Ef
e
ct
s
o
n
M
o
ne
y
S
u
p
pl
y
The removal of these 500 and 1000 notes
and replacement of the same with new 500
and 2000 Rupee Notes is expected to –
remove black money
W
t
h
l
e
0
n
0
0
R
p
e
o
e
e
n
c
Ef
e
t
o
n
D
m
n
d
The overall demand is expected to be affected to an extent. The demand
in following areas is to be impacted particularly:
Consumer goods
Real Estate and Property
Gold and luxury goods
Automobiles (only to a certain limit)
Ef
e
t
o
n
Pr
c
s
ri
e
v
xp
ct
d
o
e
ow
re
u
o
mo
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e
ma
d
d
hi
e
ma
d
ri
en
all
Ef
e
t
o
n
G
D
P
Impact of Demonetization on Indian Economy
he
DP
r
ati
n
ul
be
mp
te
by
is
ea
re
th
du
io
in
e
ns
mp
on
m
d.
or
ve
is
pe
ed
mp
t
n
DP
ay
ot
gni
ca
m
of
is
m
d

70. Effect on Online
Transactions and
alternative modes of
payment
With cash transactions facing a reduction, alternative forms of
payment will see a surge in demand.
Digital transaction systems, E wallets and apps, online transactions
using E banking, usage of Plastic money (Debit and Credit Cards),
etc. will definitely see substantial increase in demand
This Will Bring More transparency In System And You can Easily
track Online Money Transactions
70

71. Thank You
Any Questions?