In the last ‘payments digest’, I wrote about RBI guidelines related to SI on Cards (mandate on cards). So let’s revisit that… but before that, I recommend reading my earlier article on cards and SI on Cards.
I prefer reading books than listening… but when I got a 3 month free subscription to Audible,I thought ‘why not’ (free things excite us all… don’t they?). I registered myself and added my card for a free-trial.. Frankly, I didn’t like the experience, so I didn’t use the App (in-fact deleted it) and totally forgot about it for 3 months.
Then one day…
It’s been a year since we went into lock down… and I am sure you are overloaded with articles with some tacky titles like ‘Coronaversary’, ‘The year that wasn’t’, ‘Was it WFH or NFH (netflix from home)‘, ‘I learnt Yoga, what did you do?’… Anyway, as we all know how exactly the year was, I won’t waste more of our time on that and keep this update only to the payments world.
Last year, around the same time, Yes Bank was put under moratorium, the FinTechs / PSPs/PAs who were using Yes Bank’s APIs (Payout, UPI, PG etc.) were blacked…
Let me bring back one of my favourite toys — Russian Nesting Dolls… why favourite? I am too old to play with them and my daughter is too bored of them… but Matryoshka Dolls / Russian Nesting Dolls are a perfect analogy for India’s payment ecosystem… I am sure that previously I have referred to them, multiple times, throughout this blog. So why again?
Because today, I will write about wrappers or super wrappers… Although my focus will be on the payment gateway side, I would still briefly touch upon a few interesting cases from other areas of payment/FinTech. …
What is the difference between a competition and a substitute? Let us take Indigo Airlines… The competition can be Spicejet or Air India. But who are the substitutes? Those can be buses, trains, ships or cars…. But who is the biggest substitute for the airline? It is Zoom, Webex or Google Hangout (at least for business travels)
Similarly, let us see who are the competitions or substitutes to online payments?
What is the difference between a competition and a substitute? Let us take Indigo Airlines… The competition can be SpiceJet or Air India. But who are the substitutes? Those can be buses, trains, ships or cars…. But who is the biggest substitute for the airline? It is Zoom, Webex or Google Hangout (at least for business travels)
Similarly, let us see who are the competitions or substitutes to online payments?
Achtung: This is a super lengthy and complicated topic… So if your skill set includes getting bored in lightning speed, then please skip it.
Those who have read Dan Brown’s ‘Da Vinci Code’ or watched the movie with the same name starring Tom Hanks, would be familiar with Knights Templar — a holy military order with the purpose of protecting Jerusalem during Crusades. But here is a little known fact about Knights Templars — they developed the first cross border payment/banking system. There was always risk (theft, loss) in carrying money/gold on a pilgrimage to Jerusalem. …
I wrote about payout or disbursement in article №42… where I covered various business cases, requirements of payout and briefly wrote about various rails. Subsequently, I received a few feedback that I had jumped the gun by going a bit advanced and should have covered a little bit more about the basics. So I thought about touching upon the basics again… even if it is a repeat, it won’t harm… right?
Here are the rails that are used for payout or disbursements
RTGS (Real Time Gross Settlement)
Inter-bank transfer platform managed by Reserve Bank of India (RBI) for facilitating large…
In Chapters 5 & 6, I covered the Settlement Time and Settlement Amount. As per the standard process, a merchant receives the settlement on T+1 or T+2 working days. But what if the merchant wants settlement earlier than that? Or may be on a bank holiday?
Before we get into more details… why does the merchant want an early settlement? Ans: For fulfilment of financial obligations — a hyperlocal merchant wants to make payments to its vendors, a gaming merchant wants to disburse winnings to its users while an NBFC will use those funds to issue more loans.
When I was growing up, there were 9 planets and today, we only have 8. Yes, Pluto is still revolving around the Sun but it is not a planet any more. We humans have the profound capacity to change things and at times, we change things which are not even in our control. And it doesn’t even matter… like having 8 planets instead of 9… who cares… neither we nor Pluto… right?
Here is a list of few things that changed since my last ‘payment digest’ and these things will definitely affect the payments ecosystem:
NPCI and more little NPCIs
Thanos, the mad Titan, is one of my favourite super villains. He is totally mad with a slight philosophical inclination. Thanos had one goal: collect 6 Infinity Stones and with the ‘snap’ of a finger, cull half of all living creatures so the other half can live a life of plenty. For the Mad Titan, that is the way to create ‘the perfectly balanced’ universe.
Let’s say Thanos jumps out of ‘Marvel Universe’ to ‘Payments Universe’ (of course, after proper counselling) with the vision to create a perfectly balanced recurring payment solution… Then what would that perfectly balanced solution be?
…
Aditya Kulkarni
Trying to follow Richard Feynman’s words “do what you can, learn what you can, improve the solutions, and pass them on”. < www.linkedin.com/in/kulkarniadi/ >
