RBI’S REPORT ON THE UPI AND QR CODE: RELEVANCY IN THE ERA OF CYBERCRIME

INTRODUCTION

The Reserve Bank has taken several initiatives for encouraging conversion of payments within the country. Federal Reserve Bank has conjointly revealed its Vision document for Payment and Settlement Systems in Bharat and recently discharged the Vision 2021. Over the past few years, the Government and Federal Reserve Bank have got wind of numerous committees for understanding the wants of the payments ecosystem and suggesting appropriate measures for enhancing the usage of digital payments. A number of the committees like Committee on Medium Term Path for Financial Inclusion (Chairman: Shri Deepak Mohanty), Committee of Chief Ministers on Digital Payments (Chairman: Shri Chandra man Naidu). The expansion of monetary services in Bharat has, for the most part, been a crystal rectifier by the banks.

 The regulator still because the banks have crystal rectifier the initial thrust, development and support of digital payments infrastructure and systems. Non-banks have entered the market and distended the vary of payment services out there to the Indian shopper backed by their strength in technology and client central innovation. 

The digital payments scheme has created substantial progress on the availability or the issuing aspect. On the issuing aspect, a large variety of payment services are offered through bank accounts, bank branches, business correspondence, cards, mobile and connected devices, backed by sturdy and resilient payments infrastructure together with RTGS, NEFT, BHIM UPI, Card Networks, POS, ATMs, Mobile Wallets, APBS and AEPS.

BHIM UPI Platform (Unified Payments Interface)

The BHIM UPI Platform that is application-based and usable on sensible phones with web access has the potential to revolutionize the mobile payments arena. The purchasers will give simply a registered virtual address for creating or receiving payments. The BHIM UPI Platform was launched in August 2016, and presently one hundred forty-four banks participate within the theme. The system allows a pair of issue authentication and instant cash transfer through an easy payment address. The system has grownup apace since launch, nearing 800M transactions per month in Mar 2019, but three years from launch.

BHIM UPI QR has grownup to be a light-weight, low price methodology to bring merchants into the acceptance network. 

The committee is of the read that this should be inspired to expand apace the number of merchants that can settle for payments digitally. The committee recommends that BHIM UPI embrace support for repeat payments, within the management of the user. A user ought to be able to see a listing of all active mandates, payments against these mandates, and to revoke them at the can. This may cut back friction in several high-volume payment streams, and alter bill payments, subscriptions, EMIs.

BHIM Aadhaar Pay – BHIM Aadhaar Pay allows the merchants to accept payments from customers exploitation their Aadhaar variety and biometric identification of transactions. The govt employs APBS to supply direct profit transfers to the user’s checking account. In contrast, AEPS permits a business correspondent to help the user in retreating cash or depositing it. Aadhaar Pay permits a user to form a payment at a merchandiser with Aadhaar.

QR CODE

QR Codes are two-dimensional machine-readable barcodes that are progressively accustomed to facilitate mobile payments at the location.

In India, QR Code Payment Systems loosely support three different types of QR Code payments:

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a) India QR

{bharat | India | Republic of Bharat | Bharat | Asian country | Asian nation} QR India has launched India QR – the world’s initial absolutely practical QR code payment system. Its specifications are together developed by RuPay, Visa, MasterCard, and Amex. It's a digital resolution to extend the acceptance infrastructure within the country. A substantial quantity of effort has been endowed by banks (issuers and acquirers), in each technological and non-technological areas, to supply this mode of payment to its customers. India QR is predicated on EMVCo merchandiser given QR standards, that permits ability across banks and card schemes. It supports all card payment network credentials and has provisions for domestic payment ways like UPI / proprietary payment ways.

Bharat QR has two versions:

i. India QR Version three.0 & less - solely supports payment through Cards

ii. India QR Version four.0 - Supports Cards & UPI payments

As per tally information, a pair of million India QRs are deployed within the market by deed banks. The quantity of digital payments created with India QR remains low. Multiple stakeholders have indicated that merchandiser on-boarding, lack of standardization of India QR enabled apps and industrial models got to be checked out. The India QR is fairly versatile for carrying extra information.

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b) UPI QR 

The NPCI launched UPI in August 2016. UPI enabled apps to enable a direct debit to the bank account, unlike the Bharat QR code where the payment is aligned with a debit/credit / prepaid card of the customer, linked to the mobile banking app used by the customer. NPCI gradually enabled interoperable UPI QR code specifications used by Payment Service Providers (PSPs) as the de-facto substitute for acquiring smaller merchants at a very minimal cost, owing to its asset-lite acquiring model. UPI’s ability to innovate at a faster pace, to meet local requirements, has enabled various use cases. 

UPI QR has three versions:

i. UPI Version one.0 – Supports peer to look and businessperson payments victimization UPI

ii. UPI Version two.0 – sweetening in security & new functionalities

iii. UPI Version three.0 (Work in progress) - New Functionalities like GST, Tips, International transactions (multi-currency)

c) Proprietary QR

Once termination, fast Response (QR) codes became a well-liked possibility for creating payments at restaurants, grocery retailers and other bill payments. Notecase based mostly firms licensed by run batted in, as paid Payment Instruments (PPI), pioneered the system of Proprietary QR codes. The notecase suppliers swelled their businessperson networks and strengthened their team to acquire new merchants sharply.

RELEVANCY within the ERA OF CYBERCRIME

While there are too many varieties of frauds, we’ll be discussing those relating UPI scamming, Here goes:

• Phishing Fraudsters send counterfeit e-mails to access sensitive info of the potential victim. Once the victim keys in their details (password or PIN) into the fallacious website, the data is instantly passed on to the hacker for misuse.

• Malware is one in every of the foremost common styles of cyber fraud and may be erroneously downloaded from a faux email attachment or associate unsecured web site. Malware is meant to extract and replica information from the infected device.

• cash Mule Money Mule could be an additional elaborate fraud wherever once the victim’s information is obtained, fraud rings transfer cash to associate negociant account to deal with the loot. This account acts joined of {the cash | the cash | the money} mules to park money collected from completely different victims.

• SIM biological research could be a recent addition that has mushroomed once the OTP-mandatory rule by banks. If a fraudster clones your SIM, he will even amendment the UPI PIN. The fraudster gets hold of the victim’s checking account details and ID proof to reset the PIN.

• Vishing Vishing is generally scamsters sitting as bank representatives, asking queries ‘on behalf of the bank’. These people weave an online of lies and enquire regarding the victim's info to extract their PIN or parole.

Implementation Roadmap by banking concern of Asian nation

(a) RBI might examine and supply a transparent conceive to terminate proprietary, control system QR codes in favour of open, practical standards.

(b) run batted in might issue the rules for revised KYC method to confirm quicker businessperson on-boarding

(c) New options like 'Save QR', 'Invoice relay through Dynamic QR', 'Setting up eMandate' etc. for future/repeat payments is also allowed.

(d) On-boarding of small merchants underneath India QR (similar to P2PM category) is allowable (Merchant with up to Rs. one hundred thousand monthly credits).

(e) Offline QR codes are allowable for low worth payments like transit, ticketing etc.

CONCLUSION

India encompasses a made diversity of digital payment choices. However, the prices of digital payments are still a problem, and the acceptance infrastructure isn't widespread. The committee has thought-about the various payment systems, their standing, and therefore the problems associated with every system. Users ought to perceive why a style of payment – money, or digital is healthier for them, and build the proper alternative. The payments trade should try to place along with a product/service such users can escort that over money. The run should rationalize the definition of digital payments and embody all data which will be captured with hi-fi. This could embody unregulated sources (on best effort basis) additionally, as periodic surveys commissioned to assist perceive user expertise. This knowledge should be enough for all stakeholders to investigate and monitor the provision of, and demand for, digital monetary services, additionally on assess the impact of key programs and reforms.