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India unveils new digital payments system

The Department of Posts and the public sector bank India Post Payments Bank (IPPB) recently launched DakPay, a new digital payment application.

The move is part of the government’s ongoing efforts to provide and promote digital financial inclusion across the country. The Union Minister for Communications, Electronics, and Information Technology, Ravi Shankar Prasad, noted that it is a unique concept where one can order and avail postal financial services at doorsteps. He expects it to make banking services and postal products more accessible.

According to news reports, DakPay offers a host of digital financial and assisted banking services available through the postal network. It aims to cater to the financial needs of various sections of society, particularly those living in rural areas. The services include free-of-cost money receipts and transfers at doorsteps and scanned QR codes to make payments for a range of utility and banking services.

DakPay will bring simplified payment solutions to all by providing access to banking and payment products and services either through an application or in an assisted mode with the help of postmen and women.

Through it, India Post will deliver the following facilities:

  • checking bank balances
  • enabling transactions through multiple bank accounts
  • a payment facility through the IPPB mobile banking application for postal products that are paid for by the DakPay virtual debit card
  • cash withdrawals and deposits using the Aadhaar-enabled payment system

The government is also contemplating a provision for credit facilities. The IPPB was launched on 1 September 2018. It has enabled over 136,000 post offices, of which more than 113,000 are located in rural India, to provide a complete suite of banking services. About 180,000 postmen and women, and Gramin Dak Sevaks, have been equipped with smartphones and biometric devices to provide doorstep banking services, the report noted.

By November-end, DakPay had 39 million customers. All IPPB service channels are available in 13 languages. The Department of Posts also signed a memorandum of agreement (MoA) with CSC e-Governance Services India Limited to set up common service centres in more than 10,000 post offices. The centres will deliver over 100 services.

The Reserve Bank of India recently said it plans to secure online payment processes, a step toward preventing and reducing fraud. It announced its new measures to secure digital payment channels via the proposed Digital Payment Security Controls Directions, 2020.

As OpenGov Asia reported, the project is for regulated entities to set up a robust governance structure for systems and to implement common minimum standards of security controls for channels like the Internet, mobile banking, and card payments, among others.

While the guidelines will be technology and platform agnostic, it will create an enhanced and enabling environment for customers to use digital payment products more safely and securely. The RBI Governor, Shaktikanta Das, explained that the directions will contain requirements for strong governance, implementation, and monitoring of certain minimum standards on common security controls.

Furthermore, to strengthen and improve the efficacy of the internal grievance redress mechanism of the banks and to provide better customer service, RBI has decided to put in place a comprehensive framework comprising inter-alia of enhanced disclosures on customer complaints by banks. Also, a monetary disincentive in the form of recovery of the cost of redress of complaints from banks when maintainable complaints are comparatively high.

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