Money & Banking

RBI commences first Test Phase of Regulatory Sandbox retail payments

Our Bureau Mumbai | Updated on November 17, 2020 Published on November 17, 2020

Two entities are testing offline e-payment facility for remote locations in the country

The Reserve Bank of India (RBI) on Tuesday said two entities — Natural Support Consultancy Services Pvt Ltd, Jaipur and Nucleus Software Exports Ltd, New Delhi — started testing of their products under its ‘Regulatory Sandbox (RS) - First cohort on Retail Payments - Test Phase’ from November 16.

RS usually refers to live testing of new products or services in a controlled and test-regulatory environment for which regulators may (or may not) permit certain regulatory relaxations for the limited purpose of the testing.

Natural Support Consultancy Services’ product ‘eRupaya’ is a set of Near-Field Communication (NFC) based Prepaid card and NFC-enabled Point of Sale (PoS) device to facilitate offline Person-to-Merchant (P2M) transactions and offline digital payments in remote locations, according to RBI.

The offline digital cash product, ‘PaySe’, of Nucleus Software Exports will help connect with rural areas for e-payments, said the RBI.

Offline digital payment

The product proposes to help in digitisation of payments in rural areas, starting with Self Help Groups (SHG), through an offline payment solution and a digitised SHG-centred ecosystem, it added.

The RBI said it received applications from 32 entities of which six have been selected for the ‘Test Phase’.

The central bank underscored that commencement of testing was delayed on account of the present Covid-19 situation.

“Two entities…have started testing of their products from November 16, 2020. The remaining four are expected to start the test phase shortly which will be communicated as and when they do so,” the statement said.

The RS allows the regulator, the innovators, the financial service providers (as potential deployers of the technology) and the customers (as final users) to conduct field tests to collect evidence on the benefits of new financial innovations while carefully monitoring and containing their risks.

“It (RS) can provide a structured avenue for the regulator to engage with the ecosystem and to develop innovation-enabling or innovation-responsive regulations that facilitate delivery of relevant, low-cost financial products. The RS is an important tool which enables more dynamic, evidence-based regulatory environments which learn from, and evolve with, emerging technologies,” RBI said.

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Published on November 17, 2020
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