RBI opens up RTGS, NEFT to non-banks in phases
Context
The Reserve Bank of India (RBI) allowed authorized non-bank payment system providers (PSPs) to participate in centralized payment systems (CPS), such as real-time gross settlement (RTGS) and national electronic fund transfer (NEFT), as direct members.
What is PSPs?
- PSPs include prepaid payment instrument (PPI) issuers, card networks, white label ATM (WLA) operators and trade receivables discounting system (TReDS) platforms.
What is centralized payment system (CPS)?
- It means that a central authority is in control of the data and functions of the said platform.
- Component:Real Time Gross Settlement (RTGS) and National Electronic Funds Transfer (NEFT) system.
- Both owned and operated by the Reserve Bank.
|
Decentralized Payment Network
|
|
Centralized |
Decentralized |
|
|
Third-Party Involvement |
Yes |
No |
|
Control |
Full control stays with the central authority |
Control stays with the user itself |
|
Hackable |
More prone to hacks and data leaks |
Less prone to hacks and data leaks as no single point of failure |
|
Single Point of failure |
Yes |
No |
|
Ease of use |
Intuitive and easy to use |
Not easy to use |
|
Exchange fees |
Higher fees |
Less fees |
|
Anonymous |
Users are not anonymous |
Offers anonymity |
