{"id":25717,"date":"2019-10-22T16:31:37","date_gmt":"2019-10-22T11:01:37","guid":{"rendered":"https:\/\/enterslice.com\/learning\/?p=25717"},"modified":"2023-06-24T20:58:37","modified_gmt":"2023-06-24T15:28:37","slug":"on-tap-authorisation-of-payment-systems","status":"publish","type":"post","link":"https:\/\/enterslice.com\/learning\/on-tap-authorisation-of-payment-systems\/","title":{"rendered":"RBI Guidelines on \u201cOn-tap Authorisation of Payment Systems\u201d"},"content":{"rendered":"<p class=\"has-drop-cap\">On 15<sup>th<\/sup> October 2019, RBI issued guidelines on <strong>&ldquo; On-tap Authorisation of Payment Systems.&rdquo;<\/strong>&nbsp; The main aim behind the introduction of these guidelines is <strong>diversification of risk and to encourage innovation and competition<\/strong>. Under this, RBI described minimum net-worth criteria for retail payment systems. Earlier, on 21st January 2019, RBI released a policy paper on the Authorisation of New Retail Payment Systems, stating liberal entry points under this segment for new entrants. As we know, for the creation of a reliable payment ecosystem, non-banks are playing a vital role. <\/p>\n\n\n\n<p>Now, we are going to\nunderline the highlights of the circular; <\/p>\n\n\n\n<h2 class=\"wp-block-heading\">An\noffering of On-tap Authorisation<\/h2>\n\n\n\n<p>RBI is going to offer on-tap authorisation to the below mentioned:<\/p>\n\n\n\n<ol>\n<li><strong>Bharat Bill Payment Operating Unit\n(BBPOU)<\/strong><\/li>\n<\/ol>\n\n\n\n<p>It\nis a platform for recurring bill payments. At present, BBPOU covers five\nsegments, such as electricity bill, telecom bill, direct-to-home (DTH), gas,\nand water bills.<\/p>\n\n\n\n<ul>\n<li><strong>Trade Receivables Discounting System\n(TReDS)<\/strong><\/li>\n<\/ul>\n\n\n\n<p>It facilitates the <strong>financing of MSME invoices and bills<\/strong> drawn on corporate buyers by way of discounting by financiers. Under this, participants may take benefit from uninterrupted services for discharging functions. <\/p>\n\n\n\n<p><\/p>\n\n\n\n<figure class=\"wp-block-image\"><img decoding=\"async\" loading=\"lazy\" width=\"1024\" height=\"538\" src=\"https:\/\/enterslice.com\/learning\/wp-content\/uploads\/2019\/10\/On-tap-authorisation-1024x538.png\" alt=\"On-tap authorisation payment system - TReDS\" class=\"wp-image-25837\" srcset=\"https:\/\/enterslice.com\/learning\/wp-content\/uploads\/2019\/10\/On-tap-authorisation-1024x538.png 1024w, https:\/\/enterslice.com\/learning\/wp-content\/uploads\/2019\/10\/On-tap-authorisation-300x158.png 300w, https:\/\/enterslice.com\/learning\/wp-content\/uploads\/2019\/10\/On-tap-authorisation-768x403.png 768w, https:\/\/enterslice.com\/learning\/wp-content\/uploads\/2019\/10\/On-tap-authorisation.png 1200w\" sizes=\"(max-width: 1024px) 100vw, 1024px\"\/><figcaption class=\"wp-element-caption\">TReDS Platform<\/figcaption><\/figure>\n\n\n\n<br><p><\/p><div class=\"shadow4\"><a class=\"glossaryLink\"  aria-describedby=\"tt\"  data-cmtooltip=\"&lt;div class=glossaryItemTitle&gt;NBFC&lt;\/div&gt;&lt;div class=glossaryItemBody&gt;Non-Banking Financial Companies (NBFC) operate similarly to banks but do not possess the legal status of a bank. Registered under the Companies Act 2013 and governed by the RBI Act&amp;#039;s section(...)&lt;\/div&gt;\"  href=\"https:\/\/enterslice.com\/learning\/terms\/nbfc\/\"  data-gt-translate-attributes='[{\"attribute\":\"data-cmtooltip\", \"format\":\"html\"}]'>NBFC<\/a> &ndash; Factors can register themselves as the <strong>TReDS mechanism<\/strong> as well as they can register themselves as the <strong>financers<\/strong> on the TReDS mechanism. Not only for MSMEs, but it is also an excellent opportunity for NBFCs as they can explore new business segments. <\/div><br>\n\n\n\n<p>For\nmore details on TReDS, you can read this\narticle: <a href=\"https:\/\/enterslice.com\/learning\/trade-receivable-discounting-system-treds\/\">Know Everything about Trade Receivable Discounting System<\/a><\/p>\n\n\n\n<ol>\n<li><strong>White Label ATMs (WLAs)<\/strong><\/li>\n<\/ol>\n\n\n\n<p>Set-up by the non-banking entities<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">Net Worth &amp; Eligibility Criteria &ndash; On-tap Authorisation of Payment Systems<\/h2>\n\n\n\n<p>RBI decided on net worth criteria for entities who wish to function, operate, or provide platforms for&nbsp;the following:<\/p>\n\n\n\n<figure class=\"wp-block-image\"><img decoding=\"async\" loading=\"lazy\" width=\"1024\" height=\"538\" src=\"https:\/\/enterslice.com\/learning\/wp-content\/uploads\/2019\/10\/BBPOUs-1024x538.png\" alt=\"BBPOUs\" class=\"wp-image-25839\" srcset=\"https:\/\/enterslice.com\/learning\/wp-content\/uploads\/2019\/10\/BBPOUs-1024x538.png 1024w, https:\/\/enterslice.com\/learning\/wp-content\/uploads\/2019\/10\/BBPOUs-300x158.png 300w, https:\/\/enterslice.com\/learning\/wp-content\/uploads\/2019\/10\/BBPOUs-768x403.png 768w, https:\/\/enterslice.com\/learning\/wp-content\/uploads\/2019\/10\/BBPOUs.png 1200w\" sizes=\"(max-width: 1024px) 100vw, 1024px\"\/><figcaption class=\"wp-element-caption\">BBPOUs Payment System<\/figcaption><\/figure>\n\n\n\n<p><\/p>\n\n\n\n<figure class=\"wp-block-image\"><img decoding=\"async\" loading=\"lazy\" width=\"1024\" height=\"538\" src=\"https:\/\/enterslice.com\/learning\/wp-content\/uploads\/2019\/10\/TReDS-1024x538.png\" alt=\"TReDS\" class=\"wp-image-25840\" srcset=\"https:\/\/enterslice.com\/learning\/wp-content\/uploads\/2019\/10\/TReDS-1024x538.png 1024w, https:\/\/enterslice.com\/learning\/wp-content\/uploads\/2019\/10\/TReDS-300x158.png 300w, https:\/\/enterslice.com\/learning\/wp-content\/uploads\/2019\/10\/TReDS-768x403.png 768w, https:\/\/enterslice.com\/learning\/wp-content\/uploads\/2019\/10\/TReDS.png 1200w\" sizes=\"(max-width: 1024px) 100vw, 1024px\"\/><figcaption class=\"wp-element-caption\">TReDS Payment System<\/figcaption><\/figure>\n\n\n\n<figure class=\"wp-block-image\"><img decoding=\"async\" loading=\"lazy\" width=\"1024\" height=\"538\" src=\"https:\/\/enterslice.com\/learning\/wp-content\/uploads\/2019\/10\/WALOs-1024x538.png\" alt=\"WLAOs\" class=\"wp-image-25841\" srcset=\"https:\/\/enterslice.com\/learning\/wp-content\/uploads\/2019\/10\/WALOs-1024x538.png 1024w, https:\/\/enterslice.com\/learning\/wp-content\/uploads\/2019\/10\/WALOs-300x158.png 300w, https:\/\/enterslice.com\/learning\/wp-content\/uploads\/2019\/10\/WALOs-768x403.png 768w, https:\/\/enterslice.com\/learning\/wp-content\/uploads\/2019\/10\/WALOs.png 1200w\" sizes=\"(max-width: 1024px) 100vw, 1024px\"\/><figcaption class=\"wp-element-caption\">WLAOs Payment System<\/figcaption><\/figure>\n\n\n\n<p><\/p>\n\n\n\n<div class=\"shadow2\"><strong>Note* <\/strong>for your understanding we are describing above mentioned term &ldquo;<strong>Fit and Proper Criteria<\/strong>&rdquo; below:\n<ol>\n<li>The past record of sound credentials and integrity<\/li>\n<li>Director shall have a record of financial integrity; good reputation and character; honesty<\/li>\n<li>Such person shall not have incurred any of the following disqualifications\n<ol>\n<li>Convicted by a court for any offense involving moral turpitude or any economic offense or any offense under the laws administered by the RBI;<\/li>\n\n<li>Declared insolvent and not discharged;<\/li>\n\n<li>An order, restraining, prohibiting or debarring the person from accessing\/dealing in any financial system, passed by any regulatory authority, and the period specified in the order has not elapsed;<\/li>\n\n<li>Found to be of unsound mind by a court of competent jurisdiction and the finding is in force; and<\/li>\n\n<li>financially not sound.<\/li>\n<\/ol>\n<\/li>\n<li>RBI&rsquo;s decision on whether a person is a fit and proper person shall be final.<\/li>\n<\/ol>\n<\/div>\n\n\n\n<h2 class=\"wp-block-heading\">Authorization\nRequirements<\/h2>\n\n\n\n<p>The\nauthorization will be based on the following factors: <\/p>\n\n\n\n<ol>\n<li>Merits of the Proposal <\/li>\n\n\n\n<li>In respect of additional entities, RBI&rsquo;s assessment of potential<\/li>\n\n\n\n<li>An application shall be made to<\/li>\n<\/ol>\n\n\n\n<p><\/p>\n\n\n\n<figure class=\"wp-block-image\"><img decoding=\"async\" loading=\"lazy\" width=\"875\" height=\"447\" src=\"https:\/\/enterslice.com\/learning\/wp-content\/uploads\/2019\/10\/On-tap-authorisation-application.png\" alt=\"Authorisation requirement\" class=\"wp-image-25842\" srcset=\"https:\/\/enterslice.com\/learning\/wp-content\/uploads\/2019\/10\/On-tap-authorisation-application.png 875w, https:\/\/enterslice.com\/learning\/wp-content\/uploads\/2019\/10\/On-tap-authorisation-application-300x153.png 300w, https:\/\/enterslice.com\/learning\/wp-content\/uploads\/2019\/10\/On-tap-authorisation-application-768x392.png 768w\" sizes=\"(max-width: 875px) 100vw, 875px\"\/><\/figure>\n\n\n\n<h2 class=\"wp-block-heading\">Other Requirements <\/h2>\n\n\n\n<ul>\n<li>The payment system operators should make sure <strong>interoperability among different Retail Payment Systems<\/strong>;<\/li>\n\n\n\n<li>For retail payment systems, the <strong>KYC requirement<\/strong> shall be as per the <a href=\"https:\/\/www.rbi.org.in\/Scripts\/BS_ViewMasDirections.aspx?id=10292\" target=\"_blank\" rel=\"noreferrer noopener\" aria-label=\"KYC master directions (opens in a new tab)\">KYC master directions<\/a> issued by the Department of Banking Regulation (DBR), RBI. <\/li>\n<\/ul>\n\n\n\n<p>The facts, as mentioned above, are based on the press release issued by the RBI on &ldquo;On-tap Authorisation of Payment Systems&rdquo; dated 15<sup>th<\/sup> October 2019. <\/p>\n\n\n<a href=\"https:\/\/enterslice.com\/learning\/wp-content\/uploads\/2019\/10\/On-tap-Authorisation-of-Payment-systems-3.pdf\" class=\"pdfemb-viewer\" style=\"width: 767px; \" data-width=\"767\" data-height=\"max\" data-toolbar=\"bottom\" data-toolbar-fixed=\"on\">On-tap-Authorisation-of-Payment-systems-3<br><\/a>\n<p class=\"wp-block-pdfemb-pdf-embedder-viewer\"><\/p>\n","protected":false},"excerpt":{"rendered":"<p>On 15th October 2019, RBI issued guidelines on &ldquo; On-tap Authorisation of Payment Systems.&rdquo;&nbsp; The main aim behind the introduction of these guidelines is diversification of risk and to encourage innovation and competition. Under this, RBI described minimum net-worth criteria for retail payment systems. Earlier, on 21st January 2019, RBI released a policy paper on [&hellip;]<\/p>\n","protected":false},"author":6,"featured_media":25843,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[1329],"tags":[2788,275,2699],"acf":{"service_id":"73"},"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v14.6.1 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>On tap Authorisation of Payment Systems - RBI Guidelines - Enterslice<\/title>\n<meta name=\"description\" content=\"RBI issued guidelines on &quot;On-tap Authorisation of Payment Systems&quot; whith a view to diversify risk and to encourage innovation and competition.\" \/>\n<meta name=\"robots\" content=\"index, follow\" \/>\n<meta name=\"googlebot\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<meta name=\"bingbot\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/enterslice.com\/learning\/on-tap-authorisation-of-payment-systems\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"On tap Authorisation of Payment Systems - RBI Guidelines - Enterslice\" \/>\n<meta property=\"og:description\" content=\"RBI issued guidelines on &quot;On-tap Authorisation of Payment Systems&quot; whith a view to diversify risk and to encourage innovation and competition.\" \/>\n<meta property=\"og:url\" content=\"https:\/\/enterslice.com\/learning\/on-tap-authorisation-of-payment-systems\/\" \/>\n<meta property=\"og:site_name\" content=\"Enterslice\" \/>\n<meta property=\"article:publisher\" content=\"https:\/\/www.facebook.com\/enterslice\" \/>\n<meta property=\"article:author\" content=\"omvir\" \/>\n<meta property=\"article:published_time\" content=\"2019-10-22T11:01:37+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2023-06-24T15:28:37+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/enterslice.com\/learning\/wp-content\/uploads\/2019\/10\/On-tap-authorisation.jpg\" \/>\n\t<meta property=\"og:image:width\" content=\"1200\" \/>\n\t<meta property=\"og:image:height\" content=\"630\" \/>\n<meta name=\"twitter:card\" content=\"summary\" \/>\n<meta name=\"twitter:creator\" content=\"@enterslice\" \/>\n<meta name=\"twitter:site\" content=\"@enterslice\" \/>\n<!-- \/ Yoast SEO plugin. -->","authorName":"Soniya Khanna","authorImageUrl":"https:\/\/enterslice.com\/learning\/wp-content\/uploads\/2023\/06\/MicrosoftTeams-image-6.jpg","authorDescription":"Soniya Khanna is a legal professional, known for her expertise in Business Law, Information Technology Law and Contract Management. 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