Payment Systems – The Essential Next Step for UCBs in India

Growing economic activity, everyday commerce and easy accessibility has made payment systems an integral part of a country’s financial framework. Payments systems contribute to the GDP of a country by facilitating convenient and hassle-free business transactions while reducing the processing costs, meeting regulatory compliance, simplified dispute management, greater transparency in financial supply chain and opportunities to cross-sell in a highly efficient, accurate, timely, instantaneous and secured way. Retail payments in India have registered a remarkable growth of 27% in volume and 6.73% in value in the year 2014-2015. This unavoidable potential of payments has not gone unnoticed by regulatory bodies and market giants. Approval of Payment Banks and Small Finance Banks has opened up new arenas of differentiated banking which can disrupt the existing market segmentation of the banking industry. Another tough competition is posed by Payment Service Providers (PSPs) and Telcos who are capturing the payments market through digital wallets and similar unorganized payment mechanisms. According to a study, India is expected to have 314 million mobile internet users by 2017. Smartphones are looked upon as an emerging, hassle-free banking channel. Technology is leveraged to build smarter systems to touch pain areas of banks like Know Your Customer (KYC), seamless channel integration and overall reach to the end customers. By far, UCBs have been at the bottom of the banking pyramid serving the masses of the rural areas. However, in this current wave of revolutionary changes in Indian banking scenario, UCBs will have to sustain, develop, compete, promote and innovate to stand strong against the wind.

In the existing market segmentation of bank customers, metropolitan cities and developed urban areas majorly fall under the purview of public sector and private sector banks. Foreign banks also have significant amount of market share. On the other hand, cooperative banks and especially UCBs have been taking care of the needs of middle and low income groups. Introduction of Payment Banks and Small Finance Banks can bring alteration to this segmentation and pose a tough competition for UCBs through their network of Business Correspondents (BC), other networking sources and widespread use of technology. While the goal is the same of Financial Inclusion, the methods applied would be different. The UCBs need to gear up – first, by having a sound core banking system; second, by participating in the National Financial Switch (NFS) network of ATMs through NPCI and third, by developing alternative channels of banking like mobile, internet, USSD, Aadhar etc through IMPS. This will not just help in sustaining their existing customers but also attract new set of customers who are looking out for smart and convenient services like those provided by other types of banks.

By interfacing with the National Financial Switch (NFS) of NPCI, the UCBs get an access to host their customers through a network of 2,15,000+ ATMs across the country in a cost-effective manner. RuPay is the domestic brand of cards which can be issued by the banks at reasonable eligibility criteria. Recently, NPCI has also announced the facility to issue credit cards in addition to the existing debit card scheme. RuPay cards can help in customer education and propagate a gradual shift from cash to plastic money as these cards can be used at ATMs, POS and e-commerce platforms. It is worth mentioning the impact of e-commerce on payments. With large number of businesses going online, e-commerce is indispensable for all groups of customers and UCBs need to be prepared for it. In addition to this, RuPay can act as a competition against international card schemes, enable customized products for domestic audience and ensure that payment information lies within the country’s infrastructure.

Nothing can be more attractive than a service which is 24x7x365 for a customer. Immediate Payment System (IMPS) is an interbank electronic payments mechanism that enables customers to use mobile instruments, internet banking and ATMs as channels for accessing their bank accounts and placing fund transfer in a secured manner. Currently, IMPS facilitates transactions like are P2P (Person to Person), P2A (Person to Account), P2M (Person to Merchant), M2P (Person to Merchant) & P2U (Person to UID).

As per a study from Cisco, India is the third largest smartphone market globally and is expected to have 651 million smartphone users by 2019. While according to US based firm – VNI (Visual Networking Index) forecast, the number of tablets will be 18 million by 2019. Decreasing prices of the devices, ease of use, advent of 3G and 4G services and competitive data tariff plans have given a boost to smartphone market and mobile internet penetration in the rural areas as well. A report by IAMAI and KPMG says that while 3G and 4G will remain an urban phenomenon, 2G will remain in limelight for rural growth. The report has also projected that India will reach 236 million mobile internet users by 2016, and 314 million by 2017. While channels like mobile and internet can be used for smartphone users, USSD and SMS channels of IMPS can serve feature phone users effectively. This opens up another facet for UCBs which they should tap.

Aadhaar Enabled Payment System (AEPS) – a bank led model is more a door-to-door banking which uses Aadhaar number and finger print to perform basic bank transactions at PoS (Micro ATM) through the Business correspondent (BC). The objective of AEPS is to empower a bank customer to perform basic bank transactions through a BC by using his Aadhaar number which is mapped to his Bank account. This will also help to achieve RBI’s goal of electronification of retail payments and Financial Inclusion. Under Aadhaar Payment Bridge System (APBS), the disbursements of Government entitlements like NREGA, Social Security pension, Handicapped Old Age Pension etc. of any Central or State Government bodies would be directly credited in Aadhaar enabled accounts of intended beneficiaries without any leakage or pilferage. UCBs being more close to the rural segment that may lack awareness about these benefits have to consider this as a powerful support to their fundamental vision of growth, development and social upliftment of rural areas.

Emerging Trends

Once the UCBs masters the above mentioned infrastructure, they are ready with a strong foundation for a host of upcoming trends in the field of Banking. As rightly quoted by Mr.Nandan Nilekani, ex-chairman of Unique Identification Authority of India (UIDAI) – ‘We are now having WhatsApp moment in financial services in India’. The rules are changing, conventional methods are fading away and the customer is getting smarter. Telcos and PSPs are now providing digital wallets to their customers. Every person with a mobile phone can be a potential BC. In such situation, UCBs will have to broaden their horizon and come up with fresh ideas of digital banking. Some new services like UPI and BBPS are in limelight for the kind of potential they hold to coalesce multiple features and entities together.

Unified Payment Interface (UPI) of NPCI aims to provide a single interface across all existing retail payments channels like IMPS, AEPS, NFS etc. Third party API integration can collect payment from a virtual address without the need to share account details or credentials on 3rd party applications or websites. This will enable banks to come up with Universal apps for payments ensuring security, use of unique identifier, opportunity to tap Customer to Business (C2B) segment and E-commerce & M-commerce (PULL initiated) transactions and all this with a simplified one-click authentication system.

Bharat Bill Payment System (BBPS) will offer interoperable bill payment service online as well as through agents. It will facilitate recurring bill payments like utilities bills, school fees, DTH, etc. under a common platform without having the need to go to different offices or different websites. In this system, NPCI will act as a Bharat Bill Payment Central Unit (BBPCU) while Banks can act as Bharat Bill Payment Operating Units (BBPOUs) accepting payments from the customers.

Any Time, Any Place, Any Device is the new mantra of future payment systems. There is a lot more scope in the technologies like Near-Field Communication (NFC), Augmented Reality, One-Touch Authentication, etc. which can bring amazing changes to the digital banking ecosystem. They are just round the corner.

It’s time for UCBs to strengthen existing competencies and explore new opportunities. They need to analyze the market, identify competition and beat them. At the same time, they have a great privilege to educate their huge customer base and in turn gain firm support for new initiatives. This can be achieved by developing a trained and skilled manpower who can communicate with customers the benefits offered and in turn educate, publicize, give assurance and make their customers comfortable using these products. UCBs need to analyze and understand how they can leverage these services through cost-effective methods and optimum infrastructure utilization. They can engage with a right technology partner who can understand their needs as well as limitations to provide robust, scalable and secure solutions to them at the right time.



What brings business in limelight, is how different you are..! It’s all about bringing a new product to your kitty. With the innovation in technology, Pelorus shifts the traditional way of integrating multifactor authentication by providing it on protocol level. Pelorus breaks the thick ice of insecurity in different business aspects by introducing 2FA (two factor authentication) Technology ‘Authshield’ which can be integrated in any and every software.

So what is it that you understand by 2FA? Is it only the OTP (one time password) that you receive on your phone or is it much complex than that? Pelorus redefines the complexity of 2FA. This new technology is an additional layer of security provided on a user level. It is a combination of two checks, as the name itself suggests, and could be any one of these- something which you know, something which you possess, and something the user is..!

Having knowledge is half the battle but other half is about how we implement it. So let’s talk about the implementation of 2FA on protocol level. The patented part of protocol Decoding Engine is placed between the system and the server thereby helping to authenticate every user in any and every application. Eliminating the dependence on source code and thereby giving an inherent support to any and every software. Unlike our traditional way of making the Second factor of authentication in application level depending on Source code. This has allowed the integration of 2FA in different applications as in SAP and different cloud based services.

We are one of few Indian companies to develop multifactor authentication which is OATH certified (Open Source Authentication Certificate). Our multifactor authentication software is an authentication platform which can be integrated with any platform like applications, database, mails, client logins, etc etc……… We have also provided a mapping feature which enables the user to map the devices for his authentication, and if some new device is used to login through our platform- a dialog box/prompt is popped up asking for confirmation, hence providing a layer of security. The second factor of authentication could be any of the following- OTP (one time password), One Touch Confirmation, and Facial Biometrics. One Touch Confirmation removes the laborious time consuming process of re-entering the 6- digit password by a simple click saying confirm or deny. Facial Biometrics is upto 97.1% accurate where the user’s face gets scanned and bypasses the OTP method to grant access to the user. Facial Biometric is so designed to detect the difference between a photo and a real person and it will grant access to only the user, thus making it secure. These features helps the user customize his authentication settings, giving them a good user experience.

AuthShield Multifactor Authentication is easy to use, secure, and customizable too. It is a very promising product and will find much usage in the near future based on the upcoming events like PM Modi’s ‘Jan Dhan Yojna’ where more than 750,000 new bank accounts are estimated by the end of 2016 and they are going to need multiple security layers for access to account details and for making transactions. AuthShield MultiFactor Authentication gives you a sense of safety while handling any personal data digitally.

Bharat Bill Payment System

Nowadays carrying money around physically has become so outdated. People go around with various credit/debit cards which serves the needful. The next big thing- digitalized and centralized payment systems.  Bharat Bill Payment System (BBPS) provides a platform for unified payment system across the nation. The platform intends to build an inter-operable service through a network of agents, enabling multiple payment modes along with instant generation of receipts of payments. It would connect the utility services like water companies, DTH and telecom with a plan of expanding and covering school fee, university fee, municipality taxes, mutual funds, insurance premiums on one end and all payments service providers on the other.

So why should one use BBPS? What  are it’s benefits?

The biggest advantage to customers is that the bill can be paid anywhere and anytime. There would be retail points for bill payments across the country who would be able to accept all kinds of bills payments made through credit cards, debit cards, mobile wallets, net banking.

The BBPS outlets would include banks, ATMs, business correspondents, kiosks etc. and payments would be made securely through the NPCI network with instant receipts getting generated. Along with this, utility service providers would be able to get payments instantly, they would not need to maintain bill collection centres by themselves, value added services can be added by the operators, bills can be generated electronically and disbursal can also be electronic. Along with these, the BBPS platform would have fraud monitoring and risk mitigation systems in place in order to ensure smooth online transactions.
Also, start repaying your loans on time and be prudent with your bill payments since it is going to be a transparent system that would reward individuals who are paying their financial liabilities on time. Banks would be able to see the newcomers paying their dues timely and the possibility of default would be relatively low as compared with one who is not able to pay his bills on time. Such product innovations will create a win-win situation for both customers and the banks.
As a part of the Digital India initiative, NPCI is planning to make bill payments digital across the country. In 2013, RBI had estimated that around 3,080 crore bills were generated amounting to Rs 6,20,000 crore in the top 20 cities. This is expected to rise to Rs 9,30,000 crore by 2019, and BBPS will be one big leap.

Unified Payment Interface

One of the latest products launched to run on the front end of mobile banking is UPI- unified payment interface. UPI can be thought of like an email ID for your money. The user can perform all sorts of money transactions without sharing any personal data like account number or IFSC code. The idea behind UPI is to get away from all the painful process of entering details on your phone, and even after that usually banks take upto 12 hours to add a new beneficiary.

So let’s see how does UPI really work now. The interface basically creates a single platform where users can make quick payments and money transfers on request and it does not consume much time either. Taxi aggregators like Uber and Ola, food ordering services like Zomato and Food Panda, online grocery shops like Big Basket will be able to take advantage of the UPI system. Going forward, such companies should be able to register its identifier on the UPI system and receive funds from a customer’s bank account through the UPI. Most of the similar tech companies are now banking on mobile wallets. This platform connects different branches of different banks and makes banking secure.

UPI will offer architecture and a set of standard APIs that will allow account holders across banks to send and receive money from their smartphones using just their Aadhaar unique identity number, mobile phone number or virtual payments address without necessarily entering bank account details. It is a layer that will allow interoperability by sitting atop the
existing infrastructure (like FinMobiconnect) of banks.

UPI offers many benefits to banks and at user level. It will facilitate the following to banks

  • Universal App for Payments
  • Security
  • Payments basis Single/Unique Identifier
  • Opportunity to tap Customer to Business (C2B) segment
  • Opportunity to tap E-commerce & M-commerce (PULL Initiated) transactions
  • Simplified (Single click 2FA) authentication

Benefits to customers:

  • Privacy: Customers shall be able to transfer funds without revealing their personal details like mobile number / account number.
  • Multiple Utilities: Collect request can be initiated to pull funds from the Payer, thus it has multiple utilities and applications and in many cases cash can be replaced. Cash on delivery bill split sharing etc.
  • One Click 2 FA: Easy & Convenient for the customer to authorize transaction by entering only PIN.
  • Works across various interfaces (PULL): Payment request can be generated in Web interface (in desktop) and can be authorized in Mobile interface (App) in later phases.

UPI is a great step in right direction and its is set to become an efficient alternative to mobile wallets and make cashless payments faster, easier and smoother for millions of people in India.


With the growing technology, one more necessity has been added in our lifes- Mobile Phones!! The irony lies in the fact that just the other day i saw a street beggar around with a ‘samsung top end model phone’! Also there is the ever rising traffic, and pollution, and people are always in a hurry, not to forget the waiting period where a man spends hours standing in queues. This had posed a big problem for people who want to do banking transactions. Traditionally, cheques have been the preferred method for making payments via banks. Cheques suffer from two drawbacks – one is the cost involved – on an average processing a single cheque costs a bank around Rs. 50. The other problem is the delay in receiving payments.

FinMOBICONNECT comes to rescue. FinMobiconnect helps the banks increase their clientele, by providing them with easy and time saving services as in this case- Immediate Mobile Payment Services (IMPS). With the arrival of IMPS, banks have a low cost, easily available channel to offer payment services. There are more mobile devices in India than there are internet connections or even bank accounts. India, alone has over 600 million mobile phone users – and the numbers are growing every month. All these mobile phone users make and receive payments every day. The need of the hour is to combine the two to provide the easiest, most convenient payment channel to the customer – an instant mobile payment service.

The few main features of FinMOBICONNECT can be listed below:

  • No more sharing of bank account details.
  • Credit and debit confirmations to sender and receiver.
  • Flexible enough to accommodate various mobile devices, networks, channels and transportation layers.
  • 24 x 7 availability and entire solution owned by the bank for complete control.

A few advantages of using FinMOBICONNECT:

  • Future ready- FinMOBICONNECT gives financial institutions a competitive edge by integrating state of the art technology with a host of innovative mobile marketing and advertising features.
  • FinMOBICONNECT can easily be adapted to on-Line payment for buying goods and services on-line; top up of pre-paid mobiles; buying airline, rail, bus and movie tickets; and other bill payments.
  • The result is a secure and scalable platform that helps banks to increase loyalty, acquire new customers, cross-sell products plus much more.
  • IMPS ensures a safe and secure method for making payments. The combination of mobile number and MMID ensures that the amount is not sent to a wrong recipient, which helps banks build trust with their customers.

So, with the evolution of humans, societies, and Mobile Phones- Finacus brings a smart solution to meet banks and their customers needs with this software.


This software goes hand in hand with FinLUNA. Well, when banks provide loans to their customers they take some security or a guarantee. On improper payment of dues, the banks have to initiate proceedings against the borrower with a notice and send a preliminary notice of default to the borrower and the Guarantors/sureties, intimating the default and emphasizing the bank’s right to recourse.

Then the banks have to give more time to these bad accounts right from the initial stage, and try to protect them from slipping into non-performing assets(NPA’s). In order to do this, often other accounts get neglected and start slipping into NPA’s too. This creates a havoc and becomes very difficult to manage for the banks. It also puts the bank’s reputation on stake. Finacus comes with a solution for the banks: FinLEGAL. FinLEGAL gives a solution to this long pending issue of monitoring and follow up of NPA.

The few main features of FinLEGAL can be listed below:

  • Provides complete end to end solution with MIS on set parameters.
  • Strengthens the existing system of monitoring and follow-up of borrower accounts.
  • Computation of cost of legal action for every action initiated and the quantification of resultant recovery of debts.
  • Helps to set up a procedure for time bound action plan at the Branch & Recovery Department level for initiating Recovery action, filing suits/ Arbitrations/cases, Executions of awards/ Recovery certificates, Tracking appeals & Applications of borrowers before BIFRI Actions under SARFAESI Act, compromise settlement / OTS, Adjustment of sale proceeds of prime & collateral securities.

A few advantages of using FinLEGAL:

  • FinLEGALRECOVERY restricts slippage of Standard Accounts to NPA Accounts by effective post disbursement follow up and monitoring of Advances by persuasive method, maintaining the quality of loan assets so as to ensure that maximum Loans outstanding at any given time.
  • FinLEGALRECOVERY helps take prompt and effective steps for up-gradation of identifying degraded NPA Accounts by providing all tools for persuasive, quasi-legal & legal measures in the form of recovery.
  • This software would let the user-department record at regular interval details of action taken by the branch in respect of NPA accounts individually. Also,sit would be possible for the user-department to record its observations/reactions vis-a-vis the branch action.

Since robbers, thieves or con artists are getting smarter with every passing day, we need to use a smart tool too so as to protect the banks.


Well, everyone reading this can relate themselves to this post….. since we all have been through the phase: “bhai 50 rs de naa, i’ll pay you tomorrow” and most of the people in today’s time require loans from banks. So what is the difference between both the situations. Well, banks used to have a very good reputation of letting people down while a friend would always help you out.

Ever wondered why loan processes in banks used to be so laborious? So let’s see how does the bank function- The entire process of identifying a borrower and creating appropriate documents leading to disbursement, servicing and finally recovery of the loan in a cycle is Asset Management. The risk in this transaction is that this loan could turn out to be a bad loan at any point of time. Monitoring the loan is an essential part of Asset Management. The challenge for Banks and other asset management companies is to find a robust, scalable, comprehensive product which results in increased operational efficiency and strong loan management processes……

FINLUNA comes to rescue. FinLUNA helps the Bank in providing Loan originating system with excellent support in creation of flawless documentation and to deliver prompt and effective service to its customers. It caters to both retail and commercial lending scenario and automates all stages of loan origination, management, and repayment tracking. Here are a few features of FinLUNA:
1)FinLUNA facilitates integration with Core banking systems, Core Accounting System, Various documentation processes, Credit & risk analysis and MIS systems.
2)Automatic message creation, transmission of letters, e-mails and SMS’s to borrowers.
3)User friendly system helps reduce manpower and training costs
4)FinLUNA is fully compatible with Microsoft SQL Server 2012.

These are the following perks of FinLUNA:
1)Different workflow parameters can be set for different lending products.
2)Workflow logic translates business requirements into enforceable processes.
3)Manages the different stages of work-flow independently for every application.
4)Robust controls ensure transaction and data integrity, operational efficiency, risk management and compliance.
5)It has a ready solution for post-disbursal requests of customers, like prepayment, deferral, early termination, and simple queries, It carries features for rescheduling, foreclosures, termination, and closure of loans.
6)As a result of the ease of work flow in banks, the common man gets to enjoy simple processes to seek loans along with regular updates, less time required to pass the loans, and the confidence that their loan will not bounce back due to faulty paper work.

So this was FinLUNA for you guys, a tool which strives to convert the banks into your friendly neighborhood lenders by making loan processes easier and convenient.