File No.21(8)/2016-Comp

F.No.21(8)/2016-CompCellGovernment of India

Ministry of Consumer Affairs, Food and Public DistributionDepartment of Food and Public Distribution

**********

Krishi Bhawan, New DelhiDated: 09/07/2018

To

Principal Secretary/Secretary,Food & Civil Supplies Department,All States/UTs.

Subject:- Guideline for implementing Digital Payment facility at Fair Price Shops-reg.

Sir/rv1adam,

I am directed to say that in line with Govt.'s decision to promote the decision topromote the use of less-cash/digital payment mechanisms for day to day financialtransaction, this Department has started implementation of digital payment mechanisms inthe Public Distribution System. This Department in collaboration with all States/UTs hasstarted the implementation of less-cash/digital payment mechanisms in the PDS. In thisconnection, a meeting was held on 30th May, 2018 under the Chairmanship of Secretary(F&PD) and participating States shared their issues/challenges to implement the less­cash/digital transaction facilities at Fair Price Shops. Considering the issues/challenges, aguidelines for the implementing digital transaction facilities at FPSs has been prepared andthe comments/views of MeitYis also incorporated in the guidelines.

2. A copy of the guidelines for implementation of digital payment facilities at FPSs isattached herewith for kind information and further necessary action, please.

Yours faithfully,

End: As above.

(B.K. Hembrom)Under Secretary to the Govt. of India

Tele: 011-23383942

Copy to:-Secretary Ministry of Electronics & Information Technology (MeitY),Electronics Niketan, 6, CGOComplex, New Delhi.

Guidelines for implementing Digital PaymentFacility at Fair Price Shops

1. Background:

In line with the Govt.'s decision to promote the use of less-cash/digital payment mechanisms for day-to­

day financial transactions, this Department has started the implementation of digital payment

mechanisms in the Public Distribution System as well as procurement in collaboration with theStates/UTs.

Further, in line with ongoing initiative to introduce Digital Payments, DoFPD is working actively towards

rolling out the prescribed 5 modes of Cashless Payments i.e. Aadhaar enabled Payment System (AePS),

Unified Payments Interface (UPI), Unstructured Supplementary Service Data (USSD), e-Wallets and

Bank Cards of Cashless Payments for the distribution of foodgrains in FPSsacross the country but In line

with the objectives of the 'End to End TPDS Computerization' Scheme, AePS has been considered as the

most preferred mode of digital payments at FPSs in automated FPSs which also doesn't incur anytransaction charges.

Currently, total 3,18,000 FPSsout of 5.23 lakh have been automated in 27 States/UTs coveringtotal 18.35 crore ration cards out total 24 crore ration cards. Considering the current pace of FPS

automation, few more States will complete FPSAutomation and approximate total 22 crore ration cards

may be covered in the near future. It is important to mention that West Bengal State issues Ration Card

to the individual beneficiary and currently, total 6.01 crore ration cards exist in the state.

2. Mode of Digital Payments

Depending on the status of FPS Automation and completion of Aadhaar seeding in ration carddatabase, the States/UT Governments can choose to adopt one or more of the following 6 modes for

cashless transactions: BHIM Application, Aadhaar Enabled Payment System (AePS)/BHIM Aadhaaar,

Card Based Payment, Unstructured Supplementary Service Data (USSD), Unified Payment Interface (UPI)

and e-Wallet.

2.1. FPSswith existing PaS/Mobile/Desktop Devices: In all, ~3.16 Lakh Fair Price Shops have

already been automated out of a total of 5.27 Lakh FPSs in the country. Such automated FPSs

can easily make a transition to the cashless mode of transactions choosing any of the 6 modes.

However, in line with the objectives of the 'End to End TPDS Computerization' Scheme, AadhaarEnabled Payment System (AePS) or BHIM Aadhaar Pay is the most preferred mode for cashless

transactions in automated FPSs.

2.1.1. Aadhaar enabled Payment System (AePS) or BHIM Aadhaar Pay : AePS allows

bank-to-bank cashless transactions through PoS devices using the Aadhaar

authentication. The transition to AePS can be done easily through the necessary software

upgrades without the need for any additional hardware. Furthermore, AePS transactionscan be done in a user-friendly and secure manner without involving any transaction

charges. FCSDept. to take following steps to enable AePS facility at FPS

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~.""''''''"8Issuer Approval \ll IssuerCBS SWitch

Multilateral Switch

e.~t'5 e« c..t8 Update

Acquirer q;Response AcquirerSWitch::: CBS

f111 i1

~§ "S~o"c 1§ '(j; ~ "F

~~ ~t ~tV 0 c ~ >.r.n - :3 :3 :'0C C (J) ro c,

~ ~ ~lTr Responsewith receipt---+

UIDAI

Cashless ePDS __. NIC

serverTransaction

Beneficiary Goods

MicroATM

l@Cash PDSTransaction

Preparatory work

Beneficiary:• Beneficiary availing foodgrains must have an Aadhaar number and

BankAccount, both of which should be linked to each other• Beneficiary's Aadhaar Number must be seeded in ration card

databaseState FCSDept.

• ePoS/Mobile Tablet! Desktop Computer and Aadhaarauthentication facility should be available at FPS

• Organize a meeting with LeadBankManager, NIC,ePoSVendor todiscussrequirement of providing cashlessfacility at FPSs.

• Vendor is already having software ready and only integration withAcquiring bank is required for enabling AePScashlessfacility inePoSdevice

• Identify Acquiring bank for providing cashlessfacility at FPSs• Signagreement with Banksand FPSdealer for enabling cashless

facility.• Facilitate capacity building activity of dealers on cashlessoperationsBanks• Identifying the FPSdealers to open current account in acquiring

Banks

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Steps for makingcashless transactionsthrough ePoS device

Bankshould share mapped details, masters info with NICconsisting of(a) Bank List(b)AePSError Codes(c)Dealer Details(d)https certificate

• Coordinate with PoSvendors to upgrade/installed desired softwarepatches in the ePoSdevices

• Ensureun-interrupted service in ON-USand OFF-UStransactionsand assist FCSDepartment in settlements and reconciliation.

NIC

• Mapping beneficiaries' aadhaar number with active bank accountnumber.

• Mapping of the dealers' BankAccount details as shared by Bank.• Ensureavailability of AUA/ASAservices for Aadhaar basedCashless

payment• Settlement and reconciliation of cashlesstransactions in

coordination with banksand device vendors• Facilitating device to download all Master Data.

System Integrator/ PoS Vendor

• Customization of ePoSapplication as per the bank directions andup-gradation of patches in all ePoSdevices

• Monitor ePoSand cashlesstransactions with support of field levelstaff

• Providing required training and addressing technical issues.

Step i. Beneficiary approaches FPSfor purchasing foodgrainsStep ii. Beneficiary opt cashlessoption for paymentStep iii. Beneficiary provides ration card numberStep iv. FPSdealer enters ration card number in PoSdeviceStep v. PoSdevice fetches ration card details from PDSServerStep vi. FPSdealer selects appropriate member 10and asked

beneficiary for Aadhaar authenticationStep vii. PDSSystemallocates unique reference number for future

reconciliationStep viii. PDSServer sendsAadhaar number and Biometric details to

Acquirer bank along with amount to be deductedStep ix. Acquirer bank sendsAadhaar number, biometric details and

amount to NPCIswitchStep x.NPCISwitch communicates Aadhaar number and biometric to

UIDAIServer for authenticationStep xi. On successfulauthentication, UIDAIserver sendsconfirmation

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to NPCI System

Step xii. NPCI System further finds beneficiary's bank name linked with

Aadhaar number (in Aadhaar Payment Bridge System) and

contact respective issuer bank for payment processing

Step xiii. Issuer bank receives Aadhaar number and amount ( to be

debited)Step xiv. Issuer bank approve transaction, debits amount from

beneficiary's account and sends confirmation to NPCI System

Step xv. NPCI System further communicates status (success/fail) of

payment to Acquirer Switch

Step xvi. Acquirer Switch forwards financial transaction details to Core

Banking systemStep xvii.Acquirer bank credits matching amount into FPSdealer's bank

account.Step xviii. Acquirer bank sends transaction details to Acquirer Switch

Step xix. Acquirer Switch communicates transaction details to PDS

ServerStep xx. PDSServer updates payment details against unique reference

ID

Step xxi. PDSServer sends unique reference number and payment Id to

Acquirer Switch for ensuring consistency and reconciliation

purposeStep xxii.PDS Server finally shows successful payment message on ePoS

deviceStep xxiii. Foodgrain will be issued after successful cashless

payment by beneficiary.

Other Services

If FPSdealer has been appointed as Banking Correspondent then

following operations for beneficiaries would also be possible through

AePS

• Balance Enquiry

• Cash Withdrawal

• Cash Deposit

• Aadhaar to Aadhaar Funds Transfer

• Mini Statement

• Available at NPCIWebsite (http://www.npci.org.in/) in Products

and Services» Aadhaar Enabled Payment System (AEPS) sectionFurther Details

2.1.2. ATM/ Credit Cards: As an interim measure and till such time the Aadhaar Seeding iscompleted in all States/UTs, States/UT Governments can allow other modes i.e. Bharat QR Code,

ATM/Credit Card Reader Devices, USSD, UPI and e-Wallets so that beneficiaries can takeadvantage of cashless payment facility at FPSs. In case of automated FPSs with low Aadhaar

51

Seeding, the Card Reader Devices is an alternative option since the cashless payments can bedone through the already installed PoS/Mobile/Desktop devices provided they have an in-builtCard Reader System (MicroATM) or an external card reader along with a Pin Entry Device (PED)capable of reading both the magnetic and chip cards. Banking cards offer beneficiaries moresecurity, convenience, and control than any other payment method. The wide variety of cardsavailable - including credit, debit and prepaid - offers enormous flexibility, as well. These cardsprovide 2 factor authentication for secure payments e.g secure PIN and OTP. RuPay, Visa,MasterCard are some of the example of card payment systems. Various innovative options suchas registering FPSsas BusinessCorrespondents with Banksor Common ServiceCentres (CSCs)canbe considered for funding the hardware and software upgradation costs and ensuring thefinancial feasibility of FPSdealers.

State FCSDept.

• ePoS/Mobile Tablet/ Desktop Computer facility should be availableat FPS

• FCSDept. to contact Banks/CSCsfor providing banking facility atFPS.

• MicroATM PoSDevice -. Physical PoScan be a MicroATM devicewhich has an in-built card reader or a PoSmachine integrated with

Pre-Requisites an external card reader device and Pin Entry Device (PED).• Mobile Tablet without integrated card reader: Mobile Tablet PoS

device - with an external card reader device and Pin Entry Device(PED)connected through cable / Bluetooth

Banks

• Banksto provide software for PoSdevice to carry out cashlesstransactions

• Banksto integrate their CBSsystem with PDSServer in consultationwith system Integrator (ePoSdevice supplier) and State NICTeam

• Beneficiary must have a prepaid/postpaid Debit/Credit/RuPay card

• In caseof PhysicalPoS,machine must have a card readerSteps for registration

In case of Mobile PoS, a mobile PoS device pluggable into a•mobile/tablet is needed

Physical PoS

• Swipe a debit/credit/RuPay card on the PoSmachine

• Enter amount to be paid and PIN

• Generate ReceiptSteps for purchase offood grains

Mobile Tablet PoS

• Plug in the external card reader into mobile tablet PoSdevice

• Launchthe application

• Swipe the beneficiaries' card

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• Enter amount to be paid and PIN

• Generate Receipt

• http://cashlessindia.gov.in/banking_cards.htmlFurther Details

• Banks'websites

2.2. Non Automated FPSs:States/UT Governments can opt for any of the other 3 modes i.e. BharatQRCode, Unstructured Supplementary Service Data (USSD),Unified Payment Interface (UPI) and E­wallets for enabling cashlesstransactions in non-automated FPSs.

2.2.1. BHIM Mobile Application [Unified Payment Interface (UPI)]: Bharat Interface for Money(BHIM) is a mobile app for easy and quick payment transactions using Unified Payments Interface(UPI). Beneficiary can make instant bank-to-bank payments and pay money using Mobile number,Bank a/c and IFSCcode, Aadhaar number or Virtual Payment Address (VPA). BHIM has the facility toscan'& pay through QRcode. User can check transaction history and can also raise complaint for thedeclined transactions by clicking on Report issue in transactions. BHIM is available in 8 regionallanguages (Tamil, Telugu, Bengali, Malayalam, Oriya, Gujarati, Kannada, and Hindi) for better userexperience.

Pre-Requisites

Steps for registration

Stepsfor purchase offood grains

Beneficiary and FPSDealer:• They must have an account in a bank• They must have a smart mobile phone ( preferred)

Beneficiaries/FPS dealers can install and link their bank account usingfollowing steps:

Step 1: Download and Install BHIM app from Google Play store/AppleApp Store.

Step 2: Select preferred language.Step 3: Select SIM card which has the mobile number registered with

beneficiaries' / FPSdealers' respective bank.Step 4: Set the application passcoderequired to enter the app.Step 5: Link bank accounts using bank account option.Step 6: Set UPI PIN by providing last 6 digits of debit card and expiry

date of debit card.

Step 1: Beneficiary to open BHIM application on mobile phone.Step 2: Click on send icon and enter UPI ID or Aadhaar number of FPS

Dealer.Step 3: Enter the UPIPinset earlier to authenticate the transaction.Step 4: Checktransaction history to see the status of the transaction.

Other Services Beneficiary can also Scan & Pay the QR code of FPSDealer to make

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payment ( covered in next section)

• Available at NPCIWebsite (http://www.npci.org.in/) in Products andFurther Details Services» https://www.npci.org.in/product-overview/bhim-product-

overview

2.2.2. Bharat QR Code : Bharat QR code is an interoperable payment acceptance solution thatsupports Visa, MasterCard. Amex and RuPaycards & BHIM-UPI for wider acceptance. Bharat QRcode will enable rapid rollout of digital payments acceptance infrastructure throughout thecountry, as it does not involve any upfront investment in Point of Sale (PoS)machine. To facilitatemassive rollout in a short span of time, Bharat QRcode based payment solution is introduced withfollowing advantages:

a. Bharat QRcode does not require any upfront expenditure.b. Bharat QRcode is a single unified QRcode capable of accepting payments from

Visa, MasterCard, RuPayCardsfor wider acceptance.c. Customer can easily make payments through Bharat QR code and does not

require to carry physical Debit or Credit card.d. The risk of data theft or security issues through tampered or cyber­

compromised point of sale devices is minimised.e. Bharat QR code supports dynamic QR codes, which may be printed on ration

card to make payments to the respective vendors.f. Merchants (FPS Dealer) accepting the payment through Bharat QR code,

receives the amount directly in their Bankaccounts.

Pre-Requisites

Stepsfor registration

Beneficiary and FPSDealer:• They must havean account in a bank• They must have a smart mobile phone

Beneficiaries/FPS dealers can install and link their bank account usingfollowing steps:

Step 1: Download and Install BHIM app from Google Play store/AppleApp Store.

Step 2: Select preferred language.Step 3: Select SIM card which has the mobile number registered with

beneficiaries' / FPSdealers' respective bank.Step 4: Set the application passcoderequired to enter the app.Step 5: Link bank accounts using bank account option.Step 6: Set UPI PIN by providing last 6 digits of debit card and expiry

date of debit card.Additional steps for FPSDealer:

Step 1: FPSdealer to open BHIM application and select 'I am AMerchant' option available in menu item ( upper right corner ofBHIM application)

81

Step 2: Fill merchant details i.e. Business Name, Merchant Category

(Govt. Services), Address, Bank Account Number, State and PinCode

Step 3: Submit Merchant Details by clicking Proceed button

Step 4: Click Profile Option and download QR Code

Step 5: Print QR Code and place/paste at counter

Step 1: Beneficiary to open BHIM application on mobile phone.

Step 2: Beneficiary click Scan & Pay option on BHIM applicationSteps for purchase of Step 3:Beneficiary scanQRcode of FPSDealer through BHIM applicationfood grains to make payment.

Step 3: Enter the UPIPinset earlier to authenticate the transaction.Step 4: Checktransaction history to see the status of the transaction.

Other Services Beneficiary can also make the payments for grocery items or otheritems available at FPS.

• Available at NPCIWebsite (http://www.npci.org.in/) in Products andFurther Details Services» https://www.npci.org.in/product-overview/bhim-product-

overview

2.2.3. Unstructured Supplementary Service Data (USSD): This service can work without internetusing SMSmode across all kinds of mobile handsets. It is available round the clock through acommon code *99# across all Telecom Service Providers. The applicable transaction chargesare Rs1.5/SMS.

• Beneficiary must have an account in a bankPre-Requisites• Beneficiary must have a mobile phone

• Beneficiary visits branch to link mobile number and bank account. Thiscan be done at ATM or online also

Steps for registrationBeneficiary gets Mobile Money Identifier (MMID) and Mobile PIN•(MPIN) upon registration

Fund Transfer using Mobile Number and MMID

• Beneficiary dials *99# from phone

• Beneficiary enters his/her 3 Letters of Bank's short name or first 4letters of Bank's IFSC

• Beneficiary enters the option for funds transferSteps for purchase of

• Beneficiary enters Mobile Number, MMID and amount provided byfood grainsFPSdealer

• Beneficiary to enter MPINand last 4 digits of account number(optional)

• Transfer of the funds completedFund Transfer using Account Number and IFSC

91

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• Beneficiary dials *99# from phone

• Beneficiary enters his/her 3 Letters of Bank's short name or first 4letters of Bank's IFSC

• Beneficiary enters the option for funds transfer

• Beneficiary enters Account Number, IFSCodeand Amount

• Beneficiary enters MPIN and last 4 digits of account number (Optional).. Transfer of the funds completedFund Transfer using Aadhar Number

• Beneficiary dials *99# from phone

• Beneficiary enters his/her 3 Letters of Bank's short name or first 4letters of Bank's IFSC

• Beneficiary enters the option for funds transfer

• Beneficiary enters Aadhaar Number

• Beneficiary enters MPIN and last 4 digits of account number (Optional)

• Transfer of the funds completedNon-Financial Transaction

• BalanceEnquiry

• Mini Statement

• Know MMID* (Mobile Money Identifier)Other Services • Generate MPIN

• ChangeMPIN

• Generate OTPValue Added Services

• QSAM(Query Serviceon Aadhaar Mapper) or *99*99#

• Available at NPCIWebsite (http://www.npci.org.in/) in Products andFurther Details

Services» *99#

2.2.4. e-Wallet: e- Wallets are the electronic pre-paid payment system which can be used inpurchasing foodgrains on-line with a computer or a smartphone. A beneficiary's account isrequired to be linked to the digital wallet to load money in it. Most banks and some privatecompanies have their e-wallets

3. Incentive Schemes of MeitY to promote digital transactions

Govt. of India has time-to-time brought various incentive schemes to achieve the target of 2,500 crore

digital transactions and promote Digital Payment options among beneficiaries/merchants. To promote

digital payments Meity has launched several initiatives including monetary incentive schemes as below:

3.1. BHIM Aadhaar Merchant Scheme

Government of India has launched BHIM Aadhaar Pay for enabling Aadhaar based biometric

transactions at merchant locations. Considering the new developments in the ecosystem, it has been

decided to incentivize, Aadhaar based biometric transactions at merchant locations (FPS Dealers). The

operation of this scheme has been extended till 31st March 2019. The scheme will be applicable forfollowing types of Aadhaar based biometric transactions at FPSs(purely merchant transaction only) :

i. Micro-ATM/PoS,ii. mPoS,iii. Kiosk/Tablet/Mobile Handset

Incentive for AePSbased transactionsIncentive 0.5%of the transaction value per transaction for

AePStransaction of value more than Rs.25 toRs.l0,OOO/-

Minimum Incentive: Rs.2 per transactionMaximum Incentive: Rs.50 per transaction

The maximum incentive per FPSDealer Rs.2000per monthPayment Processand other conditions Entire incentive of 0.5% of the transaction value has

to be passed on to the merchant by the acquiringbank and no part of the incentive can be retained bythe acquiring bank to defray any of itsbanking/operating costs.

Aadhaar Authentication be device agnostic and anydevice viz., Micro-ATM/PoS, mPoS,Kiosk/Tablet/Mobile Handset etc be coveredprovided that the transaction is for sale of goods &services by a merchant establishment and paymentis by Aadhaar Number & Biometric authentication.However, regular Business Corresspondent (BC)banking transactions through microATM will not becovered under the scheme.

111

3.1.1.Procedure to settlement of claims to banks

a) Acquiring banks ( of FPSDealer) participating in the scheme may send application in theenclosed format (Annexure 1) informing their participation in the scheme.

b) An amount of advance will be placed with the merchant acquirer banks to enable them toincentivize the merchant transactions under the scheme.

c) Acquiring banks will provide utilization certificate on a monthly basis, based on which funds willbe replenished (Annexure 2)

d) The final claim and reconciliation, if any, to be submitted by the merchant acquirer bank, if any,against the advance.

e) In case of Regional Rural Banks (RRBs),the respective Sponsor bank may participate and seekclaim from NABARD.The consent and claim by the RRBsmay be dealt internally by the Sponsorbank. No separate application may be forwarded to NABARDin this regard.

12 I

131

Proposal to be forwarded byemail to CLdr.U{lT''1clLiacC.urg

Annexure 1

The Chief General ManagerNASARDDepartment ot Financial inclusion &. Banking TedmologyPlot No. (·24, 'G' Block.Sandra-Kurlil Complex. Bamlra IE)Mumbai - 400 O'S1

Dear Sir

Promotional scheme for SHIM Aadhaar- pay·Supoort under Financiillindusion f LInd (FIFI

Pleaserefer to your circular number dated on the captioned subject. in this Lorme<:!ion.we

ronfirrn our participatiorr in the scheme of "Incentivizing Addnaar Based Biometric Merchwt Tra'''<lliioo

through SHIM Aadhaar Payaod PoS/mPuS de·"it:es· Support under Financtal Inclusson Fund (fir}".

02. We agree to the terms and conditions indicsted in the Cirwlar ibid and will submit the utdilation

certificate to your office. as per Annexure 2 of the Circular, within :2 days from the end of calendar month.

03. We request 'jOU to k.indly release an advance for tbe above purpose in our Current Account being

rnaintained ",im RBIDr to the followmg Account

al Name of the Sil'1~:

b) Siwing; /Current·

cl Account No.:

dJ IFSCcode:

D4 We also confirm that the advance amount ,including RRBsspnnsuretl by our Bunk), wiil be uti'ized orA-i'

for Aadhaar bd~d biometnc merchant transacuons (purely merchant transaction un",,.)at PuS/rnPo,/ath',

de~'ite!i and BHIM AadhaaF Pay.

05. The unutihzed amount will be refunded 10NABARD b.,· 20 October 2017.

Your; faithfJII)'.

Name of authorized Ofijcer:DesignationName of the Bank

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I=laim to be forwarded bye rnail to ~'...'_'...."_'..1.·............."""".........,..,1.

Annexure l

TheChief Genera ManagerNABARCI

[J~p.artmo?ntof Finiinda! ~Il;:us-on &. Banking Techno Cg.-iPfot No, (-24, '18 Bloo:,Biindr ..-Kurla Comple<. Sandra I.E)Mumbai - 400 051

[lear Sir

Promotional sd1;:~ for BHIM Aadhaar Pay-SuPPOrt under financiallndusi.on Fund (FIFI

P'ease refer to. cur letter No ...... , dated, ...... cn the capticned $Ubject. ln this conn ...ction, we requ ...st you

to sanction the amount of Rs, against the advance amount rE'leased to our Bani: for the captionecscheme.

oL Table 1-ExpendihJr" DetaLs

Sr. No Particulars.

. (Date;Rs•

Exper::b",ure i,.,curred forthe month of

4 ':'.ddit:iona! ad\'illnce required for the mCffv;:h of.

02, Table 2-Triir.sactior Details for th-e month of, ... (including ,RRBssponsored by our Bank}

Sr.No

Particulars PoS/mPoS/other BH 1M Aadhaar Totald>!!'llkes Pay

[a] (b) (e) [d]

Bi omerr,c Transactions

1 Total number of merchantsacqui r-edby the Sa no:

2 T,~till No.. cf Aadhaar Ba:led

3 vVe c<?rtif,..·the ;';-c·1o'.""ing

aJ transact.ens €pv~n at th-e tab:~ abo-v€'A.adhaar bas<:dbiom~tT;jC trans,a;ctiors. at' rnerchant locatiorrsfpure::ymerchant tr-aruaction 0"1',') through BHH\1,Aachaar P::rdPoS/mF'o:s/,:tt'he;r de\",c.;:::;.

0:1 tr ansactso ns of up to R::::.2()(),)/· hacs: -cnlv be~r cov-e-red Wldo:-rthe- claimc) thoe caim ha: b~.e11r~co-ncl~d w-;~hth02-tnl1S-i.ction detai So a\'ai!:ab:e '""it'" NFCd) the c aim alsc cov~r:-me transact,C-ti done b·...r...1erchan:ACQuinn~ RRB!

o'~",:erequ~st It'OUto \!:'ndh..· ,sanction an ad-d,;t:ional advanee amount of R;5.

cf. ..2017 forthe ..bo .....purpose.

Na:m.:,of auth •.:tri:eCi Officer:D":?si,nation:Name efth .. B.. r,~Date:

3.2. SHIM Cashback Scheme for Merchants: In this connection, an incentive scheme called 'SHIM

Cashback Scheme for Merchants' was launched by MeitY on 5th June 2017 with the aim to incentivize

usage of BHIM application by merchant. Incentives provisioned under the scheme has been further

extended upto 31st March 2019 and made more attractive for merchant and beneficiaries. This schememay be leveraged in Public Distribution System where FPSowners should take the advantage of thisscheme by accepting money using BHIM application. Under this scheme, FPSowners will get cashbackas per the slabsexplained in the below table

No. of Credit Transactions (per month) Cashbackto the merchant (at the end of themonth)

Minimum Credit Transactions => 10Incentive 10%ofthe transaction value with an upper cap of

incentive of Rs50 per transactionMaximum cashback/ merchant per Rs.1000monthCondition 1.Minimum 10 number of credit transactions

2. Minimum transaction value Rs.25

3.2.1. FPSowners need to take the following steps for downloading SHIM application and availingcashback

Step 1: FPSowner to download and install BHIM mobile application from "Play Store" of Android OSorIIApp Store" of Apple OS.Step 2: SelectSIMwhich hasmobile number registered with Core BankingSystemof preferred bank.Step 3: Select bank and fill account details. Also set UPI PIN and Virtual Payment Address (likemobileno@sbi.in)Step 4: FPSowner to self-declare himself/herself asmerchant by filling appropriate details under 'I AM AMERCHANT'tab of the applicationStep 5: FPSowner can use any mode available on BHIM [ QR CODE,Virtual Payment Account (VPA),Mobile Number, or Aadhaar Number] to receive payment from beneficiaries.Step 6: Beneficiary must have BHIM application on his/her mobile phone for making the payment toFPSowner. ( FPSowner can ask/help beneficiary to download BHIM application to avail additionalincentive/ referral bonus of Rs.25 per beneficiary. Details are explained in below section)Step 7: Beneficiary can make. the payment to FPSowner by opting desired options like QR Code,Payment using Mobile Number or Aadhaar Number in BHIM ApplicationStep 8: On achieving the cashback slabs (as defined above), NPCIinitiates refund/cashback paymentinto his/her account between 1st to io" daysof subsequent month.Step 9: Both beneficiary and FPSowners can check cashback amount under the Reward Section ofTransaction category of BHIMApp.Download and Registration processof BHIM application is also illustrated in the below diagram

15 I

3et "(From Bank Ale Tab It'\

Ape:>HomePaoel,..,

*F~om ProfIle Tal:!'nAw~Pagel

3.2.2. Advantages of digital payment through BHIM application over other modes of payments aregiven as below

• No transaction charges involved in digital payment. Means Merchant as well as Beneficiary don'tneed to pay any additional charge for making digital transactions. ( like MDR, NEFT/ IMPScharges)

• Easyto use• No additional hardware required for making digital payment. BHIM Application can be downloaded

on any Android or Apple mobile. ( BHIM app features can also be used in Non Smart phone / FeaturePhonethrough *99# but telecom operator chargesmay be involved)

• Incentive scheme and Referral bonus scheme give opportunity to FPSOwner to earn Rs. 1000 permonth and Rs.25 per beneficiary as referral bonus respectively. Beneficiary will also get the chanceto earn referral bonus of Rs.25 against each referee.

3.3. BHIM CashbackScheme for Individuals : BHIM referral scheme for individual was modified andrenamed asBHIM CashbackSchemefor Individuals to bring new user on the BHIM platform andencourage the new user to do transaction using BHIM or BHIM UPI. This scheme hasalso beenmodified and extended till 31st March 2019 in order to attract more usersand to promote digitalpayment through BHIM application. Under this scheme, cashbackwill be given to install BHIMapplication for the first time and subsequently, incentive will be given basedon the transactions

16 I

performed during the month. This scheme has immense potential in Public Distribution System

because most of the FPSowners and beneficiaries are not receiving/making digital paymentsthrough SHIM application and this scheme offers cashback to both individuals.

Incentive for on-boarding on BHIM Application:

Incentive for installation of BHIM application for Total Amount (in Rs.) per BHIM app userfirst time user

New SHIM app user on downloading, installing 51and successfully completing one financialtra nsaction

NFSA beneficiary may also get the chance to lift one month foodgrains on lesser cost by earning

cashback after making digital payment using SHIM application. Following incentives are provisioned

under SHIM Cashback Scheme for Individual to use SHIM/SHIM UPI application

Sr.No. Incentive for individual Amount (in RS.) Conditions

1 SHIM and SHIM-UPI app users of 25 per transactions Minimum transaction

banks for unique financial value should be Rs

transaction. 100.The incentive will bepaid for maximum 20unique transactionsper calendar month.Only uniquetransactions will beeligible for incentive.

2 BHIM and BHIM-UPI app users of Number of Incentive Minimum transaction

banks for financial transaction. transactions per per value should be Rsmonth month 10.>=25but less 100 Calendar month willthan 50 be used for>=50but less 200 alculation ofthan 100 "month">=100 250

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Different modes of Digital Payments

1.Debit CardA bank account linked payment facility which offers a domestic /international, open loop, multilateralpayment option that allows the banks, financial institutions and customer to participate in digitalpayments. Debit cards in India are issuedmainly by three card schemesviz. RuPay,Visa and MasterCardto the customers through banks. Debit cards provide universal access to payment systems and areaccepted at point of sale (paS) and by online merchants in the country.2. Credit CardCredit card offers the convenience of buying goods or services now and paying later at a scheduled datespecified by the card issuer, as per the card billing cycle. Credit cards offer convenience and securityalong with a host of other privileges like welcome offers, access to airport lounges, cashbacks andconcierge services. Like Debit cards, Credit cards are also accepted at point of sale (paS) and by onlinemerchants in the country and are similarly issued by card networks like RuPay,Visa, MasterCard andAMEXamong others.3. Prepaid CardPrepaid cards are convenient, secure and hassle-free payment solution for variety of general purposecustomer needs, ranging from gifting to paying employee reimbursements to managing studentscholarship and fee payments. Prepaid cards are issued by banks as physical or virtual cards and needsto be pre-loaded before they can be used for different purposes.4. Mobile walletsMobile wallets are essentially digital versions of traditional wallets that someone would carry in theirpocket. They offer payment services through which the individuals / business can receive/ send moneyvia mobile devices.While there are many variants, usually they can hold digital information about creditand debit cards for making payments, store detailsregarding coupons and loyalty programs, specific information about personal identity and more. Peoplecan shop online, book movie tickets, rail or flight tickets, and pay their utility and other bills by makingpayments through their mobile wallets. Wallets could be open loop (bank wallets), semi-closed loop(PayTM,MobiKwik) and closed-loop (Uber, ala, Amazon).5. National Electronic FundsTransfer (NEFT)National Electronic FundsTransfer (NEFT)is a nation-wide payment system facilitating one-to-one fundstransfer. Under this payment system, individuals, firms, corporate and Government can electronicallytransfer funds from a bank account in a bank branch to any individual, firm or corporate having anaccount with any other bank branch in the country participating in the system. Individuals who do nothave a bank account (walk-in customers) can also deposit cash (Maximum Rs. 50,000/-) at the NEFTenabled bank branches with instructions to transfer funds using NEFT. NEFT transactions can beexecuted anytime during the weekdays. However, the transactions are settled in half hourly batches.There are a total of 23 half hourly settlement batches during the day between the time slots of 8am to7pm on weekdays. There is no minimum or maximum limit of amount which can be transferred throughNEFT.However, individual banks can put in place transaction limits at their end.

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6. Real Time Gross Settlement (RTGS)Real Time Gross Settlement (RTGS)is a real time fund transfer system which facilitates the user totransfer funds from one bank account to another bank account in real time or on a gross basis. Thepayment transaction is not queued up and gets executed instantly. The transferred amount is instantlydeducted from the bank account of the remitter and credited to the bank account of the beneficiaryinstantaneously. Users such as individuals, companies, firms or Government can transfer high valueamount using the RTGSsystem. The minimum value that can be transferred using RTGSis Rs.2 lakhs.However, there is no upper cap on the amount that can be transacted.7. Unified Payments Interface (UPI)Unified Payments Interface (UPI) powers multiple bank accounts into a single mobile application (of anyparticipating bank), merging several banking features, seamless fund routing and merchant paymentsunder one hood. UPIas a payment option makesmoney transfer as easy as sending a text message.Themoney transfer is instant, available round the clock and 365 days a year. Userscan send money, requestmoney and scan& pay using UPIasa payment channel.8. Bharat Interface for Money (BHIM)Bharat Interface for Money (BHIM) is an application that lets you make simple, easy and quick paymenttransactions using Unified Payments Interface (UPI).User can easily make direct bank to bank paymentsinstantly and collect money using just mobile number or payment address. User can also change thebank account liked with BHIMApplication. Servicescurrently on BHIM application are as follows:

SendMoneyReceivemoneyScanand PayTransactions History

Profile• BankAccountRequestBalance

9. USSD (*99#)*99# service, which works on Unstructured Supplementary Service Data (USSDLhas been launchedenvisioning the potential of mobile banking and the need for immediate low value remittances whichhelp in financial deepening and inclusion of under - banked society in the mainstream banking services.The service works without internet and usesvoice connectivity, available round the clock (works evenon holidays}, accessiblethrough a common code *99# acrossall TSPs,and works across all GSMserviceproviders and acrossall mobile handsets.10. Immediate Payment Service (IMPS)IMPS is an innovative, real time payment service that is available round the clock to the users. Theservice empowers customers to transfer money instantly through banks and RBI authorized PrepaidPayment Instrument Issuers (PPI) across India to over 190 banks. Some of the key features of IMPSinclude:

Instant money transferRound-the-clock service (even on weekends & bank holidays)Debit & credit confirmation by SMSto remitter and beneficiary

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11. Aadhaar Enabled Payment System (AePS)

Aadhaar Enabled Payment System (AePS) is a payment service empowering a bank customer to use

Aadhaar as his/her identity to access his/her Aadhaar enabled bank account and perform basic banking

transactions like balance enquiry, cash withdrawal, remittances through a Business Correspondent

Under AePS, following services are currently offered to customers both in inter-bank and intra-bankmodes.

Balance Enquiry

Aadhaar to Aadhaar Fund Transfer

• Cash Withdrawal

Cash Deposit

Best Finger Detection (BFD)

12. BHIM Aadhaar

BHIM Aadhaar is a mobile application than enables a merchant associate of any acquiring bank, to

accept payments from customers using the Aadhaar number and biometric authentication. The service

allows the merchant to accept payments from customers of any bank, by authenticating his/herbiometrics (presently only fingerprints). The Aadhaar Linked bank account of customer is debited and

the proceeds are instantaneously received in the merchant bank account. To be able to effect the same,

merchant associate must have an android mobile with the BHIM Aadhaar application and acertified biometric scanner attached with the mobile phone via USB port.

13. National Automated Clearing House (NACH)

National Automated Clearing House (NACH) is a centralized payment system, launched with an aim to

consolidate multiple ECS(Electronic Clearing System) running across the country. NACH system can be

used for making bulk credit transactions like distribution of subsidies, dividends, interest, salaries,

pension etc. and also for bulk collection of payments pertaining to telephone, electricity, water, loans,

investments in mutual funds, insurance premium etc. Currently, more than 1300 banks are part of NACHnetwork.

14. Aadhaar Payment Bridge Systems (APBS)

Aadhaar Payment Bridge System (APBS) is a unique payment channel which uses Aadhaar number as a

central key for electronically channelizing the Government subsidies and benefits to the Aadhaar

Enabled Bank Account (AeBA) of the intended beneficiaries. It is a payment system based on Aadhaar

number and liN (Institution Identification Number).

15. National Financial Switch (NFS)

National Financial Switch (NFS) connects all ATMs in the country and facilitates interbank ATM cash

withdrawal along with a host of other nonfinancial services like balance enquiry, mini statement, pin

change, fund transfer etc. NFS is a multilateral domestic ATM network which connects more than 2 lakh

ATMs in the country.

16. National Electronic Toll Collection (NETC)

National Electronic Toll Collection (NETC) is based on an Intelligent Transportation System (ITS)

application that ensures non-stop vehicle movement at toll plazas of National Highways across the

country. Termed as FASTag, electronic toll collection has been rolled out in more than 350 toll plazasand helps eliminate congestion on tollways; thereby providing convenience to the users and enhancing

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operational efficiency for toll operators. FASTag employs Radio Frequency Identification (RFID)

technology for making toll payments directly from a prepaid account linked to the FASTag device. This

device is required to be affixed on the windscreen of the vehicle and enables users to drive through tollplazas.

17. Bharat Bill Payment System (BBPS)Bharat Bill Payment System (BBPS)is a national integrated bill payment system providing a one-stopinteroperable and accessible bill payment platform to all customers across the country for paying anybill "Anytime, Anywhere" with utmost ease, certainty, reliability and safety of transactions. BBPSallowsmultiple modes of payment like debit cards, credit cards, net banking, prepaid wallets, IMPS, UPI, andAePSetc. BBPScovering all important categories of utility bill payments, spanning across electricity,telecom, DTH,gas and water through a single window. Over time the BBPScategories can be expandedto include insurance premium, mutual funds, school fees, institution fees, credit cards, taxes, invoicepayments etc.18. Bharat QR CodeBharat QRCode is a unique, low cost, interoperable payment solution jointly developed by paymentnetworks like Visa, MasterCard, RuPayand American Express.This payment system is a first of its kind,interoperable solution, across the globe. BharatQRCode makes use of QR code technology for makingpayments acrossmerchant outlets. It works as a common interface for the Visa / Master Card/ RuPay/Amex platform and enables users to make payments to merchant without using a merchant ID ornumber. BharatQR code has eliminated the need of using card swiping machines for making digitalpayments. For accepting payments using BharatQRCode, merchants are required to display BharatQRcode in the outlet and the user can make payment by scanning the code. BharatQRcod is of two typesstatic and dynamic. In static QRCode the user has to first scan the code and then enter the amount tobe paid. In dynamic QRCode, a new QRCode is generated in real time for every transaction. In this case,the user is not required to enter the amount. The payment can be made by scanning the QRcode andentering the PIN.• Brief on BHIM App:-The Bharat Interface for Money (BHIM) app was launched by the Hon'ble Prime Minister of India on30th December 2016 to promote Digital transactions. BHIM App was envisaged as a starter App to bringnew as well as for more financial inclusion in digital banking. It uses UPI (Unified Payments Interface)platform to offer payment services.• Brief on BHIM Aadhaar:-Government has also launched BHIM Aadhaar, a merchant version of Aadhaar Enabled Payment System(AEPS).This will be specifically beneficial for those who do not have debit cards, mobile wallets andmobile phones. The app is linked to a biometric scanner instrument to validate the customer'sbiometrics. During the payment process, the customer will be required to input their Aadhaar number,followed by selecting their respective bank. The transaction is then validated through the scan of theconsumer's biometrics, which acts as their password or pin. The amount gets automatically deductedfrom your Aadhaar-linked bank account and credited to the merchant's Aadhaar-linked bank account.

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