Indicus Centre for Financial Inclusion


Industry Technical Workshop Series

Series First Workshop

Payment Systems: Promoting Access and Inclusion
Organized by Indicus Centre for Financial Inclusion

Time and Date: 10 am -2 pm, 26th August, 2013
Venue: The Trident, Nariman Point, Mumbai

Implementing an effective and competitive payments systems ecosystem is a critical factor to attain Financial Inclusion objectives, as the key to its success will be in the enhanced access and usage of mainstream products and services by the unbanked/ under banked population. Creating an appropriate nationwide retail payment transactions infrastructure requires interventions in regulation, operational guidelines as well as role definitions of a large spectrum of actors.

Through its policy briefs and workshops Indicus Centre for Financial Inclusion seeks to promote discussion and awareness on:

  1. Distinction and demarcating line between payments and banking
  2. Appropriate framework for Payment Systems, to address interoperability; risk mitigation and accountability protocols; and consumer welfare.

The thought leadership in this area has flown from the RBI DPSS; ‘Payment Systems in India: Vision 2012-2015’ has articulated its vision, “To proactively encourage electronic payment systems for ushering in a less-cash society in India and to ensure payment and settlement systems in the country are safe, efficient, interoperable, authorised, accessible, inclusive and compliant with international standards”. The aim is “to ensure benefits of a structured modern payment and settlement systems, including innovative products, to reach out beyond the currently served target groups thereby facilitating greater financial inclusion”. Its guiding elements are enumerated as seven As: Accessibility, Availability, Awareness, Acceptability, Affordability, Assurance and Appropriateness. The Vision 2012-2015 document identifies four major themes for intervention:

1. A more efficient and integrated payment system

  • Efficiency and effectiveness of payment systems
  • Standardisation, portability and interoperability
  • Development of infrastructure and integrated payment systems

2. Assurance through risk management and oversight

  • Risks in payment systems
  • Compliance with international standards

3. Access, availability and awareness

  • Promote access and inclusion
  • Promote system literacy and visibility

4. Move to a less-cash society

  • Innovation and new product development
  • Incentivise adoption of non-cash modes of payments

With the active participation and leadership of the RBI’s Department of Payments and Settlement Systems, Indicus Centre for Financial Inclusion wishes to stage, a series of industry technical workshops focusing on the four intervention themes, with the first workshop on August 26th 2013.

Workshop Format:

  • Closed doors, technical meetings of senior level industry actors
  • Individual views, not necessarily ascribed to organisation
  • No public or media engagement
  • Takeaway action points distribution to participants only
  • Policy briefs or articles by ICFI will draw on the workshop’s key takeaways


Keynote: RBI Department of Payments and Settlement Systems Others: DFS, UIDAI, NPCI, VISA, Master Card, Banks, Telcos, Business Correspondents

Objective: To provide access to payment services to all and promote financial inclusion.
RBI has progressively been opening up the payment systems space to non-banks, liberalising the norms for issue of prepaid payment instruments, mobile banking and facilitating domestic money transfers, and relaxing the BC norms to include for-profit entities and permitting interoperability at BCs. Penetration of payment systems is impeded by cost, geographical barriers, logistics and identification requirements, and needs to be addressed through technology, innovative payment systems and by deepening the acceptance structure, besides revisiting the current KYC norms for various payment products.

Harmonisation of norms for different categories of semi-closed payment instruments (which can be used only for purchase of goods and services), and unifying KYC requirements by linking them to an under layer identifier such as the Aadhaar, could help in lowering the costs of KYC by utilising technology and eliminating paper based processes. Also, an appropriate policy framework is necessary under which banks and non-banks could provide payment services, without intermediation of funds, only the settlement of funds continuing to remain a purely inter-bank domain.

Action areas identified by the RBI are:

  1. Identification for unbanked segments, view the documents and identification requirements for carrying out payment transactions. Encourage use of proposed e-KYC service by UIDAI.
  2. Revisit the current KYC norms for various prepaid payment products and explore the feasibility of a single, rationalised norm for semi-closed prepaid payment instruments.
  3. Devise a strategy for the creation of an acceptance eco system for electronic products in which authorised private sector entities would play a significant role.

Participants will delve into the following specific issues in this workshop:

  • Mitigating KYC risks in agent-based payment systems
  • Protecting consumer funds in agent-based payments systems
  • Mitigating AML risks in agent-based payment systems
  • Mitigating technology risks in agent-based payment systems