Digital Payments & Payment Systems — Complete Guide for Bank Promotion Exams
Digital Payments and Payment Systems is a high-weightage topic in bank promotion exams at Scale I→II and Scale II→III, tested through questions on RTGS/NEFT/IMPS limits, UPI transaction caps, NPCI products, the Payment and Settlement Systems Act 2007, RBI’s digital lending guidelines, and Payment Aggregator regulations. Key numbers to memorise: RTGS minimum ₹2 lakh, NEFT free and 24×7 (since Jan 2020), IMPS limit ₹5 lakh, UPI general limit ₹1 lakh (capital markets ₹5 lakh), UPI LITE wallet ₹2,000 with per-transaction cap of ₹500, and NPCI was incorporated in December 2008.
Quick Reference — Digital Payments for Bank Promotion Exam
| Regulatory framework | Payment and Settlement Systems (PSS) Act, 2007 — RBI is the designated authority |
| NPCI incorporated | December 2008; under Section 25 of Companies Act (not-for-profit); promoted by RBI + IBA |
| RTGS minimum amount | ₹2 lakh (no upper limit); 24×7 since 14 December 2020 |
| NEFT limits | No minimum, no maximum; 24×7 since 16 December 2019; 48 settlement batches/day; free for customers since 1 January 2020 |
| IMPS limit | ₹5 lakh per transaction; 24×7×365 |
| UPI — general per-transaction limit | ₹1 lakh |
| UPI — enhanced limit (capital markets, IPO, insurance, medical, education) | ₹5 lakh per transaction |
| UPI LITE wallet limit | ₹2,000; per-transaction cap ₹500; offline/near-offline mode |
| UPI 123PAY | UPI for feature phones (non-smartphone); IVR, missed call, sound-based, proximity methods |
| Full KYC PPI (wallet) limit | ₹2 lakh outstanding balance |
| Minimum KYC PPI limit | ₹10,000; 12-month validity; top-up from own bank account only |
| NACH | National Automated Clearing House — bulk, mandate-based; used for salary, EMI, dividends |
| CTS | Cheque Truncation System — 2010 standard; unified grid across India |
| Card tokenisation | Mandatory from 1 October 2022 — no merchant can store card data; token replaces card number |
| PA registration | Payment Aggregators must register with RBI; mandatory from March 2025 for online PAs |
Regulatory Framework — PSS Act 2007 and RBI’s Role
The Payment and Settlement Systems Act, 2007 (PSS Act) is the primary legislation governing payment systems in India. It came into force on 12 August 2008.
PSS Act 2007 — Key Provisions
- RBI as designated authority: The Reserve Bank of India is the designated authority for regulation and supervision of payment systems under the PSS Act. No payment system can be operated in India without RBI authorisation.
- Authorisation requirement (Section 4): Any person operating a payment system in India must obtain authorisation from RBI. Operating without authorisation is a criminal offence.
- System provider: Entity operating a payment system; must have authorisation. NPCI, card networks (Visa, Mastercard, RuPay), SWIFT, payment aggregators, prepaid instrument issuers are all system providers.
- Settlement finality (Section 23): A settlement under a payment system is final and irrevocable — it cannot be reversed, stayed, or set aside by any court or authority (including in insolvency proceedings). Critical protection for systemic stability.
- Netting arrangements: PSS Act validates netting of payment obligations — participants’ net positions are binding even if an individual participant defaults.
- Board for Regulation and Supervision of Payment and Settlement Systems (BPSS): A sub-committee of RBI’s Central Board; policy-making body for payment systems oversight.
NPCI — National Payments Corporation of India
NPCI is the umbrella organisation for retail payment systems in India, set up by RBI and IBA.
| Feature | Details |
|---|---|
| Full form | National Payments Corporation of India |
| Incorporated | December 2008 under Section 25 of the Companies Act (not-for-profit company) |
| Promoted by | Reserve Bank of India and Indian Banks’ Association (IBA) |
| Shareholders | 10 core promoter banks (SBI, PNB, Canara, BoB, Union, BoI, ICICI, HDFC, Citibank, HSBC); later expanded to other banks |
| Headquarters | Mumbai |
| Role | Operates and manages retail payment infrastructure: IMPS, UPI, RuPay, NACH, NETC (FASTag), BHIM, AEPS, BBPS, CTS clearing |
| NPCI International | Subsidiary promoting RuPay and UPI internationally (Bhutan, Nepal, Singapore, UAE, UK, France, etc.) |
RTGS — Real Time Gross Settlement
| Feature | Details |
|---|---|
| Full form | Real Time Gross Settlement |
| Launched in India | March 2004 |
| 24×7 availability | From 14 December 2020 (earlier was business-hours only) |
| Minimum amount | ₹2 lakh (no maximum) |
| Settlement type | Individual transaction-by-transaction (gross); real-time — funds available to beneficiary immediately |
| Operated by | Reserve Bank of India (RBI manages RTGS infrastructure directly) |
| Charges | RBI has made inward RTGS free; outward charges: banks cannot charge more than ₹24.50 + GST for ₹2–5 lakh; ₹49.50 + GST for above ₹5 lakh (RBI prescribed caps) |
| Used for | High-value corporate payments, interbank settlements, large real estate transactions |
| Reversal | If beneficiary account is not found: funds returned within 30 minutes (T+30 min rule) |
RTGS — Exam Traps
- RTGS settlement is gross (one-to-one) and real-time — the two defining features of the name. NEFT is net settlement in batches. IMPS is real-time but operated by NPCI, not RBI.
- RTGS is operated by RBI directly — not by NPCI. This is frequently tested. IMPS, UPI, RuPay are NPCI systems; RTGS and NEFT are RBI systems.
- Minimum is ₹2 lakh — there is no maximum. Large corporates routinely use RTGS for hundreds of crores in a single transaction.
- RTGS became 24×7 from 14 December 2020. Before that it was available only during banking hours (8 AM to 6 PM on weekdays, 8 AM to 2 PM on Saturdays).
NEFT — National Electronic Funds Transfer
| Feature | Details |
|---|---|
| Full form | National Electronic Funds Transfer |
| Launched in India | November 2005 |
| 24×7 availability | From 16 December 2019 (earlier was business-hours, Mon–Sat) |
| Minimum amount | No minimum |
| Maximum amount | No maximum (but high-value transfers typically prefer RTGS) |
| Settlement type | Net settlement in batches — 48 batches per day (every 30 minutes, round the clock) |
| Operated by | Reserve Bank of India (RBI manages NEFT infrastructure) |
| Charges for customers | Free for individuals — RBI directed all banks to not charge customers for online NEFT transactions from 1 January 2020 |
| Settlement lag | Funds credited to beneficiary within the same batch or next batch (up to 30 minutes) |
| Used for | Retail and small business fund transfers; tax payments; EMI payments; trade settlements below ₹2 lakh |
IMPS — Immediate Payment Service
| Feature | Details |
|---|---|
| Full form | Immediate Payment Service |
| Launched | November 2010 (pilot for mobile banking; full launch 2012) |
| Operated by | NPCI |
| Availability | 24×7×365 — always-on, including holidays |
| Transaction limit | ₹5 lakh per transaction |
| Settlement type | Real-time, immediate credit to beneficiary |
| Identifiers | Mobile number + MMID (Mobile Money Identifier); or account number + IFSC |
| MMID | 7-digit Mobile Money Identifier — issued by the bank when customer registers for IMPS; unique to bank account |
| Channels | Mobile banking app, internet banking, ATM, SMS (for basic IMPS) |
| Charges | Banks may charge; RBI has not mandated free IMPS for customers (unlike NEFT) |
UPI — Unified Payments Interface
UPI is India’s most successful payment innovation — a real-time payment system that enables instant money transfers between any two bank accounts using a mobile phone. It is built on IMPS infrastructure and adds a Virtual Payment Address (VPA / UPI ID) layer.
| Feature | Details |
|---|---|
| Launched | April 2016 by NPCI; first live transaction on 11 April 2016 |
| Operated by | NPCI |
| Architecture | Built on IMPS rails; adds UPI ID (Virtual Payment Address) for easy identification |
| General per-transaction limit | ₹1 lakh per transaction |
| Enhanced limit | ₹2 lakh for verified P2PM (peer-to-peer-merchant); ₹5 lakh for capital markets, IPO applications, insurance, medical emergencies, education fees |
| Daily volume (FY2025) | Over 14 billion transactions/month; over ₹20 lakh crore value/month |
| Key apps | BHIM (NPCI’s own app), PhonePe, Google Pay, Paytm, Amazon Pay, bank-specific apps |
| Interoperability | Fully interoperable — any UPI app can send to any UPI ID on any bank |
| UPI AutoPay | Mandate-based recurring payments up to ₹1 lakh per transaction; used for OTT subscriptions, SIP, insurance premiums |
| UPI for NRIs | International mobile numbers of 10 countries linked to NRE/NRO accounts |
UPI Variants — Exam Must-Know
| Variant | Purpose | Key Feature |
|---|---|---|
| UPI LITE | Small-value offline/near-offline payments | On-device wallet; ₹2,000 max balance; ₹500 per transaction; no PIN for small payments |
| UPI LITE X | Fully offline UPI using NFC/Bluetooth | Works without internet; NFC tap-to-pay; ₹500 per transaction |
| UPI 123PAY | UPI for feature phones (non-smartphone) | 4 modes: IVR call, missed call, app on feature phone, proximity (sound-based); no internet required |
| UPI One World | UPI for foreign visitors to India | Prepaid wallet linked to UPI; no Indian bank account required; available at airports |
| Hello! UPI | Conversational UPI payments | AI-powered voice payments in multiple Indian languages; initiated by “Hello UPI” command |
| Credit Line on UPI | Pre-sanctioned credit from banks disbursed via UPI | RBI permitted Jan 2023; bank’s pre-approved credit line used like UPI; interest applies |
UPI — Exam Traps
- UPI general limit is ₹1 lakh per transaction, NOT ₹2 lakh or ₹5 lakh. The enhanced ₹5 lakh is only for specific categories (capital markets, IPO, insurance, medical, education).
- UPI LITE wallet maximum is ₹2,000 and per-transaction cap is ₹500 — these are small numbers; don’t confuse with the main UPI limit.
- UPI is built on IMPS rails — it is not a separate settlement system but a layer on top of IMPS. This means UPI funds settle through the same IMPS infrastructure (24×7).
- UPI is operated by NPCI — not RBI. RBI regulates but NPCI operates. RTGS and NEFT are operated by RBI directly.
- The MDR (Merchant Discount Rate) on UPI transactions for merchants has been zero since January 2020 (for UPI transactions up to ₹2,000; and effectively zero for all UPI P2M transactions per GOI policy). Banks are compensated through a government incentive scheme.
NACH — National Automated Clearing House
NACH is a centralised electronic bulk payment system operated by NPCI, replacing the earlier ECS (Electronic Clearing Service) system of RBI from 2016.
NACH — Key Features
- Purpose: Bulk mandate-based credit and debit transactions — ideal for recurring payments across many beneficiaries simultaneously.
- NACH Credit: Used for bulk disbursements — salary credits, dividend payments, pension credits, subsidy transfers, interest payments.
- NACH Debit: Used for recurring collections — EMI deductions, insurance premiums, utility bills, SIP instalments, loan repayments. Requires customer’s mandate (e-NACH or physical).
- e-NACH mandate: Digital mandate registration using Aadhaar OTP or internet banking authentication — paperless, fast, and secure.
- API-based NACH: Banks can integrate NACH via APIs for automated mandate management.
- National Electronic Toll Collection (NETC) / FASTag: NPCI operates the FASTag ecosystem for electronic toll collection on national highways — linked to a bank account or prepaid wallet; mandatory for all 4-wheelers since February 2021.
CTS — Cheque Truncation System
CTS eliminated the physical movement of paper cheques between banks — instead, an electronic image of the cheque is transmitted for clearing.
CTS — Key Facts
- CTS 2010 standard: Uniform cheque format introduced across all banks — standard dimensions, security features (void pantograph, UV-reactive logo), MICR band, pre-printed fields. All banks must use CTS 2010 cheques.
- Unified grid: India moved from three regional CTS grids (North: New Delhi; South: Chennai; West/East: Mumbai) to a single unified CTS grid covering the entire country from September 2021.
- Clearing cycle: Cheques presented by 2 PM on a business day are cleared and credited by the next business day (T+1 clearing). High-value cheques (₹2 lakh+) can be on a T+0 clearing cycle at many banks.
- Positive Pay System (PPS): For cheques of ₹50,000 and above, RBI mandated Positive Pay confirmation (issuer re-confirms cheque details — amount, date, payee — via net/mobile banking or SMS) from January 2021. Mandatory for ₹5 lakh and above at most banks.
- CTS vs NEFT: CTS is for paper cheques; NEFT is for electronic fund transfers. A cheque clearance goes through CTS; an online transfer goes through NEFT/RTGS/IMPS/UPI.
Prepaid Payment Instruments (PPIs) — Wallets
PPIs are payment instruments that facilitate purchase of goods/services, funds transfer, and financial services against the value stored. Governed by RBI’s PPI Master Directions.
| PPI Type | KYC Requirement | Loading Limit | Outstanding Balance | Cash Withdrawal |
|---|---|---|---|---|
| Small PPI (Minimum KYC) | Mobile number + self-declaration; OTP verified | Up to ₹10,000/month | ₹10,000 at any time | Not permitted |
| Full KYC PPI | Complete KYC (Aadhaar + PAN or equivalent) | Up to ₹1 lakh/month (from bank/card) | ₹2 lakh at any time | Permitted (for open-system PPIs) |
| Gift PPI | No KYC | Up to ₹10,000 (one-time) | ₹10,000 | Not permitted; non-reloadable |
PPI — Exam Traps
- Full KYC PPI outstanding balance limit is ₹2 lakh — this is the same as the PMJDY account OD limit. Don’t confuse; PMJDY OD is ₹10,000.
- Interoperability: Full KYC PPIs are interoperable with UPI and bank accounts — a Paytm wallet (Full KYC) can send/receive from any UPI ID.
- Minimum KYC PPIs cannot be topped up from another PPI — only from a bank account (to prevent money mule chains).
- The 12-month validity for minimum KYC PPIs means if the PPI is not upgraded to Full KYC within 12 months, it becomes inactive for loading (but existing balance can be used).
RuPay — India’s Domestic Card Network
RuPay — Key Facts for Exam
- Launched: March 2012 by NPCI — India’s domestic card payment network, an alternative to Visa and Mastercard.
- Purpose: Reduce dependence on foreign card networks; lower interchange fees; cover Jan Dhan and kisan credit card segments.
- PMJDY RuPay cards: All PMJDY account holders receive a free RuPay debit card; includes ₹2 lakh accident insurance (for accounts opened after Aug 2018).
- RuPay Credit Card on UPI: From July 2022, RuPay credit cards can be linked to UPI for payments — first credit card network allowed on UPI.
- International acceptance: NPCI International has expanded RuPay to Bhutan, Nepal, Singapore, UAE, UK, France, Mauritius, and several other countries. Accepted at select international terminals.
- RuPay vs Visa/MC: RuPay interchange fees are lower — beneficial for small merchants. All data stays within India (data localisation compliance). Supervised by RBI/NPCI.
Card Tokenisation — Mandatory from October 2022
RBI mandated that from 1 October 2022, no entity in the card payment chain — merchants, payment aggregators, payment gateways — can store actual card data (card number, CVV, expiry). Cards must be tokenised.
What Is Tokenisation?
- A card token is a unique identifier that replaces the card number for a specific merchant and device combination.
- The actual card number is stored only by the card network (Visa, Mastercard, RuPay) or card-issuing bank. The merchant receives and stores only the token.
- Even if the merchant’s database is breached, the thief cannot use the token to make fraudulent transactions — the token is useless at another merchant or without the registered device.
- Token requestor: The entity (app, merchant) that requests the token on behalf of the customer. Token provisioning happens at the device and card level.
- Impact on customers: Slightly slower checkout for first-time token creation; subsequent transactions are seamless.
BBPS — Bharat Bill Payment System
BBPS is a centralised, interoperable bill payment platform operated by NPCI. It standardises bill collection across categories:
- Utility bills (electricity, water, gas, telecom), insurance premium, FASTag recharge, education fees, municipal taxes, credit card bills, loan EMIs, housing society maintenance, subscription fees
- Customers can pay bills through any BBPS channel (bank branches, ATMs, BCs, online banking, UPI apps) — regardless of which bank or biller
- Instant confirmation and receipt for every transaction — all billers get standardised settlement
- BBPS agents: Banks, BCs, non-bank entities can be BBPS Operating Units (OUs) after RBI authorisation
AePS — Aadhaar-Enabled Payment System
AePS allows bank customers to perform financial transactions using only their Aadhaar number and biometric (fingerprint/iris) — no debit card, PIN, or smartphone needed:
- Services: Cash deposit, cash withdrawal, balance enquiry, Aadhaar-to-Aadhaar fund transfer, mini statement
- Used by BCs in rural areas with a micro-ATM device — critical for last-mile financial inclusion delivery
- Interoperable: Any bank’s AePS transaction can be conducted at any bank’s BC
- Security concerns: RBI has issued warnings about AePS fraud (cloned fingerprints); banks must implement additional safeguards
RBI Digital Lending Guidelines — 2022 (Updated 2024)
RBI issued comprehensive Digital Lending Guidelines in September 2022, with further updates, to regulate the rapidly growing digital lending ecosystem:
Digital Lending — Key RBI Guidelines
- LSP (Lending Service Provider): Third-party service providers (fintech companies, apps) that perform one or more lending functions — customer acquisition, credit assessment, loan servicing, collection — on behalf of a Regulated Entity (RE). LSPs must be registered with REs.
- DLA (Digital Lending App): A mobile/web application operated by REs or LSPs for digital lending. REs are responsible for LSPs’ DLAs.
- No pass-through allowed: All loan disbursals must go directly to the borrower’s bank account — not through the LSP’s account. All repayments must come from the borrower’s bank account. This prevents LSPs from handling customer funds.
- KLE (Key Fact Statement): Lender must provide a standardised Key Fact Statement to borrowers before loan sanction — includes APR (Annual Percentage Rate), all charges, cooling-off period details.
- Cooling-off period: Borrower can exit the loan within the cooling-off period (minimum 3 days for loans up to 7-day tenor; minimum 7 days for longer-tenor loans) by paying only the principal + pro-rata APR — no prepayment penalty.
- Data collection: Apps can only collect data that is necessary for lending; no access to phone contacts, media, or other personal data without explicit consent.
- Recovery agents: Digital lenders must follow RBI’s Fair Practices Code for recovery — no harassment; recovery only during specified hours.
Payment Aggregator (PA) and Payment Gateway (PG) Framework
RBI issued comprehensive guidelines for Payment Aggregators in March 2020 (updated 2024):
| Feature | Payment Aggregator (PA) | Payment Gateway (PG) |
|---|---|---|
| Function | Facilitates merchants in accepting payments from customers; collects funds and settles to merchants | Provides the technology interface between merchant’s website and the payment network; does not handle funds |
| Fund handling | Yes — receives funds from customers, holds in nodal/escrow account, settles to merchants | No — only routes payment instructions |
| RBI authorisation required? | Yes — mandatory registration with RBI; deadline March 2025 for online PAs | No — PGs do not handle funds; RBI guidance applies but no formal authorisation |
| Net worth requirement | Existing PAs: ₹25 crore by March 2023; new applications: ₹25 crore at time of application | N/A (no fund handling) |
| Escrow account | Mandatory — customer funds must be held in an escrow account with a scheduled commercial bank; not co-mingled with PA’s own funds | N/A |
| Examples | Razorpay, PayU, CCAvenue, Cashfree, Instamojo | The technical routing layer that PAs and banks use internally |
NEFT vs RTGS vs IMPS vs UPI — Master Comparison
| Feature | RTGS | NEFT | IMPS | UPI |
|---|---|---|---|---|
| Full form | Real Time Gross Settlement | National Electronic Funds Transfer | Immediate Payment Service | Unified Payments Interface |
| Operated by | RBI | RBI | NPCI | NPCI |
| Launched | 2004 | 2005 | 2010 | 2016 |
| Minimum | ₹2 lakh | No minimum | No minimum | No minimum (Re. 1) |
| Maximum | No maximum | No maximum | ₹5 lakh | ₹1 lakh (general); ₹5 lakh (specific) |
| Settlement | Real-time, gross (individual) | Batch (every 30 min); net settlement | Real-time, immediate | Real-time (on IMPS rails) |
| Availability | 24×7 (from Dec 2020) | 24×7 (from Dec 2019) | 24×7×365 | 24×7×365 |
| Customer charges | Capped by RBI; outward charges apply | Free for customers (from Jan 2020) | Banks may charge | Free (MDR = 0 on UPI P2M) |
| Primary use | High-value (₹2L+) corporate/interbank | Retail transfers; tax payments | Mobile-based instant retail transfers | Everyday retail P2P and P2M |
| Identifier | Account no + IFSC | Account no + IFSC | Mobile + MMID or Account + IFSC | UPI ID / VPA or Mobile + bank |
Digital Payments — Top Exam Traps
- RTGS and NEFT are operated by RBI; IMPS, UPI, RuPay, NACH, BBPS, AePS, FASTag (NETC) are operated by NPCI. This is the most commonly confused fact.
- NEFT is free for customers for online transactions (from 1 January 2020). RTGS is not free — banks charge customers for outward RTGS (within RBI’s prescribed cap).
- NEFT settlement is in batches (every 30 minutes, 48 batches/day) — not real-time. RTGS, IMPS, and UPI are real-time.
- UPI limit for capital markets/IPO is ₹5 lakh — this was increased to enable UPI as the primary application mechanism for IPOs. Many students remember the old ₹2 lakh limit; the current limit is ₹5 lakh for these categories.
- Card tokenisation is mandatory from 1 October 2022 — merchants cannot store card data. Customers may need to re-save (tokenise) cards on merchant websites.
- FASTag is operated by NPCI under NETC (National Electronic Toll Collection) — not by NHAI, though NHAI mandates FASTag use. The payment infrastructure is NPCI’s.
Digital Payments — India’s Journey and Key Milestones
| Year | Milestone |
|---|---|
| 2004 | RTGS launched |
| 2005 | NEFT launched |
| 2007 | PSS Act enacted; RBI becomes designated authority |
| 2008 | NPCI incorporated; CTS launched in pilot |
| 2010 | IMPS launched by NPCI (November) |
| 2012 | RuPay launched; CTS 2010 standard rolled out nationally |
| 2014 | PMJDY — mass bank account opening; RuPay cards for all Jan Dhan accounts |
| 2016 | UPI launched (April); NACH replaced ECS; demonetisation (November) — digital payments surge |
| 2019 | NEFT made 24×7 (December); RBI mandated free NEFT from Jan 2020 |
| 2020 | RTGS made 24×7 (December); FASTag mandatory (February 2021 announced); COVID accelerated digital adoption |
| 2021 | NACH replaces all ECS mandates; FASTag mandatory for all 4-wheelers; Positive Pay System for cheques |
| 2022 | Card tokenisation mandatory (October); RBI Digital Lending Guidelines (September); UPI LITE launched; RuPay Credit Card on UPI (July) |
| 2023 | Credit Line on UPI permitted (January); UPI 123PAY expanded; Hello! UPI voice payments; UPI transactions cross 10 billion/month |
| 2024 | PA-Cross Border guidelines; updated Digital Lending norms; UPI transactions cross 14 billion/month |
What is the minimum amount for RTGS transfer?
The minimum amount for an RTGS (Real Time Gross Settlement) transfer is ₹2 lakh. There is no upper limit on RTGS transactions. RTGS is operated by the Reserve Bank of India and became available 24×7 from 14 December 2020. It provides real-time, gross (individual transaction-by-transaction) settlement — funds are credited to the beneficiary’s account immediately upon processing. RTGS is used for high-value transfers; transactions below ₹2 lakh should use NEFT, IMPS, or UPI.
What are the charges for NEFT transactions?
NEFT (National Electronic Funds Transfer) transactions are free of charge for individual customers at all banks for online transactions (mobile banking and internet banking). RBI directed all banks to waive NEFT charges for customers effective 1 January 2020. NEFT has been available 24×7 since 16 December 2019 and processes transactions in 48 settlement batches per day (every 30 minutes). There is no minimum or maximum transaction limit for NEFT.
What is the UPI transaction limit per day?
The general UPI per-transaction limit is ₹1 lakh. For specific categories, the limit is higher: ₹2 lakh for P2PM (peer-to-peer-merchant) transactions at verified merchants, and ₹5 lakh per transaction for capital market investments, IPO applications, insurance premium payments, medical emergencies, and education fee payments. UPI LITE, which operates as an on-device wallet for small offline payments, has a wallet balance cap of ₹2,000 and a per-transaction limit of ₹500. Individual banks may set lower daily limits within these NPCI-prescribed caps.
What is the difference between RTGS, NEFT, IMPS, and UPI?
RTGS (operated by RBI) is for high-value transfers of ₹2 lakh and above with real-time gross settlement. NEFT (operated by RBI) has no minimum or maximum, settles in batches every 30 minutes, is free for customers, and is available 24×7. IMPS (operated by NPCI) has a ₹5 lakh per transaction limit, provides immediate real-time credit, and is available 24×7×365 including holidays. UPI (operated by NPCI) has a ₹1 lakh general limit (₹5 lakh for specific categories), provides instant settlement, is free for P2M transactions, and is accessed via mobile apps using a Virtual Payment Address (UPI ID).
What is NPCI and what payment systems does it operate?
NPCI (National Payments Corporation of India) is a not-for-profit company incorporated in December 2008, promoted by RBI and IBA, to operate retail payment infrastructure in India. NPCI operates: IMPS (Immediate Payment Service), UPI (Unified Payments Interface), RuPay card network, NACH (National Automated Clearing House), NETC/FASTag (National Electronic Toll Collection), BBPS (Bharat Bill Payment System), AePS (Aadhaar-enabled Payment System), BHIM app, and CTS cheque clearing. RTGS and NEFT are operated by RBI directly, not by NPCI.
What is card tokenisation in India?
Card tokenisation replaces a customer’s actual card number (PAN) with a unique token for each merchant-device combination. RBI made tokenisation mandatory from 1 October 2022 — no merchant, payment aggregator, or payment gateway can store actual card data after this date. When a customer saves a card on a merchant’s website or app, the merchant receives and stores only the token, not the real card number. This prevents large-scale card data breaches — even if a merchant’s database is compromised, the tokens stored there cannot be used for fraudulent transactions at other merchants.