The speaker Vaibhav Joshi Senior Vice President Yes Bank at CSI Mumbai office covered various aspects of Digital Payments.

1. Digital Payments
VAIBHAV JOSHI

2. Digital Wallets & Prepaid Payment
Ecosystem

3. Types of Prepaid Payment Instruments
 Closed Loop
 Semi-Closed Loop
 Open Loop

4. Digital Wallets
• Digital Wallet is a Prepaid Payment Instrument governed by Reserve
Bank of India’s (RBI) under the “Issuance and Operations of Prepaid
Payment Issuer guideline”
• As per RBI any Prepaid Instrument can only be issued by the following
entities:
 1) Banks
 2) Prepaid Payment Instrument Issuers (PPIs)
• Any entity willing to come up with their own digital wallet needs to be
either a PPI or should tie-up with a Bank to use their license for the
wallet issuance

5. What is a Digital Wallet?
• Digital Wallet or Wallet is a Prepaid Payment Instrument
• There are separate platform/System of Records for Prepaid Instruments similar to
the Core Banking systems that are for CA SA
• It is accessed via a mobile app or a portal app
• Wallet can be used to make digital payments only
• The limits for semi close Prepaid Instrument without KYC is 10k per month, with
KYC is 100k at any point of time
• The limits for Open loop Prepaid Instrument is 50k at any point of time, Open loop
can only be done post KYC (Bank Issued Card Plastic only)

6. Prepaid Instrument Load Methods
• Load via Payment Gateway
• Load via NEFT
• Load via IMPS
• Load via Cash

7. Bank Issued vs PPI Issued
Bank Issued Prepaid Instrument PPI Issued Prepaid Instrument
Can be semi close (eComm only) and open loop
(eComm, POS, ATMs)
Can only be semi close (eComm only)
Can work across MasterCard/VISA/Rupay
network
Can only work across the merchants with whom the PPI has
done a specific contract and tie-up
Can work across all POS terminals and eComm If a plastic is issued, it will only work on the POS terminal
which has been deployed by the PPI – more of a closed loop
type of transaction
Ability to withdraw cash at ATMs Can not be used at ATMs
Can be loaded through PG, Cash Can be loaded through PG if PPI has contracted PG services
for load, Cash only if PPI has own set of Retail network
Co brand with Bank has better visibility and
brand recognition
Co brand subject to RBI approval
Auto load through NACH, wallet to wallet,
wallet to Account etc..
Features differ from PPI to PPI, primarily used for closed user
group
Balance in Pool A/c maintained by Bank Balance in Escrow A/c, but maintained at Bank

8. Sample Transaction Flow
Use of wallet at
eComm portal
Merchant site requests
authorization from
acquiring host
Acquiring host
requests authorization
from Card host
Card host checks
balance and authorize
transaction
Card host authorizes
transaction
Settlement processed
by issuing Bank based
on the report received
from Card host
Important Note: For MasterCard/VISA/Rupay branded wallets, the acquiring switch will speak with the network
who will in turn seek authorization from the acquiring host

9. Benefits
• Instant payment and realization, no dependency on external networks
• On Us transactions, saving on transaction charges on own portal
• Secured transaction, limited exposure
• Integrated wallet, designed to simplify online payment check out process
• No need to manually input payment info every time
• Loyalty & Rewards calculation become easier with payment track record
• Faster check out process, leading to higher conversion rate and more revenue
• Universal acceptance
• Multiple acceptance modes – Web, Mobile, POS etc..
• Customer engagement, build more stickiness

10. Use Cases – Cashless Campus
 Tap & Go Payments via NFC
 Student ID plus Payments Card
 RFID for Access
 Magstrip for Payments
 Semi-Closed Loop
 Open Loop
 Accessible via Mobile App
 Merchant POS
 NFC / Magstripe acquiring
 QR Code based Mobile App based payments
 Card Not Present Mobile to Mobile Payments
 Card Not Present Sound Wave frequency based Payments
 Card Not Present URL based Payments

11. Use Cases – Card for NRIs / Foreign
Tourists
 Get Prepaid Card at Airport Money Exchange Counter
 Provide Passport as KYC
 Limit of INR 200,000
 Cash withdrawal limit of INR 50,000

12. Use Cases – Money Transfer Service
Scheme (MTSS)
 For all Foreign Inward Remittances
 Beneficiary can walk into a BC Agent outlet that is also licensed for MTSS
 Instead of taking Cash, take the proceedings on a Card
 Limit of INR 50,000
 Subject to KYC

13. Use Cases – Gift Card
 Semi-Closed Prepaid Instrument
 One time load
 Limit of INR 50,000
 No Cash Withdrawal allowed

14. Emerging Payment Methods &
Technology
 NACH
 IMPS
 UPI
 AEPS
 ABPS
 QR Code based Mobile payments

15. NACH Simplified
 NACH is the product of NPCI to provide a better & efficient Mandate based
debit services to the banks
 Automated processing and exchange of mandate information electronically with
well-defined timelines for acknowledgement/confirmation
How it works?
 Bank A/c holder fill NACH mandate and gives to Corporate
 Corporate processes NACH as per mandate for automated payments
 Payments can at a specified regular internals; OR
 Payments can be initiated upon certain instances

16. NACH

17. Aadhaar Payment Bridge (APB) System
 Used by Govt Departments for Direct Benefit Transfer (DBT) to Citizens
such as:
 LPG Subsidy
 MNREGA
 Old Age Pensions
 Student Scholarships
 30+ other welfare schemes

18. Aadhaar Seeding Process

19. APB Process Flow

20. Aadhaar Enabled Payment System
(AEPS)

21. Thank You