DISAPPEARING BANKNOTES IN INDIA: UNDERSTANDING THE TERMS SURROUNDING

DIGITAL PAYMENTS

DON’T KNOW WHAT ARE UPI, NPCI, IMPS, NEFT, OR RTGS? Don’t worry, we can help! The people of India are still adapting to the sudden demonetization of the 500 and 1000 rupee banknotes. Emerging from what experts have described as a “debacle” and utter “fiasco” in monetary policy, many Indians are frustrated by media reports that offer confusing information about India’s financial system.

FINANCE & DIGITAL PAYMENTS TERMSTo help bring some clarity to the situation, we wanted to go over some of the unclear terms in finance and digital payments that are common in media reports about demonetization. U P I

IM P S

N E F T

N PC I

RT G S

WHAT IS UPI?

UPI

Unified Payments Interface (UPI) is a digital payment system network. Using an app on a smartphone, the UPI enables citizens to transfer money between bank accounts of 19 major Indian banks. In addition to simplifying and increasing access to many basic banking services, the UPI app lets a customer to transfer funds to the bank account of a merchant to make payments without the need to share private financial information.

REPLACE CASH WITH DIGITAL PAYMENTS

The National Payments Corporation of India along with The Reserve Bank of India developed the app to encourage Indians to replace cash transactions with digital payments.For more information, see this article about UPI and the

related app in The Hindu: What is Unified Payment Interface?

WHAT IS IMPS?

IMPS

Immediate Payment Service (IMPS) is a digital payment system network. IMPS enables the instant, digital transfer of funds between major banks.

Like the UPI, the IMPS platform makes it easy to digitally transfer funds between banks using mobile phones. Using this service, citizens can transfer funds whenever they please, even during off-hours and bank holidays.

The IMPS platform is managed by the National Payments Corporation of India and operates using the National Financial Switch network.

WHAT IS NEFT?

NEFT

National Electronic Funds Transfer (NEFT) is the most extensive banking network in India to transfer funds digitally. This network provides a simple and cost-effective means to transfer funds throughout India and is popular for settling retail remittances. This banking service is available during business hours and closes for bank holidays.

WHAT IS NPCI?

NPCI

National Payments Corporation of India (NPCI) is a non-profit organization that oversees all retail payment systems in India. The organization aims to offer all Indian citizens unrestricted access to digital payment services. Endorsed by the Reserve Bank of India, the NPCI is a leader in advancing India’s “cashless society” initiative.

WHAT IS RTGS?

RTGS

Real-time gross settlement (RTGS) is a money transfer system within a country that enables the transfer of a high volume of funds between banks. Finance companies use this system to transfer money or securities instantly, where the funds are sent individually rather than bundles or batches that are mixed with other securities. The RTGS provides essential financial infrastructure for a country’s Central Bank and monetary system.

ABOUT PAYZA

Payza is a leading online payments technology platform used by licensed entities around the world. Payza's highly secure platform provides businesses and consumers with convenient and flexible solutions for sending and receiving payments worldwide. The company offers access to payment services in both traditional and emerging markets, as well as a host of tools and services including: fraud screening, dispute resolution, currency exchange, global payouts and disbursement services. With millions of members, Payza offers its services around the world in 21 currencies, and is proud to provide its merchants around the globe with a complete solution for accepting payments and managing their businesses. More information is available about Payza on its website, http://www.payza.com, Facebook, Twitter and the company's blog.