<img src="https://m2p-website-file.s3.ap-south-1.amazonaws.com/m2p-website-file/marketing-cms/m2p-blog/2022/07/MicrosoftTeams-image-3.webp" alt="M2P Fintech" title="" width="100%" height="447"><a class="link" href="https://m2pfintech.com/blog/neo-banking-101-all-you-need-to-know/">Neobanks</a> have led to tectonic shifts in every corner of the financial services market. The market embraces a new player almost every day with a prime intention to simplify financial services to meet the ever-evolving expectations of the digital-age customers.According to recent reports, some of the most prominent players in the market see over 140% year-on-year growth in their customer base. However, growth does not necessarily translate into profits. Even after more than five years in business, a large number of neobanks are operating at a loss.Globally, the neobank market continues to grow swiftly. But the real question is, how many of these banks will succeed and be sustainable?We have our very own Devang Mehta, Vice President of Business Development spill the beans on what makes a neobank successful. Devang delves into the pros and cons of the current business model and offers insightful strategies on how to refine vision and value propositions that will help build a neobank that is both profitable and sustainable.Being an avid neobanker and fintech enthusiast himself, he is certain that neobanks are here to stay and have a long way to go. He also shares his vision of a neobank that works like your relationship manager on the phone.Here are key nuggets from Devang’s wisdom.<h2 class="heading-node" id="852f" style="text-align: justify">What are the wins?</h2>First off, neobanks enable online transactions round-the-clock, 365-days. They offer easy, convenient, and on-the-go services. Users can transfer funds instantly at any time, from anywhere, without worrying about bank working hours/days. The business model is usually transparent and delivers real-time notifications detailing the reasons for the charges and penalties incurred by the customer.They have low operational costs due to the absence of physical branches, minimal credit risks, and fewer regulations. Thereby, customers benefit from lower prices and higher interest rates. With its lean business models and superior technologies, neobanks greatly emphasize customer orientation by offering personalized services and products.<h2 class="heading-node" id="eae8" style="text-align: justify">Where do neobanks fall short?</h2>Generally, neobanks operate on an exceptionally low margin as they tend to offer competitive low-cost pricing, higher deposit rates, and incentives to increase their customer base. With no revenue-generating products such as credit cards and loans, neobanks fail to make a profitable and sustainable enterprise. Having no solid revenue model is one of the biggest downsides of a neobank business.Building trust with the customers of the legacy bank is another key challenge for neobanks. The customers feel traditional banks are safe and reliable compared to the new-age banking technology. Although neobanks put forth quick, accessible, and round-the-clock services, a significant share of customers uses neobanks as their secondary account.Aside from the above, lack of standard regulatory framework, superlative customer expectations, and cost involved in the technology and development are some of the challenges that neobanks face.<h2 class="heading-node" id="2ba2" style="text-align: justify">Quest for profitable and sustainable neobanking - The “why” and “what”</h2>Devang believes the quest for a profitable and sustainable neobank starts with two questions:<ol class="list-node" id="gbcty8qf5"><li>Why do you want to create a neobank?</li><li>What do you want the neobank to be known for?</li></ol>Today’s consumers are presented with a gamut of financial services to choose from. Potential customers are keen to know what problems you are solving for them. A compelling vision for your neobank will make the right customers see how your “why” aligns with their pain points, goals, and objectives. “What” your neobank is will help you tap into the right customer segment to fulfill your purpose.For example, assume you are packing your bags and moving to another continent for a successful educational or career experience. It is one thing to assimilate the new environment but being tugged into a totally unfamiliar ecosystem for essential services and financial assistance like banking or debit card usage can knock you sideways.Imagine, you receive a sim card, a bank account, a checkbook, a debit card, and perhaps even insurance as your onboarding kit. Wouldn’t that be the ultimate welcome kit?That’s exactly how Devang envisages a neobank that caters to students, blue-collar job holders, and working professionals. Drawn from his experience as an expatriate, he aspires to build a neobank that offers quick and seamless financial services to immigrants arriving in a new country.Understanding your “why” and “what” will form the fundamental principle of your neobank’s vision. Once you have a clear conception of your vision, you must support it with comprehensive planning based on:<ul class="list-node" id="fmgvwr81y"><li>A defined target customer segment</li><li>Regulatory compliance in the respective market</li><li>Data protection/localization</li><li>Application with customer-friendly UI/UX</li></ul>Devang highlights that beta testing is paramount and the key to boosting the performance of a neobank application. Unfortunately, most players fail to include beta testing in their development life cycle in a rush to go to the market soon.Though neobanking is the perfect example of how convenient banking can be for users, it is still in its nascent stage. Whether you are an incumbent or a new player, agility and responsiveness to market trends are critical to surviving in an increasingly crowded digital financial services ecosystem. Therefore, it’s extremely imperative to understand, analyze, and constantly refine your vision to carve out your place in the market. The key is to remember what you want to achieve and why.Check out our blog on&nbsp;<a class="link au lg" href="https://m2pfintech.com/blog/7-steps-to-start-a-neo-bank-from-scratch/" rel="noopener">how to start a neobank</a>&nbsp;for step-by-step guidance.Curious to know how you can create a powerful vision and value proposition for your neobank? Write to us at <a class="link au mv" href="mailto:business@m2pfintech.com" target="_blank" rel="noopener ugc nofollow">business@m2pfintech.com</a>.<a class="link" href="https://m2pfintech.com/newsletter/">Subscribe</a>&nbsp;to our newsletter and get the latest fintech news, views, and insights, directly to your inbox. Follow us on&nbsp;<a class="link" href="https://www.linkedin.com/company/m2pfintech/mycompany/">LinkedIn</a>&nbsp;and&nbsp;<a class="link" href="https://twitter.com/m2pfintech">Twitter</a>&nbsp;for insightful fintech tales curated for curious minds like you.

Strategy to Reorient Neobanking for Sustained Profitability

<img src="https://m2p-website-file.s3.ap-south-1.amazonaws.com/m2p-website-file/marketing-cms/m2p-blog/2022/07/6-Reasons-Cards-Issuers-Need-Modern-API-based-Issuance_Word-press.webp" alt="M2P Fintech" title="" id="rccc3brjk" width="100%" height="356">Payment cards are a necessity today. The benefits they deliver are immense not just to consumers. But also to issuers such as banks, NBFCs, and businesses.To businesses and financial institutions, cards are deal-breakers. Accessible in physical and virtual form factors, they hold the power to drive customer loyalty, enhance experiences, control business spending, and generate revenue. That’s why despite competition from other digital payment modes, card transactions are projected to grow at 12.9% reaching $39.7 trillion by 2025.<h2 class="heading-node" id="69f0">Shortcomings of Legacy Card Issuance Platforms</h2>Conventionally cards were designed and issued using legacy platforms. Though it simplified card issuance to a certain extent, the rigid&nbsp;<a class="link au lo" href="https://m2pfintech.com/blog/the-world-of-apis-how-they-power-fintech/" rel="noopener">APIs&nbsp;</a>had limited scope for innovation, speed, and multiple use-case support. Configuration flexibility, customizations, and security compliance also took a hit. This resulted in slow go-to-market speed, complex configurations, compliance,&nbsp;<a class="link au lo" href="https://m2pfintech.com/blog/how-does-payment-tokenization-work/" rel="noopener">tokenization&nbsp;</a>issues, and fragmented reporting. In short, legacy infrastructure left no potential to cater to modern customers with evolving needs and priorities.<h2 class="heading-node" id="4109">Why API-based Card Issuance is the Way to Go</h2>In an era where speed of card issuance, ease of onboarding, personalization, security, and tangible reward redemption are key differentiators, modern card issuance is the need of the hour. Right from launching a card program, to managing the program lifecycle, meeting regulatory compliance, to scaling the card program, modern&nbsp;<a class="link au lo" href="https://m2pfintech.com/blog/why-should-apis-be-your-holy-grail-for-prepaid-card-issuance/" rel="noopener">API-based card issuance</a>&nbsp;is the way to go.Card issuers worldwide are choosing modern card issuance over legacy for the following reasons.<h2 class="heading-node" id="l929s1bfo">1. Versatile Personalization</h2>A recent McKinsey report suggests that businesses can achieve a 15% revenue growth through personalization. Modern card platforms have flexible APIs that are amenable to innovation and customization, making them best suited to cater to modern consumer needs. The card can be customized for integration into a digital wallet for payments across in-store and online POS, and ATMs with varied limit management options for cardholders.The versatility of modern cards is so enormous that they can support multiple use cases on the go. They can double as general-purpose prepaid cards, single-use, and multi-purpose travel cards, gift cards, subscription cards, loyalty cards, and transit cards, among many others.<h2 class="heading-node" id="a0c8">2. Agile Wallet Integrations and Tokenization</h2>Cards can offer the advantage of physical as well as virtual form factors to issuers and customers. Though physical cards may take time to be shipped, virtual cards can be activated and used instantly, thus establishing consumer engagement right from day one.Modern card issuance platforms enable you to scale up and integrate virtual cards and physical cards into digital wallets. They lower development efforts by replacing numeric codes with natural language labels and creating actionable data. They also facilitate encrypted and tokenized virtual card data that can ease the integration of cards.<h2 class="heading-node" id="eebd">3. Access to PCI Widgets</h2>The PCI Security Standards Council provides a Payment Card Industry Data Security Standard (<a class="link au lo" href="https://m2pfintech.com/blog/pci-dss-the-payments-armour/" rel="noopener">PCI DSS</a>) framework to protect card transactions and card holders’ data from breaches. PCI DSS certification is mandatory for fintechs or any company accepting card payments, storing, and displaying consumer card data on their website &amp; apps. The compliance process is cumbersome and time-consuming for issuers and merchants who want to manage card payments.Modern card issuance platforms provide access to PCI widgets that enable instant PIN activation and access to mobile apps without the hassle of going through a lengthy compliance process. This enables issuers to focus on their core business and customer experiences while leaving issuance, compliance, data security, privacy, and program management to certified modern issuance platforms.<h2 class="heading-node" id="a2f0">4. Dynamic Authorization</h2>In legacy infrastructure, spend controls are mostly preset and are not dynamically validated against live data and changing business rules. But modern card issuance opens up the payment flow and authorizes card transactions against live criteria such as card-present and Card Not Present (CNP) scenarios, spend amount, time, date, and frequency of transactions. It also customizes card spending authorization based on customer risk profile, merchant listing, currencies, and geolocation.<h2 class="heading-node" id="1c5d">5. Profitability</h2>Building a card program from scratch requires resources in terms of capital and time. Even though card issuers identify a problem they wish to address, the time and cost required to test the hypothesis are not feasible or profitable.Modern card issuance enables issuers to run and manage card programs while reducing cost of ownership and accelerating profitability through increased customer acquisition, retention, and satisfaction. The card program managers do not have to do the heavy lifting in obtaining the regulatory and compliance standards. With the help of modern card issuance, they can earn revenue through interchange charges and Merchant Discount Rate (MDR) by addressing the identified segment from the start. The margins can be shared between card issuers, card program managers, card networks, and processors.<h2 class="heading-node" id="c606">6. Global Scale-ups</h2>Modern card infrastructure can help scale up businesses for global payments and expansion. Leveraging their region-agnostic cloud infrastructure and scalable resources, issuers can automatically scale as and when traffic and transaction volume grows, without any manual intervention.Card issuers get the option to expand and test new business models and card use cases while launching card programs with the help of API-based card issuance stacks. This saves time spent on launching a new program by integrating with existing infrastructure and databases seamlessly. Equipped with backups and disaster recovery, these systems can be compatible with multi-currency payments, thus making them an ideal choice for expense management and travel payments management.Now remember, the six reasons delved upon above are just the beginning.Want to know more about how modern card issuance can benefit your business?Write to us at&nbsp;<a class="link au lo" href="mailto:business@m2pfintech.com" target="_blank" rel="noopener ugc nofollow">business@m2pfintech.com</a><a class="link" href="https://m2pfintech.com/newsletter/">Subscribe</a>&nbsp;to our newsletter and get the latest fintech news, views, and insights, directly to your inbox. Follow us on&nbsp;<a class="link" href="https://www.linkedin.com/company/m2pfintech/mycompany/">LinkedIn</a>&nbsp;and&nbsp;<a class="link" href="https://twitter.com/m2pfintech">Twitter</a> for insightful fintech bytes curated for curious minds like you.

6 Reasons Cards Issuers Need Modern API-based Platform

<img src="https://m2p-website-file.s3.ap-south-1.amazonaws.com/m2p-website-file/marketing-cms/m2p-blog/2022/06/MicrosoftTeams-image-109.webp" alt="M2P Fintech" title="" width="100%" height="317">Wallet limit breaches and data duplications are crucial problems for <a class="link" href="https://m2pfintech.com/blog/prepaid-cards-101-a-definitive-guide-for-growth-and-profitability/">prepaid card</a> issuers. They hold the risk of consumers overriding the loading and spending limit.That’s why <a class="link" href="https://m2pfintech.com/blog/rbis-new-guidelines-for-ppis-how-will-it-impact-the-fintech-industry/">RBI</a> mandated that all prepaid programs deploy a centralized System of Records (SOR) in&nbsp;October’17. All prepaid program partners must mandatorily connect to the issuer’s SOR system.<h2 class="heading-node" id="7x11l5ome" style="text-align: justify">What is a System of Record?</h2>A System Of Record (SOR) or Source System of Record (SSoR) is a single source of truth or data source that stores important information about a system or process within the organization. It serves as a shared reference point that protects prepaid card issuers against data repetitions that arise when individual data is created, handled, and processed by multiple individuals or business units. As a result, SOR provides a single source of truth for operations.The System of Records monitors the consolidated prepaid balance of all wallets issued to the end customer by the same issuer, independent of the prepaid program partner. It is a central ledger that tracks every registered customer’s overall balance in real-time based on their <a class="link" href="https://m2pfintech.com/blog/know-your-customer-kyc-the-need-for-authentication/">KYC</a> status. In addition to holding centralized data on the consolidated balance of a customer’s prepaid wallet, it also carries issuer-specific information. This is in cases where the balance of multiple partner wallets is integrated under a single <a class="link" href="https://m2pfintech.com/blog/how-to-implement-the-best-prepaid-payment-instrument-ppi-for-your-business/">PPI</a> issuer.<h2 class="heading-node" id="20csbnfpl" style="text-align: justify">How SOR works for prepaid cards?</h2>Say an individual holds two prepaid wallets with the same issuer. His personal information is captured in the issuer database for profile creation and <a class="link" href="https://m2pfintech.com/blog/crack-the-kyc-jigsaw-ease-onboarding-compliance/">KYC verification</a>. &nbsp;Issuers who partner with Token Service Providers for SOR will have all data automatically transferred to a centralized database. &nbsp;Then KYC-based wallet limit, dedupe check, and customer profile creation will need to be managed.<h2 class="heading-node" id="7g22xdrk5" style="text-align: justify">Why SOR is critical?</h2>SOR is critical for prepaid issuers who deal with huge volumes of data from multiple source systems. This system of truth helps secure the integrity and validity of any data set as it remains the only source of truth. If there is any other agreed system of record, the data element must be either linked to or extracted from it. In other situations, the provenance and estimated data quality should be documented.&nbsp;Here are some key benefits SOR offers to users.<ul class="list-node" id="niw8n6t1l"><li>Provides the most complete, accurate, and timely data</li><li>Best structural conformance to the data model</li><li>Nearest to the point of operational entry</li><li>Can be used to feed other systems</li></ul><h2 class="heading-node" id="vwxcavknq" style="text-align: justify">How can M2P facilitate SOR implementation?</h2>We help banks and prepaid card issuers build a SOR, which will serve as a final source of truth for all customer data. Our robust <a class="link" href="https://m2pfintech.com/blog/api-the-power-that-drives-new-age-banking-ecosystems/">API</a>-led infrastructure offers a centralized database to track and monitor the data in real-time.&nbsp; The built-in checks and balances comprise AML, negative listing, and real-time watch listing capabilities to ensure compliance and zero limit breaches across programs.Looking to implement SOR for prepaid cards?We would like to help. Write to us at business@m2pfintech.com.&nbsp;&nbsp;<a class="link" href="https://m2pfintech.com/newsletter/">Subscribe</a>&nbsp;to our newsletter and get the latest fintech news, views, and insights, directly to your inbox.Follow us on&nbsp;<a class="link" href="https://www.linkedin.com/company/m2pfintech/mycompany/">LinkedIn</a>&nbsp;and&nbsp;<a class="link" href="https://twitter.com/m2pfintech">Twitter</a>&nbsp;for insightful fintech tales curated for curious minds like you.

Why System Of Records (SOR) is Critical for Prepaid Card Issuers?

<img src="https://m2p-website-file.s3.ap-south-1.amazonaws.com/m2p-website-file/marketing-cms/m2p-blog/2022/06/Blog-Banner_Wearable-in-Banking-payment.webp" alt="M2P Fintech" title="" width="100%" height="383">The global wearable market size is projected to reach USD 931.31 Billion by the end of 2030, and wearables are here to stay.Not just in healthcare, retail, and telecom, but also in banking and payments. Changing customer priorities and fintech advancements accelerated the market for wearables in the pandemic era. With millennials, gen X, and gen Z consumers wanting secure, convenient, instantaneous transactions, contactless wearables are the way to go.Projected to grow at a CAGR of 11.5%, the future of wearables is likely to evolve further as consumers and financial institutions transition into the cashless, digital universe. Some wearable payment devices have the potential to become a “one-stop-shop” for several services.Disney’s Magic Band for instance is a wearable that Disney Land provides its visitors. Designed in the form of a funky wristband, the magic band functions as an access key, a payment device, and a personalized tracker. And it is also compatible with diverse smartphones and technologies.<h2 class="heading-node" id="7ff3" style="text-align: justify">What are wearable payment devices?</h2>Wearable payment devices are apparel, gadgets, and accessories we use to make contactless payments. The most common types are smartwatches, belts, jackets, fitness trackers, and even rings. They use services like Apple Pay, Samsung Pay, and Google Pay to connect the device with the consumer’s bank account.<h2 class="heading-node" id="0774" style="text-align: justify">Top wearable payment devices in the market</h2><h4 class="heading-node" id="peflro9so" style="text-align: justify">Apple Watch</h4>The Apple Watch is one of the most popular smartwatches on the market, and it features NFC (Near Field Communication) technology. This technology allows the watch to communicate with other NFC-enabled devices, such as smartphones, to exchange data, make mobile payments, and do other contactless transactions.<h4 class="heading-node" id="zefu7xngv" style="text-align: justify">Samsung Galaxy Watch 6 Classic</h4>Samsung Galaxy Watch 6 Classic offers contactless payment services through Samsung Wallet. This smartwatch enables users to make contactless payments at stores that accept NFC-enabled transactions.<h4 class="heading-node" id="7zin33oqj" style="text-align: justify">7 Ring</h4><a class="link" href="https://seven.ooo/">7 Ring</a> is India's most advanced form of making contactless payments, utilizing Near-Field Communication (NFC) technology. Co-certified by EMV, 7 Ring has the same security standards as the payment instruments used worldwide by leading banking networks.7 Ring uses <a class="link" href="https://www.livquik.com/">LivQuik</a>&nbsp;(powered by M2P)&nbsp;as their wallet provider, which works seamlessly with a tap at the PoS terminal, enabling convenient payments without the need for a phone or Bluetooth connection.<h4 class="heading-node" id="vknjub99i" style="text-align: justify">Ringly</h4>Ringly offers rings and bracelets that connects to your phone via Bluetooth. Partnering with MasterCard, they allow you to make contactless payments apart from tracking your activities. They allow you to make contactless payments with just a wave of your hand.Now we’ve seen only a sample of wearable devices. Belts, jackets, and even shoes are used as wearable payment devices today.<h2 class="heading-node" id="f558" style="text-align: justify">How do wearable payment devices work?</h2>To use a wearable payment device, say a smartwatch, the user needs to link the device to a credit card or bank account. Once the device is linked, the user can make payments by simply tapping the device against a payment terminal. The payment is then processed through the credit card or bank account that is linked to the device.<h2 class="heading-node" id="cb0d" style="text-align: justify">Wearable payment technologies</h2>Wearable payment systems are quite commonly used in e-banking and payment platforms. They operate on technologies such as HCE, Barcode, Contactless Point of Sale, Radio Frequency Identification (RFID), and Near-field Communication (NFC) to enable payments and cash transfers.<h4 class="heading-node" id="8264" style="text-align: justify">Host Card Emulation (HCE)</h4>Host Card Emulation (HCE) enables payments that are activated by NFC technology. ​​It allows a device to emulate the functionality of a smart card to provide contactless payment capabilities using the ISO/IEC 7816–4 APDU command set. It communicates with a reader and stores data in the same way that a smart card would. A key benefit of using HCE is that it does not require a physical smart card or a built-in NFC reader. And it can be used for loyalty programs and access control too.<h4 class="heading-node" id="387a" style="text-align: justify">Barcodes</h4>Some wearables are encoded with scan-and-go application barcode scanners for payments. It allows the customer to check out quickly without conventional processes. Barcode technology offers several advantages in wearable devices. They are secure, can be read quickly and easily, and can store a large amount of data. Newer barcode standards, such as QR codes can be deeply encrypted to prevent unauthorized access.<h4 class="heading-node" id="aae0" style="text-align: justify">Contactless Point of Sale (CPOS)</h4>The contactless point of sale (CPOS) is a new technology that uses Radio Frequency Identification (RFID) technology to communicate with the POS terminal and make payments. The CPOS system is fast, convenient, and secure. You just hold your card near the POS terminal, and the payment will be processed automatically. It uses the latest encryption technology to protect personal information.<h4 class="heading-node" id="e897" style="text-align: justify">Radio Frequency Identification (RFID)</h4>RFID wearables such as rings, wristbands, and dongles comprise an embedded chip with an RFID tag. The tag is a unique identifier that an RFID reader can read. The reader can track the tag’s location or access wearer information. RFID-enabled wearables offer many advantages over traditional ID payment devices. They are more difficult to lose or misplace and can be read from a distance, making them ideal for tracking assets or people.<h4 class="heading-node" id="4a4c" style="text-align: justify">Near-field Communication (NFC)</h4>NFC ​​ is a short-range wireless technology that enables two devices to communicate when they are near each other, typically no more than a few centimeters. It is a convenient way to share small amounts of data between devices and works great in wearable payment devices, such as smartwatches, fitness trackers, and clothing.<h2 class="heading-node" id="4re67ozcs" style="text-align: justify">Wearables, IoT, and Fintech</h2>As with many things to do with digital transformation, the pandemic pushed businesses to explore and invest in Point-of-Sale (POS) technology, making wearables more than just useful tools. Readily available and user-friendly in usage and navigation, payment apps such as Google Pay and Apple Wallets, have made it easy for all demographics to transition smoothly into wearable technology.In the current mobile climate, using the Internet of Things (IoT) in banking is the way to attract new customers and retain existing ones. Wearable payment devices and IoT helps the financial sector to gain deep customer insight and improve user experience. Banks implementing IoT have seen benefits in cost savings, higher efficiency in business processes, and better customer experience. They have also been able to build new revenue models.There is no doubt that fintech needs wearables, as it opens up new opportunities to transform their businesses and remain strong contenders in the market. We see the increasing use of wearables and in a way, they may even replace mobile phones in the future.<h2 class="heading-node" id="51ef" style="text-align: justify">How wearables benefit banks and fintechs</h2><h4 class="heading-node" id="2062" style="text-align: justify">Access to data</h4>Wearables provide banks access to voluminous data as they are worn by customers most of the time. Customer intelligence gained can be used to enhance experiences and personalize products and services. Wearables are critical to data extraction and analytics.<h4 class="heading-node" id="f3b5" style="text-align: justify">Personalization of customer service</h4>Financial institutions and fintechs today recognize the need to be customer centric. And data extracted from wearables have proven to personalize and optimize customer interactions. Wearables can help predict customer behavior through real-time data and target them with recommendations and personalized offers.<h4 class="heading-node" id="135f" style="text-align: justify">Omnichannel user experience</h4>A combination of IoT and wearables can make all the difference in omnichannel customer experience. Fintech and banks can gain a competitive edge with wearables, for example, using smartwatches to make ATM withdrawals and biometric-enabled transactions.<h4 class="heading-node" id="072a" style="text-align: justify">Risk assessment</h4>Banks and fintechs need to mitigate risk by assessing potential factors. Analyzing customer data extracted from wearables can help enhance risk management decisions on lending, or insurance, among many others.<h2 class="heading-node" id="661d" style="text-align: justify">Banking Wearables in India</h2>India is fast catching up in the wearables market, especially after RBI increased the limit for contactless transactions to Rs. 5000. Both SBI and Axis Bank have launched their wearables Titan Pay and Wear n’ Pay, respectively.<h4 class="heading-node" id="92aa" style="text-align: justify">Titan Pay</h4>Titan Pay is a wearable collaboration between Titan and SBI that offers watches to enable contactless payments. It comprises a mobile app that allows users to send and receive money instantly. Using the watch and the app, users can transact in multiple currencies, track spending, and even set up a budget.<h4 class="heading-node" id="8fae" style="text-align: justify">Wear n’ Pay</h4>Wear n’ Pay devices include accessories like key chains and watch loops from AXIS Bank. It allows you to pay for purchases by just swiping your wrist. The system uses a special wristband that you can wear while you shop. You simply swipe your wristband across the payment terminal to pay for your purchase.<h4 class="heading-node" id="94vghp82w" style="text-align: justify">Indus PayWear</h4>By enabling consumers to easily tokenize their IndusInd Bank credit or debit card onto a chip-enabled wearable device, Indus PayWear is poised to completely change the payment experience. This will do away with the requirement for a physical card or even a payment app for purchases and enable quick and safe tap-and-pay transactions at any contactless Point-of-Sale (PoS) terminal worldwide.<h2 class="heading-node" id="9h5ne3vh6" style="text-align: justify">Real-time adoption of Wearables</h2>During the 2024 IPL, the <a class="link" href="https://www.npci.org.in/PDF/npci/press-releases/2024/NPCI-Press-Release-RuPay-Launches-Exclusive-On-The-Go-Contactless-Payment-Collectible-for-2024-TATA-IPL-Playoffs-and-Final.pdf">NPCI launched an NFC-enabled wristband</a> for payments and access to the playoffs and finals. As a part of the “RuPay On-the-Go” series, the wristband provides seamless access management during events and functions as a versatile contactless payment device post-event.This first-of-its-kind initiative links access management for live events and payments into one exclusive collectible for select attendees of the playoffs and finals.<h2 class="heading-node" id="6f11" style="text-align: justify">Conclusion</h2>The integration of wearable &amp; contactless payments is an emerging trend in the modern payment system. While <a class="link" href="https://m2pfintech.com/blog/the-rise-of-digital-payments/" target="">digital payment</a> trends keep on changing, the need to provide the best consumer experience across the platform is always constant for Financial Institutions and Payment Service providers.At M2P, we provide the best customizable payment experiences for businesses. Using our end-to-end API stack, we ensure that modern innovations and technology are seamlessly integrated into your ecosystem. Our APIs enable channel management and limit management across PoS, contactless payments, ecommerce, and withdrawals on your payments platform.Want to know more about integrating contactless payments and other customizable features on your payments platform?Write to us at&nbsp;<a class="link au lo" href="mailto:business@m2pfintech.com" target="_blank" rel="noopener ugc nofollow">business@m2pfintech.com</a>.<a class="link" href="https://m2pfintech.com/newsletter/">Subscribe</a>&nbsp;to our newsletter and get the latest fintech news, views, and insights, directly to your inbox.Follow us on&nbsp;<a class="link" href="https://www.linkedin.com/company/m2pfintech/mycompany/">LinkedIn</a>&nbsp;and&nbsp;<a class="link" href="https://twitter.com/m2pfintech">Twitter</a>&nbsp;for insightful fintech tales curated for curious minds like you.

Rise of Wearables in Payments and Banking

<img src="https://m2p-website-file.s3.ap-south-1.amazonaws.com/m2p-website-file/marketing-cms/m2p-blog/2022/06/wordpress-1.webp" alt="M2P Fintech" title="" id="5hz84v7cu" width="100%" height="317">Friday vibes just grew stronger post lunchtime. M2Peers geared up for their exciting weekend escapades.And Devang, our fintech fanatic too had 'exciting' plans. He was waiting impatiently to spend his weekend on all things fintech, while sipping his fresh glass of juice.&nbsp;That's Devang Mehta, our Vice President of Business Development in a nutshell.&nbsp;&nbsp;Devang is popular among M2Peers and industry peers for his fintech-fused mind. He is the go-to person for anything related to fintech and beyond.We feature this whiz kid and ex-banker as our Star of the Month this June.&nbsp;Curious to know what inspires Devang and keeps his going?Keep scrolling.<h2 class="heading-node" id="pwnuthg73">How do you usually start your workday? &nbsp;</h2>I ensure my mornings have a positive start to set my day right. My mornings are filled with prayers and news reading rituals.&nbsp;LinkedIn is my favourite spot to get the hot and happening news around the globe.&nbsp;When we are fast asleep, other countries are up, so there is a lot to catch up on when we wake up. This is my routine before I go to bed as well. &nbsp;The to-do list is my saviour for the day. I list all my tasks and ensure those are checked on the same day. Time is limited for all, so I put everything I want to do on my calendar.&nbsp;Recently, I have added yoga, workouts and swimming to the morning activities for about 30 minutes daily, which helps me a lot with energy and stamina throughout the day.&nbsp;<h2 class="heading-node" id="y351ehfie">What are your main responsibilities as VP of Business Development? &nbsp;</h2>The list below pretty much sums up my typical workday.&nbsp;<ul class="list-node" id="ojq9ghvpf"><li>Client meetings&nbsp;</li><li>Understanding client requirements and offering solutions&nbsp;</li><li>Brainstorming innovative business ideas, tricks and strategy &nbsp;</li><li>Competitor analysis&nbsp;</li><li>Communication of new product developments to potential clients&nbsp;</li><li>Providing management with feedback&nbsp;</li><li>Developing entry-level salesforce&nbsp;</li><li>Collaborating with other companies (M&amp;A)&nbsp;</li></ul><h2 class="heading-node" id="mu95ncss7">How have you grown through the years as an M2Peer?   &nbsp;</h2>Before I started my innings with M2P, I was a banker. I worked with banks like Citi Bank, DCB Bank and RBL Bank, where my core responsibility was managing customers and growing inorganically. In the banking sector, the groundwork was established and all set.But when I moved to M2P, the environment was completely different.&nbsp;I was one of the few early joiners in the M2P family.&nbsp;I got a lot of exposure to managing difficult clients and ensuring that the business relationship was built firmly. One of my best learnings after stepping into the fintech ecosystem is knowing how to build and manage relationships.&nbsp;This helped me to become a "Rainmaker", i.e., someone who is not just being transactional but following a "Cockroach Startup Approach" (to keep moving and thriving despite changing market conditions, environments, or investment scenarios).&nbsp;<h2 class="heading-node" id="ayfoc0qlr">Is there a quote/saying that motivates you?   &nbsp;</h2>I follow two sayings:&nbsp;"Dear self, never try to defeat people; just try to win them."&nbsp; &nbsp;Another one that motivates me greatly in my career is "Sales Department isn't the whole company, but the whole company better be the sales department."&nbsp;<h2 class="heading-node" id="hhktcakit">What's that one thing your colleagues don't know about you? &nbsp;</h2>My friends almost know everything about me, but they were surprised to see my dance video. Most of them don't know that I&nbsp; hold a Brown Belt in Karate.&nbsp;<h2 class="heading-node" id="tvlajp4x3">What inspires you the most about M2P? &nbsp;</h2>My daily dose of inspiration comes from our very own founders. They taught me three important things.<ul class="list-node" id="gk35j502m"><li>Thinking and driving the business forward</li><li>Setting the business expectations right</li><li>Staying grounded in difficult situations</li></ul>I always think of our founders as the sun, that radiates incredible energy. It's all about how people absorb this energy. When taken positively- people can feel a spark (motivation to grow) and receive vitamin D. If taken negatively, people would feel burned out. &nbsp;<h2 class="heading-node" id="6i27u2ty2">What's your idea of a perfect day?   &nbsp;</h2>Perfect day? I would rather say the perfect start for the day is to wake up without an alarm.&nbsp;&nbsp;Recently one piece of advice helped me a lot. And I would like to share it with you too.Find a peaceful place in your house and sit there for 10-15 mins every day to meditate. This has brought good results, and I'm sure you will realize it too.  &nbsp;<h2 class="heading-node" id="akmnja20o">What was your career path before joining M2P, and how has it changed? &nbsp;</h2>I was in the banking sector before starting my journey with M2P. I am proud to say that I was the best in our team but not in banking. I feel that banks will restrict you to only one ecosystem until you don't reach the management level, whereas fintech gives you a holistic view of the business.&nbsp;While in banking, I received much recognition from the senior leadership team at times like town hall meet or annual days. But vice versa happened in fintech, where you don't need an award, just learning and working towards improvement is high enough. &nbsp;Everyone in the team will recognize you due to your hard work, irrespective of your position.I go by the ideology that, 'the day the market knows your company because of you, that day will be your career-changing moment'.&nbsp;<h2 class="heading-node" id="v8llna9bv">What are your hobbies/interests? &nbsp;</h2>I love grooving and dancing whenever I feel like it. I also like to drive and explore new destinations. In addition, learning new is how I spend most of my leisure time.&nbsp;   &nbsp;<h2 class="heading-node" id="a7wa4zfx5">Anything else you want to share about M2P? &nbsp;</h2>M2P will have incredible velocity in the coming days! We are very proud of that.We are expecting to be Unicorn and Decacorn very soon. In M2P, the best part is right from founders to all our M2Peers, everyone strives to learn new every day. M2P gives you a platform to perform, but it's up to us to decide if we want to crawl, walk, or run.  So come on M2Peers, let’s have fun and grow together!<a class="link" href="https://m2pfintech.com/newsletter/">Subscribe</a>&nbsp;to our newsletter and get the latest fintech news, views, and insights, directly to your inbox.Follow us on&nbsp;<a class="link" href="https://www.linkedin.com/company/m2pfintech/mycompany/">LinkedIn</a>&nbsp;and&nbsp;<a class="link" href="https://twitter.com/m2pfintech">Twitter</a>&nbsp;for insightful fintech tales curated for curious minds like you.

A Candid Chat with M2P's Fintech Fanatic, Devang Mehta

<img src="https://m2p-website-file.s3.ap-south-1.amazonaws.com/m2p-website-file/marketing-cms/m2p-blog/2022/06/Remittance-with-UPI-_Blog-Banner-.webp" alt="M2P Fintech" title="" width="100%" height="284">India has the world’s largest diaspora. More than 30 million Indians reside outside the country. The Non-Resident Indians (NRIs) and Overseas Citizens of India (OCIs) from the US, UK, and the Middle East make India the world’s largest recipient of remittances. Despite the pandemic and its economic impact, India received $87 billion* remittance in 2021. (Source: World Bank 2021 report)The MENA region is home to a significant expatriate population. And more than half of its outbound remittances are sent to India. India-UAE is the world’s second-largest remittance corridor clocking more than $20 billion in transaction value. It makes up 33% of India’s total inward remittance volume. According to the Central Bank of the UAE’s (CBUAE) report, the outward remittances of the UAE increased by 9.2% in the third quarter of 2021. India retained its position as the top recipient by accounting for 26% of the outward remittance.<h2 class="heading-node" id="3sb73vqzx">India and the Middle&nbsp;East</h2>Now, remittances from the Middle East are not a recent phenomenon in India. They go way back to the 1900s when Indians moved to the Persian Gulf, searching for better opportunities. Since then, India’s trade relationship with the UAE and the rest of the countries in the Middle East has flourished. Today, over 7.6 million Indians live in the Middle East.During 2021–2022, India chalked up a total trade of $154 billion with countries in the Gulf Cooperation Council (GCC), accounting for 18.3% of its collective imports and exports value. The bilateral trade between India and the UAE is valued at $72.9 billion. The UAE, Saudi Arabia, and Iraq are India’s third, fourth, and fifth-biggest trading partners, and the trade sector is expected to expand over the upcoming years.The recent Comprehensive Economic Partnership Agreement (CEPA) is a significant milestone for bilateral trade relations between India and the UAE. Effective from 1 May 2022, CEPA offers an open and equitable ecosystem for businesses and accentuates new frontiers in cross-border payments and remittances.<h2 class="heading-node" id="fwofl48gd">Tale of Money Transfer to&nbsp;India</h2>In the early eighties and nineties, expats physically visited money transfer operators and agents to send money to their families back home, while businesses and Governmental agencies depended on conventional modes of <a class="link" href="https://m2pfintech.com/blog/cross-border-payments-a-swift-money-flow-across-borders/">cross-border payments</a>. However, these traditional methods were fraught with challenges such as security, time delay, high costs, and currency conversion fees.For example, Demand Draft (D/D) was one of the earliest forms of remittance. D/D is traceable at any given time and hence, was considered the safest and niftiest money transfer method. However, it was an exceptionally tedious and time-consuming process. But slowly, things changed. Remittances started to evolve, from drafts to personal cheques and wire transfers to the online and mobile transfers of today.<h2 class="heading-node" id="ko5i3w91c">Key Challenges in Remittances</h2>Differences in the time zones, currency conversion, multiple compliance checks, unforeseen delays, charges, and the uncertainty of receipt of payment were challenges that payers and payees faced in international remittance. As customer preferences and technologies evolved, cost, compliance, speed, and interoperability emerged as factors that affected convenience, security, and seamlessness.CostThe charges associated with the remittances vary across markets and services providers. Key factors include the transaction amount, transfer destination, payment channel, and exchange rates. In addition, the cost of a service provider is subject to the complexity involved in managing settlements in multiple currencies and the time and effort required to maintain compliance with the <a class="link" href="https://m2pfintech.com/blog/know-your-customer-kyc-the-need-for-authentication/">KYC</a>/AMC guidelines and partnerships. This calls for innovative technologies and digitization to minimize the cost, in turn reducing the overall transaction cost for the customers.Compliance and SpeedThe most common reasons for the delay in remittances are the fragmented remittance information coupled with the extensive checks for anti-money laundering and fraud activities. Financial institutions ought to carry out an overarching list of compliance checks to mitigate risks. A central hub to share cross-national information can aid in speeding the payment process.Interoperability<a class="link" href="https://m2pfintech.com/blog/why-payments-interoperability-is-a-must-for-todays-generation/">Interoperability</a> plays a crucial role in improving the speed and time of remittances. Cross-border payments are time-intensive — lesser the compatibility between the systems, the higher the transaction risks. A standardized global messaging format reduces the time, effort, and error that arises with the translation.<h2 class="heading-node" id="xfzjj9vvg">UPI — Resolving the Challenges in Inward Remittance</h2>The introduction of <a class="link" href="https://m2pfintech.com/blog/upi-the-driver-of-economic-growth-and-inclusion/">UPI</a> has changed the course of remittances. This ground-breaking financial innovation has the potential to help the payer and payee overcome remittance challenges and has made international transfers quick, simple, cost-efficient, and transparent. Money transfer institutions are tapping the potential of fintechs to develop a UPI-based cross-border payment ecosystem that leverages global networks to make overseas transfers more reliable and secure.As one of the largest markets for inward remittances, India is adopting UPI as a fundamental mode of remittance through its strategic collaboration with several nations. National Payments Corporation of India (NPCI) set up a payments wing (NIPL) to internationalize UPI and Rupay, and enable real-time bank account payouts.NIPL has inked agreements with several countries in the Middle East and the Asia Pacific, including United Arab Emirates, Nepal, Bhutan, Singapore, and Japan, to deploy the UPI payment rails in their jurisdictions. In the last two years, companies like LuLu Financial and Al Ansari Exchange have benefitted from real-time UPI–based remittances.<h2 class="heading-node" id="gfll6t4lh">Benefits of Integrating UPI and Remittance</h2>Mobile-first InteroperabilityUPI offers a mobile-first, interoperable open payment infrastructure. This allows Payment Service Providers (PSPs) operating on diverse payment systems to undertake, clear, and settle payment transactions through a common interface with common identifier/security standards. This minimizes the challenges of integration and interoperability.Anywhere Anytime AvailabilityUsually, cross-border payments are restricted to banking hours/days. But UPI is a 24x7, 365 days service. With UPI, remittances can be done at any time via more than one digital channel from anywhere without worrying about the banking hours, bank/public holidays, or even bank strike.Real-time TransactionsUPI is a real-time payment system that instantly completes and settles the transactions. It eliminates the need for registering the payee and the waiting time to activate the payee as a beneficiary. The interface allows the users to transfer money by simply keying in the virtual address or UPI ID to make the requisite payment. This will drastically reduce the transaction time and associated risks.Curtails ErrorA lot of things can go wrong when customers transfer money by entering the details of the beneficiary’s bank account. For example, they can provide an incorrect account number or a wrong IFSC code leading to a transaction failure. UPI remittance can curtail such errors as the customer can disregard the bank account details and remember only the Virtual Payment Address (VPA) or the UPI ID to complete a transaction successfully.Prevents FraudUPI uses proxy identifiers like a mobile number and a user-specific Unique Identifier (UPI ID or VPA) to make payments. This is the main advantage of UPI as it addresses security and privacy concerns. Additionally, the UPI ecosystem has single-click two factor authentication to protect users from financial fraud during digital transactions.Reduces Waiting Time and FrictionAs established earlier, the remittance process entails filling up the beneficiary’s bank account details and waiting several hours to transfer the funds to their friends/family. In the meantime, the senders and receivers are both left in the dark over the state of a transfer. Implementing UPI in remittance systems helps address such frictions as it enables instant transactions and lets the customers know the status of the money transfer.Increases Cost-EfficiencyBanks charge a competitive fee for each international transaction. Since the interface has the potential to simplify the correspondence between global banks, it would reduce the time and effort involved in each transaction. This allows banks to lower the transaction fee.UPI’s real-time, round-the-clock, and simple interface radically enhances the cross-border remittance experience as customers benefit from superior efficiency, speed, accessibility, and transparency.<h2 class="heading-node" id="gzqqd1ipr">M2P — UAE’s first UPI-enabled Remittance Service Provider</h2>As UAE’s first UPI-enabled remittance service provider, we enable banks and foreign exchange operators to facilitate end-to-end settlements inclusive of conversion facility. Our deep domain expertise, innovation, and technology know-how render a hassle-free/frictionless remittance experience for both the payer and payee.Most importantly, our intermediary banks are certified by NPCI, and we are compliant with the remittance directives issued by the Reserve Bank of India (RBI). Our full-fledged, mobile-first, customizable API stack simplifies UPI transactions and enables real-time international transfer.To know more about using UPIs for cross-border remittances, write to us at business@m2pfintech.com.<a class="link" href="https://m2pfintech.com/newsletter/">Subscribe</a>&nbsp;to our newsletter and get the latest fintech news, views, and insights, directly to your inbox. Follow us on&nbsp;<a class="link" href="https://www.linkedin.com/company/m2pfintech/mycompany/">LinkedIn</a>&nbsp;and&nbsp;<a class="link" href="https://twitter.com/m2pfintech">Twitter</a>&nbsp;for insightful fintech tales curated for curious minds like you.

Remittance with UPI - A Giant Leap for Cross-Border Payments

<img src="https://m2p-website-file.s3.ap-south-1.amazonaws.com/m2p-website-file/marketing-cms/m2p-blog/2022/06/Blog-Banner_02_WordPress-1.webp" alt="M2P Fintech" title="" width="100%" height="661">Imagine you own a digital wallet. Its primary function is to let you spend viz., shop with partner merchants, make payments, and transfer money to other wallets and bank accounts. Then the same wallet offers a card (any authorized card network Visa, MasterCard, RuPay) to facilitate card-based in-store and online payments. Further, the wallet also comes with a UPI virtual ID to allow payments via QR codes and <a class="link" href="https://m2pfintech.com/blog/upi-the-driver-of-economic-growth-and-inclusion/">UPI</a>.This is payments interoperability making life easy for you.<h2 class="heading-node" id="abd3">What is Payments Interoperability?</h2>Now, there are several definitions for interoperability. But at its core, it is the basic ability of multiple digital systems, applications, and databases to connect and communicate with each other.Payment platforms leverage financial technology to connect and share data among ecosystem partners, viz., banks, payment gateways, payment processors, merchants, and consumers. This integration helps carry out transactions between payment service providers, third-party processors, and other networks without hassles. The interoperability occurs at the origination point, at the network level, or through an intermediary, both in national and international payment systems.Here are a few common attributes of interoperability.<img src="https://m2p-website-file.s3.ap-south-1.amazonaws.com/m2p-website-file/marketing-cms/m2p-blog/2022/06/Interoperability_BlogBanner_02_wordpress.webp" alt="M2P Fintech" title="" id="7ruk1ov0f" width="100%" height="661">Payment system interoperability can be at domestic (national) and international levels.<h2 class="heading-node" id="558a">National Payments Interoperability</h2>National payment interoperability is limited to payment systems within a single country. National interoperability usually involves the same type of accounts. It happens between:<ul class="list-node" id="sk8vndtl8"><li>Deposit accounts issued by various banks</li><li>e-money transaction accounts offered by mobile network operators</li></ul>National interoperability is ensured through bilateral agreements between Payment Service Providers (PSP) and Payment Systems Infrastructures (PSIs). Or through a centralized interoperability solution, with standardized regulatory measures stipulated by the central bank.<h2 class="heading-node" id="2998">RBI’s Mandate for Domestic PPI Interoperability</h2>Governments and Central Banks are giving interoperability a significant push to accelerate cashless ecosystems. <a class="link" href="https://m2pfintech.com/blog/rbis-new-guidelines-for-ppis-how-will-it-impact-the-fintech-industry/">RBI</a> aims to make interoperability mandatory for all full-<a class="link" href="https://m2pfintech.com/blog/know-your-customer-kyc-the-need-for-authentication/">KYC</a> <a class="link" href="https://m2pfintech.com/blog/how-to-implement-the-best-prepaid-payment-instrument-ppi-for-your-business/">Prepaid Payment Instruments (PPIs</a>) and acceptance infrastructure by 31 June 2022. The move is to drive inclusion in <a class="link" href="https://m2pfintech.com/blog/ready-to-sneak-peek-into-global-cashless-societies/">cashless payments</a>, and optimally utilize payment instruments like cards and wallets, given the constraint of scarce acceptance infrastructures like point-of-sale (POS) devices, ATMs, QR codes, and bill-payment touch points. Any user who signs up for a wallet, <a class="link" href="https://m2pfintech.com/blog/prepaid-cards-101-a-definitive-guide-for-growth-and-profitability/">prepaid card</a>, or UPI on PPI rails should be able to make digital payments via any network.LivQuik is the first PPI issuer in India to achieve full interoperability as mandated by the RBI. This feat enables customers to enjoy optimized card and UPI payments across wallets. Similarly, initiatives like <a class="link" href="https://m2pfintech.com/blog/central-bank-digital-currency-cbdc-101-a-primer/">Central Bank Digital Currencies (CBDC)</a> will further drive interoperability, inclusion, and innovation.<h2 class="heading-node" id="d3b9">Need for Interoperable Cross-Border Payments</h2>Interoperability in <a class="link" href="https://m2pfintech.com/blog/cross-border-payments-a-swift-money-flow-across-borders/">cross-border payments</a> is critical to making financial services accessible, affordable, and reliable. It involves coordination between multiple stakeholders, including central banks and regulators. It encompasses technical, regulatory, and usage interoperability to enable quick, convenient, secure, and seamless transactions regardless of the Financial Services Provider (FSP) network.According to a recent Visa survey, only 50% of merchants have a cross-border trade-compatible payment processing infrastructure. Without globally interoperable payment systems, small and medium-sized merchants cannot tap into international trade and markets. Interoperability levels the playing field and eliminates the inefficiencies of a closed-loop payment systems, i.e., payments between users of only one payment provider.An end-to-end interoperable platform delivers access to cross-border payment services through an integrated gateway. It enhances the user experience through its ease-of-use customer onboarding and <a class="link" href="https://m2pfintech.com/blog/crack-the-kyc-jigsaw-ease-onboarding-compliance/">digital KYC.</a>A centralized interoperability platform calls for stringent global regulatory compliance and data security standards for utmost security. It enables faster reconciliations with real-time reporting and data-driven insights into payment patterns and customer behavior. Moreover, an automated platform saves time, reduces human error, and cuts costs. It enables infrastructure and data sharing which helps tech-driven payment ecosystems reach economies of scale.While international interoperability comes with a few challenges, it can be overcome with the support of the regulators, the global schemes, and a compatible business model across international borders and technology.<h2 class="heading-node" id="9178">Global Partnerships with Payment Networks</h2>A clear example of an interoperable <a class="link" href="https://m2pfintech.com/blog/cross-border-payments-a-swift-money-flow-across-borders/">cross-border payments</a> partnership is that between India’s <a class="link" href="https://m2pfintech.com/blog/upi-the-driver-of-economic-growth-and-inclusion/">UPI</a> and Singapore’s PayNow. The need for faster cross-border payments and <a class="link" href="https://m2pfintech.com/blog/fintech-a-catalyst-for-financial-inclusion/">financial inclusion</a> has been a catalyst in establishing the link between India and Singapore. The interoperable link between UPI and PayNow, enables instantaneous, cost-effective, and transparent payments across borders.Now for those new to UPI, it is India’s real-time payment system with a Virtual Payment Address (VPA). It is completely mobile-based and supports person-to-person (P2P) and person-to-merchant (P2M) payments and funds transfers.And PayNow is Singapore’s real-time payment system available to all participating banks and non-bank financial institutions. It is also a mobile-based system and enables peer-to-peer funds transfer using mobile numbers, VPA, or Singapore NRIC/ FIN. The UPI-PayNow partnership is only the beginning and is established to foster faster and smoother transactions between India and Singapore.India also holds strategic partnerships with the following payments networks and banks to enable seamless, interoperable transactions on our payments rails.<ul class="list-node" id="tpyzch3q0"><li>Discover Financial Services (DFS), US</li><li>Japan Credit Bureau (JCB), Japan</li><li>Union Pay International (UPI), China</li><li>Royal Monetary Authority (RMA), Bhutan</li><li>Mashreq Bank, UAE</li><li>Lycra Network, France (in the pipeline)</li></ul><h2 class="heading-node" id="1f35">Benefits of Payments Interoperability</h2>Interoperability benefits the entire payment ecosystem, including customers, merchants, end-users, and businesses. In addition to enhancing user experience and helping mitigate security risks, it delivers the advantages below.<ul class="list-node" id="ol9tnl3en"><li>Payment flexibility:&nbsp;The ability to accept all forms of payments is a game-changer. Universal payment acceptance helps customer retention and increases customer reach. Though there are several digital payment systems and digital offerings from payment system providers, customers are not required to sign into multiple systems and complete their <a class="link" href="https://m2pfintech.com/blog/know-your-customer-kyc-the-need-for-authentication/">KYC</a> many times. Interoperability brings issuers and acquirers together to undertake, clear, and settle payment transactions across payment systems, ensuring universal payments and consumer retention.</li><li>Faster payment system: Electronic transactions are the key to reconciling and collecting payments, unlike cash-based systems. Advanced technology and fast internet connectivity make it easier to increase the speed of transactions.</li><li>Secure payment and POS integration: Integration pushes the transaction directly to the payment terminal and eliminates manual entries, thereby enhancing security.</li><li>Low operational costs:&nbsp;Integrated payment platforms reduce operating costs and seamlessly communicate with multiple devices across different financial service providers. It helps save money on adding new payment terminals.</li></ul><h2 class="heading-node" id="0b67">Addressing Challenges — Getting it Right</h2>Getting interoperability right through open <a class="link" href="https://m2pfintech.com/blog/api-the-power-that-drives-new-age-banking-ecosystems/">API</a>-based platforms is a start toward harnessing and expanding the payments ecosystem. Interoperability can be tricky when dealing with legacy systems. Technical challenges usually comprise systems that use different technical standards, communication protocols, and related software and hardware infrastructure. Another common challenge relates to data and semantics. Payment systems may use different languages and need to be translated. Inadequate translation leads to corrupted or lost data.It is crucial to address the regulatory, technical, and business challenges of interoperability to make cross-border payments affordable, faster, transparent, and inclusive. Strategic partnerships with fintech firms, banks, exchange houses, and Money Transfer Operators (MTOs) with a focus on regulatory compliance and technology innovation will pave the way to overcome challenges and enable frictionless international transactions.<h2 class="heading-node" id="99d4">Need of the Hour for Today’s Generation</h2>Payments interoperability is the linchpin of today’s digitized economy. When done right, it can lead to greater convenience, speed, reliability, security, and seamlessness. It is the need of the hour today, as it enables people from all walks of life to benefit from the convenience that the cashless economy offers. It can increase service offerings, reduce costs, empower the end-user and help improve payment systems. Thus, interoperability is a strong facilitator for financial inclusion.By leveraging <a class="link" href="https://m2pfintech.com/blog/api-the-power-that-drives-new-age-banking-ecosystems/">API</a>-based <a class="link" href="https://m2pfintech.com/blog/cross-border-payments-a-swift-money-flow-across-borders/">cross-border payment platforms</a> with simple integrations across domestic switches, bank accounts, mobile wallets/e-wallets, MTO transfers, and forex card solutions, we can enable financial inclusion and seamless payments across APAC and MENA regions. With India to start with and then extended globally.Along these lines, M2P is proud to partner with LivQuik for <a class="link" href="https://m2pfintech.com/blog/upi-the-driver-of-economic-growth-and-inclusion/">UPI</a> services on exiting <a class="link" href="https://m2pfintech.com/blog/how-to-implement-the-best-prepaid-payment-instrument-ppi-for-your-business/">PPI</a> offerings like cards, wallets, gift certificates, and other products. Thereby enabling interoperable payments on the LivQuik platform.Want to know more about building interoperable payment systems?Write to us at business@m2pfintech.com.<a class="link au ly" href="https://forms.gle/kJgVoD29t2vcxtbp9" target="_blank" rel="noopener ugc nofollow">Subscribe</a>&nbsp;to our newsletter and get the latest fintech news, views, and insights, directly to your inbox.Follow us on&nbsp;<a class="link au ly" href="https://www.linkedin.com/company/m2pfintech/mycompany/" target="_blank" rel="noopener ugc nofollow">LinkedIn</a>&nbsp;and&nbsp;<a class="link au ly" href="https://twitter.com/m2pfintech" target="_blank" rel="noopener ugc nofollow">Twitter</a>&nbsp;for insightful fintech tales curated for curious minds like you.

Why Payments Interoperability is a Must for Today’s Generation?

<img src="https://m2p-website-file.s3.ap-south-1.amazonaws.com/m2p-website-file/marketing-cms/m2p-blog/2022/06/Blog-Banner_WP_01.webp" alt="M2P Fintech" title="" width="100%" height="447">India’s first step toward building a world-class digital payments ecosystem was earmarked by the launch of the Unified Payment Interface (UPI) in 2016. The advent of UPI transformed the dynamics of the Indian payments landscape. While demonetization drove the adoption of digital payments, the pandemic fueled the surge in UPI, making it the most accepted digital payment mode in the country. Today, UPI is ubiquitous and the largest retail payment system in terms of transaction value and volume.<img src="https://m2p-website-file.s3.ap-south-1.amazonaws.com/m2p-website-file/marketing-cms/m2p-blog/2022/06/Blog-Banner_WP_02.webp" alt="M2P Fintech" title="" width="100%" height="447">This brainchild of the National Payments Corporation of India (NPCI) is regulated by the Reserve Bank of India (RBI) and supported by Indian Banks Association (IBA).<h2 class="heading-node" id="7e64" style="text-align: justify">What is UPI/ UPI Transaction?</h2>UPI is a mobile payment system that entitles users to transfer money to another party instantly. It facilitates inter-bank peer-to-peer (P2P) and person-to-merchant (P2M) transactions. A user can link multiple bank accounts in a single UPI-enabled mobile application and make transfers without entering the bank details such as account number, IFSC code, or net banking user-id/password.Although UPI transactions are akin to NEFT/RTGS/IMPS, it’s more standardized across banks, convenient, hassle-free, and have zero/minimal charges. UPI not only enables quick bank transfers from wherever within a few clicks, but it also boosts transparency and interoperability. UPI apps use a unique identifier (otherwise known as UPI ID) to send/request money faster than NEFT and work 24 X 7. It also upholds contactless payment by generating a specific QR code for each user account.<h2 class="heading-node" id="7d62" style="text-align: justify">How does UPI work?</h2>UPI payment system has become a fundamental part of our daily lives. We have leveraged the UPI apps to make payments to merchants/Kirana stores or send/request money from our friends or family.Here is how a UPI transaction usually takes place.<ul class="list-node" id="sp7szltdm"><li>User downloads UPI app from play store</li><li>Specifies the mobile number to connect the device to the service provider</li><li>Upon authorization, creates a profile by setting up the Virtual Payment Address (VPA), otherwise known as a UPI ID</li><li>Links the bank account with UPI ID using the registered mobile number</li><li>Looks up another user/merchant through their mobile number, UPI ID or QR code to initiate a transaction</li><li>The payer enters the UPI pin to complete the transaction and transfer the money to the payee’s account</li></ul>(Note: It is important to note that the sign-up flow for a merchant is identical)Looks like a simple process, right?Well, there is much more going on in the background to make a UPI transaction successful. For example, during a UPI transaction, the money from the sender’s bank account is first transferred to the payment app’s pooling account or general ledger (GL) and then to the receiver’s bank account. This ecosystem primarily involves five entities.1. Payer PSPPayer PSP is nothing but a Payment Service Provider that allows customers to send money via digital transactions. It captures PIN/Biometric authorization credentials, validates, and sends a payment request to the Payee PSP via UPI.2. National Payments Corporation of India (NPCI)NPCI acts as a trusted switch between the banks and Payment service providers (PSPs). The role of NPCI is to manage the data flow between the banks and the payment apps and route it to the correct and verified destinations.3. Remitter BankRemitter Bank refers to the sender/payer’s Bank, also known as Issuing Bank. Upon NPCI’s request, it deducts money from the payee account and sends a response to NPCI once the debit is successful.4. Beneficiary BankBeneficiary Bank refers to the merchant/receiver/payee’s Bank, otherwise known as Acquiring Bank. It processes the credit request from NPCI, credits money to the payee’s account, and sends a response to NPCI once the credit is complete.5. Payee PSPUpon receiving the request, the Payee PSP acts as a Beneficiary PSP and provides the account details against a virtual address credit request. It validates the payee details and sends a response to the UPI to receive funds from the payer.<img src="https://m2p-website-file.s3.ap-south-1.amazonaws.com/m2p-website-file/marketing-cms/m2p-blog/2022/06/Blog-Banner_WP_03.webp" alt="M2P Fintech" title="" id="hkz1t9gjg" width="100%" height="447"><h2 class="heading-node" id="230c" style="text-align: justify">Types of UPI Transactions</h2>UPI transactions are classified into two types:Direct PaymentDirect payment or push payment refers to sending money. Here, the payer (the sender) initiates the transaction. For example, sending money to your friends/family or paying a merchant at the checkout by scanning a QR code. In direct payments, the user can initiate the transaction using the UPI ID or QR code.Collect RequestA transaction is called a collect request when the payee (the receiver) starts the transaction. Say, you are shopping online, and you choose the payment mode as “via UPI,” and enter your UPI ID, then, a collect request with the bill amount will be sent to your UPI app. Once you accept the request, the payment will be processed. This is a typical example of a collect request. A collect request is also known as a pull payment and can be initiated only by UPI ID.<h2 class="heading-node" id="f8d3" style="text-align: justify">Features and Benefits of UPI</h2>Since its launch, UPI has made financial transactions much easier for account holders. With over 200 banks, many digital wallets, and payment applications supporting UPI, funds transacted over UPI are already more than those transacted through debit and credit cards.Virtual Payment Address (VPA) or UPI ID is the key feature of UPI. UPI Virtual Payment Address is represented as&nbsp;&lt;unique_identifier&gt;@&lt;address_provider&gt; and serves as the addressing layer for a bank account. It helps sustain privacy and keeps a check on financial frauds.Here are some of the benefits of the UPI Payment system.<ul class="list-node" id="wkxiyj1oy"><li>Universal payment system for accessing multiple bank accounts</li></ul>UPI empowers the users to link numerous banking accounts with a single UPI-based app and allows users to choose one account as a default account for making payments. This is the main advantage of UPI, as it eliminates the need for installing individual apps for different banks.<ul class="list-node" id="f2dvpeheq"><li>Unique identifier enables easy and more secure transactions</li></ul>UPI addresses the security and privacy concerns by implementing the user-specific Unique Identifier (UPI ID or VPA). The user can transfer funds using the UPI ID, thus ridding the need to provide the bank account details. Additionally, the UPI ecosystem has single-click two factor authentication to protect users from financial fraud during digital transactions.<ul class="list-node" id="0lmse4odg"><li>Expands business opportunities for banks</li></ul>UPI has made P2M transactions hassle-free and convenient. Almost every local grocery shop and street vendor have QR codes to accept UPI transfers/payments. This empowers banks to tap into the C2B segment. It also supports the growth of ecommerce transactions and has made online shopping quick and effortless as it drastically reduces the time taken to process a payment.In a conventional card transaction, the user enters the debit card/credit card number, expiry date, and CVV code and waits for the OTP to make a payment. With UPI, the user enters the UPI ID and gets an alert on their phone to verify the transaction and completes the payment within a few seconds. This gives banks the opportunity to infiltrate the ecommerce/m-commerce sector.<ul class="list-node" id="hg4d8be12"><li>No need to register the beneficiary</li></ul>Unlike IMPS/NEFT, UPI does not ask users to fill in banking details such as account number or IFSC code to register the payee as a beneficiary. This means the users need not wait for 30 minutes (in most cases) to activate a beneficiary. The interface allows the users to transfer money by simply keying in the virtual address or UPI ID to make the requisite payment.<ul class="list-node" id="premz2wts"><li>Instant transfer — anytime anywhere</li></ul>Customers can do UPI-based transactions round-the-clock, 365 days. Users can make payments or transfer funds instantly from anywhere at any given point of time without worrying about banking hours, bank/public holidays, or even a bank strike.<h2 class="heading-node" id="0586" style="text-align: justify">How is India using UPI?</h2>With over 200 million users and 323 banks on the bandwagon, UPI exhibited stupendous growth in terms of the number of users and transactions. Thanks to the scalability, UPI saw newer heights in May 2022. It clocked 5.95 billion transactions in May 2022 *, the highest number of monthly UPI transactions ever since its inception in 2016. Moreover, it recorded a 10% month-on-month growth not only in total transactions but also in value. (*As per NPCI data).<img src="https://m2p-website-file.s3.ap-south-1.amazonaws.com/m2p-website-file/marketing-cms/m2p-blog/2022/06/Blog-Banner_WP_04.webp" alt="M2P Fintech" title="" width="100%" height="447">Connectivity and convenience are the prime factors contributing to the growing preference for UPI among customers and merchants. The most used UPI-based applications are PhonePe, Google Pay, Paytm, Amazon Pay, MobiKwik, iMobile, Chillr, and the BHIM app. Some popular banking applications with UPI features include Axis Pay, Baroda MPay, Pockets-ICICI Bank, SBI Pay, Yes Pay, and Airtel Money.Scaling up UPINPCI and RBI have constantly been scaling up UPI’s serviceability. At first, UPI payments could be made only via bank accounts. Then, UPI apps allowed users to add debit card details for transactions. Now, RBI has announced Rupay credit cards can be linked to UPI for payments. Experts believe it will not be long before Visa and Mastercard credit cards join the club.UPI 123 PAYUntil recently, UPI was limited to smartphone users with an internet connection. While India is home to over 180 crore mobile phone users, only 78 crore have smartphones and the rest use feature phones. To empower all such users to leverage the mainstream digital payments system, the Reserve Bank of India introduced a new mode of payment mode, UPI 123PAY, on March 8th, 2022.Since its launch, the platform has recorded 21,833 successful transactions with more than 37 thousand registered users. Economic experts claim this is undoubtedly the beginning of digital financial inclusion.Aadhaar-based activationFurthermore, NPCI included a unique feature in UPI for customers who do not own or wish to own debit/credit cards. It enables such users to activate UPI using their Aadhaar number. The OTP required to set up the profile will be sent to the mobile number linked with the Aadhaar card. Upon verification, the user can create the profile and initiate the transaction. However, the feature is yet to be launched for public use.<h2 class="heading-node" id="531e" style="text-align: justify">NIPL and international partnerships — UPI around the World</h2>The success of UPI took the world by storm. In fact, several countries are trying to replicate UPI’s settlement infrastructure. With this incredible technological feat, the Indian fintech industry is at the forefront of some of the most developed countries.NPCI established a special payments arm, NPCI International Payment Ltd (NIPL), to internationalize RuPay and UPI and facilitate real-time bank account payout in India. NIPL inked partnerships with several countries such as the UAE, the US, the UK, Nepal, Bhutan, China, Japan, and Singapore to launch Indian payment rails in their jurisdictions.Some of the prominent international partnerships include LuLu Financial and Al Ansari Exchange (UAE), Discover Financial Services (DFS) (USA), Japan Credit Bureau (JCB) (Japan), Union Pay International (UPI) (China), PPRO Financial (UK), Monetary Authority of Singapore (MAS), Network for Electronic Transfers (NETS), and Liquid Group, (Singapore), and Royal Monetary Authority (RMA) (Bhutan).As an inland initiative, in 2021, Induslnd Bank joined with NPCI to simplify cross-border payments or NRI remittances. The bank is said to use UPI ID to transfer money to the beneficiary. According to the agreement, Induslnd Bank will act as a gateway between the MTOs and NPCI’s UPI system for validating and settling payments into the payee’s account. With this new partnership, IndusInd Bank will become the first Indian bank to offer cross-border payments or NRI remittances via UPI. The product is in the testing phase and is expected to go live in Q2 of 2022.These partnerships are significant milestones in the evolution of the UPI payment system as it is expected to enable hassle-free low-value transactions and cross-border remittances.UPI is the cornerstone of India’s economic transformation and revolution, aiding the country to move into the future with a paperless economy, thereby curbing the money laundering activities and tax evasions. The interface has a tremendous potential to empower the development of next-generation digital platforms for lending and payments.If you wish to implement UPI in your business, write to us at&nbsp;<a class="link au mz" href="mailto:business@m2pfintech.com" target="_blank" rel="noopener ugc nofollow">business@m2pfintech.com</a><a class="link" href="https://m2pfintech.com/newsletter/">Subscribe</a>&nbsp;to our newsletter and get the latest fintech news, views, and insights, directly to your inbox. Follow us on&nbsp;<a class="link" href="https://www.linkedin.com/company/m2pfintech/mycompany/">LinkedIn</a>&nbsp;and&nbsp;<a class="link" href="https://twitter.com/m2pfintech">Twitter</a>&nbsp;for insightful fintech tales curated for curious minds like you.

UPI - The Driver of Economic Growth and Inclusion

<img src="https://m2p-website-file.s3.ap-south-1.amazonaws.com/m2p-website-file/marketing-cms/m2p-blog/2022/06/Artboard-1-copy-8-6.webp" alt="M2P Fintech" title="" id="9lksxlzsk" width="100%" height="528">It’s been 3000 years. Not a single day passes without the usage of money.Be it physical or digital, the movement of money signifies value and hope to the millions involved. Money transfer operators, banks, and <a class="link" href="https://m2pfintech.com/blog/fintech-101-discover-the-3ws-of-fintech/">fintechs</a> have played a remarkable role in enabling seamless money transfer in a quick, secure, and convenient manner.<h2 class="heading-node" id="19yqmhede" style="text-align: justify">Shift from Cash to <a class="link" href="https://m2pfintech.com/blog/ready-to-sneak-peek-into-global-cashless-societies/">Cashless</a></h2>Money was not always fancy as crisp notes and lightweight coins three thousand years ago. It had a humble beginning taking the form of cowrie shells, rail stones, farm produce, and livestock to be used as exchange. Slowly precious metals like gold, silver, and copper were used in trade. Then cash in the form of metal coins and currency notes came into prevalence.<img src="https://m2p-website-file.s3.ap-south-1.amazonaws.com/m2p-website-file/marketing-cms/m2p-blog/2022/06/Infographic-1.webp" alt="M2P Fintech" title="" id="zrmpc1bbw" width="100%" height="1321">Today, the world has transitioned from cash to a <a class="link" href="https://m2pfintech.com/blog/ready-to-sneak-peek-into-global-cashless-societies/">cashless economy</a>. <a class="link" href="https://m2pfintech.com/blog/payment-cards-design-made-simple-heres-what-you-need-to-know/">Payment cards</a>, QR codes, contactless modes, cryptocurrencies, and <a class="link" href="https://m2pfintech.com/blog/central-bank-digital-currency-cbdc-101-a-primer/">digital currencies</a> are hogging the limelight as they are super convenient, simple, and secure ways of moving money and making payments.<h2 class="heading-node" id="2421" style="text-align: justify">Evolution of Money Transfer</h2>Changes in customer expectations, the need for enhanced experiences, and the growing cyber security issues demanded an evolution in money transfer. Payment apps, digital wallets, wearables, and real-time payment platforms are doing their best in fulfilling this quest by enabling quick, simple, and secure Peer to Peer (P2P) and Peer to Merchant (P2M) transfers and payments.Curious to know when and how money transfer began?Here you go.<h3 class="heading-node" id="d1f6" style="text-align: justify">Hawala</h3>The hawala system is the oldest form of money transfer that dates back to the 8th century. Known as the “money transfer without money movement,” it was actively used in India, the Middle East, and South Asia.Heavily based on trust between hawala agents, the transfer is usually done without any promissory notes. The hawala agents could be friends, family, or trusted acquaintances who settle debts between parties with cash, property, or services.Here’s how hawala works.The sender gets in contact with a hawala dealer A to transfer money to another country. As soon as the money, commission, and beneficiary details are shared, the sender receives a unique secretive code. Then the hawala dealer A contacts dealer B from the recipient country. Dealer B then delivers the amount to the designated receiver after revealing the secretive code. The unique code will reconfirm if the receiver is the right individual or not.The hawala system is still in use as an alternative to the remittance channels and traditional banking systems.<h3 class="heading-node" id="cfd9" style="text-align: justify">Wire Transfer</h3>Next in line was wire transfer, the electronic mode to transfer money through a global network. It was known for its fast, irreversible, foreign, or domestic electronic money transfers. In the 19th century, Western Union was the first money transfer operator to introduce wire transfers.<img src="https://m2p-website-file.s3.ap-south-1.amazonaws.com/m2p-website-file/marketing-cms/m2p-blog/2022/06/Infographic-2-V2.webp" alt="M2P Fintech" title="" id="8tw76fb9s" width="100%" height="661">Here the sender had to reach out to the office with the money, and the operator would send a message and ‘wire’ those funds to the destined location. Codes and passwords were used between the parties involved to ensure security. Soon wire transfer became an integral part of moving or exchanging money internationally, and it still is.<h3 class="heading-node" id="750d" style="text-align: justify"><a class="link" href="https://m2pfintech.com/blog/payment-cards-design-made-simple-heres-what-you-need-to-know/">Payment Cards</a></h3>Metal money was the first precursor to the present-day cards. It was issued by Western Union in 1914. A few years later, in 1928, the Charga-plate was introduced in the US, which was offered by merchants to their regular customers. They became popular among the department stores, as they could issue cards on their own. These were the first transactional cards in history.Later in the year 1946, John C. Biggins of Flatbush National Bank of Brooklyn introduced the “Charg-It” card, which allowed people in a two-square-block radius to charge purchases to the bank. Charg-It was an easy way for consumers to use the card at multiple businesses. Merchant however had to leave sales slips with the bank.Then came the Diners’ Club card in 1950, which was the first real <a class="link" href="https://m2pfintech.com/blog/credit-card-processing-a-definitive-guide/">credit card</a>. Called a Charge Card, its cardboard form gained massive popularity and acceptance among users. It charged merchants a 7% fee on every transaction and delivered one monthly bill on dining expenses to the cardholders.A decade later, the turning point in card transactions happened. Banks introduced ATM machines. After this move, cards were used at ATMs to withdraw cash and make deposits.In the early 90s, credit card adoption in India was slow. People who travelled to foreign countries were the only ones to use the Diners cards in India in the 1960s. It nearly took 15 years for the Diners card to reach 8,000 registered users in India.In 1980, the Central bank of India brought in credit cards in association with Visa and Master Card. As a result, debit and credit cards became the dominant source for non-cash payments, which retailers and consumers readily accepted.<h3 class="heading-node" id="4276" style="text-align: justify">SWIFT Transfer</h3>In 1973, SWIFT transfers came into existence. They were typically wire transfers but done via the Society for Worldwide Interbank Financial Telecommunications (SWIFT) network. This global messaging network helped improve the speed, transparency, and consistency of payments. It changed the perception of how the credit system worked and became a globally recognized provider of secure financial messaging.<h3 class="heading-node" id="f5e7" style="text-align: justify">Growth of Online and Mobile Money Transfers</h3>In the late 90s and early 2000s, electronic deposits, <a class="link" href="https://m2pfintech.com/blog/cross-border-payments-a-swift-money-flow-across-borders/">digital remittances</a>, and mobile money transfers became prominent. The following payment systems facilitated money transfers from anywhere, anytime, without any hassles.<img src="https://m2p-website-file.s3.ap-south-1.amazonaws.com/m2p-website-file/marketing-cms/m2p-blog/2022/06/Illustration-NEFT-V2.webp" alt="M2P Fintech" title="" id="llvfslid3" width="100%" height="661"><ul class="list-node" id="4rj8aja12"><li><a class="link" href="https://m2pfintech.com/blog/upi-the-driver-of-economic-growth-and-inclusion/">UPI</a></li></ul>Introduced by the National Payments Corporation of India (NPCI) and the RBI in 2015, <a class="link" href="https://m2pfintech.com/blog/upi-the-driver-of-economic-growth-and-inclusion/">the Unified Payment Interface (UPI)</a> is an easy way to transfer money in real-time from one bank to another. Here, the UPI ID acts as the virtual payment address, and UPI PIN is the security password to authenticate the transaction. These are only two things required to transfer money. UPI eliminates the need to enter complex bank account details to initiate a money transfer.<ul class="list-node" id="u29byozm5"><li>IMPS</li></ul>Immediate Payment Service is an instant fund transfer service and can be simply defined as NEFT+RTGS. It ensures real-time interbank funds transfer in the Indian banking system provided by banks. The cap on transaction limit is set very low to avoid fraudulent complaints. In order to make an IMPS transfer, you just need to know the destination account holder’s IMPS id (MMID) and their mobile number.<ul class="list-node" id="nix10ovkr"><li>RTGS</li></ul>The ‘Systemically Important Payment System,’ Real Time Gross Settlement (RTGS) System was introduced in 2004. It is a secure electronic fund transfer system that provides real-time online settlements for bank transactions across the country.<ul class="list-node" id="h04bgsk39"><li>NEFT</li></ul>National Electronic Fund Transfer (NEFT) was introduced in 2005 and soon became one of India’s prominent electronic fund transfer systems. It is the most secure way of transferring funds from one bank account to another. Here, the funds are transferred using the Reserve Bank of India’s NEFT infrastructure, which is a nationwide payment system facilitating safe and secure transactions all over the country.Now, this is not all. There are several other money transfer modes that involve virtual and cryptocurrencies. We’ll cover them in subsequent articles.Feel we’ve missed out on something. Let us know in the comments below.<h2 class="heading-node" id="2754" style="text-align: justify">The road ahead</h2>Newer technologies and <a class="link" href="https://m2pfintech.com/blog/api-the-power-that-drives-new-age-banking-ecosystems/">API-based</a> tech stacks are paving the way for quicker, robust, hassle-free money transfer processes. Banks and money transfer operators leverage fintech partnerships to enable great remittance experience, cut costs, and manage backend integrations and tech infrastructure. Robust security verifications and <a class="link" href="https://m2pfintech.com/blog/why-is-risk-based-authentication-rba-critical-for-banks/">risk management systems</a> promise a secure, real-time flow of money across borders.Want to know more about digital money transfers? Write to us at&nbsp;<a class="link au md" href="mailto:business@m2pfintech.com" target="_blank" rel="noopener ugc nofollow">business@m2pfintech.com</a><a class="link" href="https://m2pfintech.com/newsletter/">Subscribe</a>&nbsp;to our newsletter and get the latest fintech news, views, and insights, directly to your inbox. Follow us on&nbsp;<a class="link" href="https://www.linkedin.com/company/m2pfintech/mycompany/">LinkedIn</a>&nbsp;and&nbsp;<a class="link" href="https://twitter.com/m2pfintech">Twitter</a>&nbsp;for insightful fintech tales curated for curious minds like you.