New Delhi: India has the most evolved digital payments system among 25 countries including the UK, China and Japan, which were surveyed on parameters such as round-the-clock availability, adoption, and immediacy of payments, said a report released on Thursday by FIS, a US-based banking technology-provider.
The report titled Flavors of Fast used the Faster Payments Innovation Index (FPII) created in 2014 and aimed at evolving a comparative rating system where diverse payments systems across the globe could be compared and contrasted.
According to FIS, the FPII ranks different payments systems on a scale of 1-5, where level 1 reflects fast payments, level 3 reflects highly desirable features enhancing customer value such as universal access and 24x7 availability while level 5 payments systems have additional features for maximizing customer value such as remittance information, push and pull capability and aliases.
“Out of the countries assessed, Taiwan was at level 1, Mexico, Brazil, Ghana, Nigeria, Iceland, China, Korea & Sri Lanka were assessed at level 2. Level 3 was Chile, Sweden, South Africa, Bahrain, Japan, Level 4 countries were Spain, Kenya, Poland, Finland, UK, Singapore, Denmark Switzerland and Thailand. India’s IMPS was the only system across the world performing at level 5," said Ramaswamy Venkatachalam, regional managing director—India & South Asia, FIS, in an email.
The Immediate Payment Service (IMPS), launched by National Payments Corporation of India (NPCI) in November 2010, is an instant interbank electronic fund transfer service that is available through mobile phones and internet banking applications. NPCI is the umbrella organization for all retail payments in the country.
Along with IMPS, the study also revealed the popularity of Unified Payments Interface (UPI) which is a combination of real time payments with open interfaces with an intention to replace cash, point-of-sale and wallet, the report added.
UPI is a payments system launched by NPCI in August 2016 that facilitates instant fund transfers between two bank accounts on a mobile platform, without any details of the beneficiary’s bank.
Transactions across UPI touched a new peak in November. The transaction volume was 105 million, up 37% from 76.8 million in the previous month, figures released by NPCI showed.
Transactions through UPI received a major stimulus from the government after Prime Minister Narendra Modi launched the BHIM (Bharat Interface for Money) app on 30 December.
“Real-time payments are not only about speed. They’re about creating frictionless trade, and a financial world in which the entire payment process occurs easily and immediately," added Venkatachalam.
The report also highlighted that appropriate fraud prevention measures are vital for payment systems offering real-time clearing and settlement. Fraudsters are moving toward the initiation point, rather than later in the process, so a lot of activity is needed to monitor and manage at the initial authentication and origination level, it added.