Wattal Committee Report

WATTAL COMMITTEE REPORT
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Mobile and web-based payment applications
The majority of developments in the areas of payments are based on mobile technology by
providing wrappers over existing payments infrastructure. Examples include Apple Pay,
Samsung Pay, and Android Pay, which sit on top of existing card payment infrastructure
enabling the user’s mobile devices to act as their credit/debit cards. There are also mobile
payments built on new payment infrastructure, for example mobile phone money services, such
as M-Pesa in Kenya and IMPS in India, which provide payment services. While such innovation
facilitates the entrance of new users to the financial system, it may also move the provision of
some payment services to non-banking companies that are not regulated as financial entities.
There are a number of web-based and mobile-based payment applications that primarily focus on
the customer experience and often aim to better integrate payment transactions within the
commerce value chain. These service providers usually do not offer banking services other than
payments, and they normally do not apply for banking licenses. The services can be offered by
the payer’s own payment service provider (PSP) or by third party services (TPS), where an
innovative service provider links payers and merchants by using the payer’s online banking
credentials but without necessarily involving the payer’s PSP in the scheme or solution or by
using the card payment infrastructure (Alipay, PayPal).
Centralized KYC:
Secure, distributed databases of client information shared between institutions helps reduce
duplicative efforts in customer onboarding. Secure codification of account details could enable
greater transparency, efficiency in transaction surveillance and simplify audit procedures.
Syndication of loans:
Underwriting activities can be automated, leveraging financial details stored on the distributed
ledger. KYC requirements can also be automatically enforced in real-time. BCT can provide a
global cost reduction opportunity within the process execution and settlement sub-processes of
syndicated loans.
Fast Payments
Leveraging on the high mobile density in India, with a population of more than one billion, many
PSPs utilize mobile payment apps to link underlying payment instruments with mobile phone
numbers for fast payments via the Immediate Payment Service (IMPS) or for issuance of m-
wallets. The Unified Payment Interface (UPI) developed by NPCI provides complete
interoperability for merchant payments as well as P2P payments. The UPI enables users to link
their bank accounts with their mobile phone numbers through an application provided by the
payment service providers (PSPs) and obtain a virtual address which can be used for making and
receiving payments. Introduction of UPI has the potential to revolutionize digital payments and
take India closer towards being a “Less Cash” society.
Process Innovation
With the nation-wide implementation of Aadhaar, providing a unique identification number to all
residents of India, NPCI has launched an Aadhar Enabled Payment System (AEPS) that is a safe
and convenient channel enabling micropayments with every transaction validated by biometric
authentication. In a further impetus to digital innovations, Unique Identification Authority of
India (UIDAI) in collaboration with TCS plans to roll out an Android-based Aadhaar-Enabled
Payment System (AEPS). The application can be downloaded by merchants on a smartphone and
would require a fingerprint scanner to use it. The application is intended to facilitate undertaking
transactions without any Card or PIN.
BHIM (Bharat Interface for Money)
BHIM is a mobile app developed by NPCI, based on the Unified Payment Interface (UPI) and
was launched on 30 December 2016. It is intended to facilitate e-payments directly through
banks and as part of the drive towards cashless transactions. BHIM allow users to send or receive
money to other UPI payment addresses or scanning QR code or account number with IFSC code
or MMID (Mobile Money Identifier) Code to users who do not have a UPI-based bank account.
BHIM allows users to check current balance in their bank accounts and to choose which bank
account to use for conducting transactions, although only one can be active at any time. Users
can create their own QR code for a fixed amount of money, which is helpful in merchant
transactions.
Innovations in Investment Services
Further, Mutual Fund Distributors (MFDs) have also adopted technology in distribution of
mutual funds. There are distributors such as Scripbox, FundsIndia, MyUniverse, ArthaYantra,
etc, who operate only in the online space and cater to the tech savvy investors. The processes like
onboarding of investors, risk profiling, analysis of their portfolio, recommendation of schemes,
asset allocation, rebalancing of portfolio etc. are online and driven by technology. With an
objective to use technology in an innovative manner so that an investor can transact seamlessly
in a presence-less and paperless manner, SEBI has engaged with various stakeholders of industry
to leverage the advancement in technology and digitalize the whole process of investment in
securities market. After involving UIDAI and all stakeholders, SEBI has issued instructions on
Aadhaar based e-KYC, which has made onboarding of a new investor in securities market
(especially in mutual funds) totally paperless and presence-less.

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WATTAL COMMITTEE REPORT

Mobile and web-based payment applications

BHIM (Bharat Interface for Money)

Innovations in Investment Services

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