UPI Use Case (White Paper - Nagendra) V2

PAYMENTSas Easy as a Tap,Touch or a Blink

PAYMENTSAS EASY ASA TAP, TOUCHOR A BLINKUPI has progressed rapidly to becomeIndia’s universally popular interface forpayments, supported by widespreadaccess to mobile connectivity andcustomer appetite for convenience. Thenew hotbed for payment innovation, UPIis evolving from providing a real-timeinfrastructure for person to personpayments to support myriad use case forperson to merchant payments. Whethercustomers want to shop, pay bills orpreauthorize payments, UPI can simplifyand streamline customers’ paymentexperience.

Customers can make and receivepayments in multiple waysincluding scanning QR codes,using messaging apps, payingonline or via digital wallets. Formost consumers the ability to payusing a Virtual Payment Addresslinked to the bank account offersgreater convenience thancarrying a traditional wallet withmultiple credit and debit cards.Payments go straight from thecustomer’s bank account into thepayee’s account and provide nearreal-time notification to parties.FSS is partnering with PaymentService Providers to harness newopportunities and deliver tailoredproducts and service that tap intothe Central platform’s capabilities.Ultimately, providing customerfocused payment propositionsand deliver engagingtransactional experiences thatWOW customers is a valuableopportunity to build a positivebrand experience.

SNAP AND PAYCurrent password-drivenauthentication methods beliecustomer expectations of asmooth transactions experience.Snap and Pay integratesbiometrics in the transaction pathto deliver a frictionless shoppingexperience. Customers need tosnap a quick selfie toauthenticate and approvepurchases dramatically speedingthe digital checkout experiencewhilst assuring security.Snap and Pay works by promptingthe user to open an app to take apicture and enter the UPI VPAand the amount. The app hasbuilt-in checks to verify theperson is real and not an image.Note: Developed as proof of concept by FSS

CHAT AND PAYProvides customers the convenience of conversing with theapp to make or request a paymentCustomer choosesChat optionavailable in the PSPUPI applicationChatbot SDKintegrated in the UPIapplication, assistswith customer’squeriesCustomer can availmultiple serviceoptionsCommentLikeSharewrite a comment.Customerreceives aresponse inreal-timeCustomerapproves thetransaction usingthe UPI PINChatbot systemintegrated with PSPUPI backend to fetchthe relevant data forthe chat session

SCAN AND GOUPI allows customer to enjoy a seamless payment experience byusing static or a dynamic QR code that is unique to every transaction.QR codes can be used by any seller to accept e-payments - evenbusinesses that offer unmanned payment acceptance - without theneed for additional point of sale infrastructure.Static QR CodeCustomers can scan QR Codes on the television screen or an outdooradvert to initiate a payment. The amount is transferred directly fromthe bank account, eliminating the need to enter the merchant’s ID orphone number to make payments.Merchant displaysUPI QR to acceptpaymentsCustomer scansthe QR to paythe merchant18On successful completionboth customer andmerchants receives a realtime notificationCustomer entersUPI PIN BANK The transaction is routed tothe UPI switch for onwardrouting. The merchantaccount is credited and thecustomer account is debited

Dynamic QR CodeDynamic QR codes optimize the in-store checkout experience. Withmerchant-presented QR codes, customers scan the QR code, enterthe payment amount and PIN.Customerrequest topay by UPIMerchant selectsUPI in the POSdevice and entersthe amountCustomer selectsthe UPI - Scan & Payoption, and scans theQR CodeCustomer receivesnotification oncompletion of thetransactionOn successful paymentcompletion the PSP notifiesthe POS solution with thetransaction responseCustomerenters theamount andUPI PINCollect Request via QR codeCustomers and corporates can collect payments by sending a QRcode to one or many payees

GROUP PAYMENTSExpense pooling and itemizingcosts with friends and family canoften be complicated and sociallyclumsy. UPI provides an easy andflexible payment option forsplitting a payment. Customerscan fund a group expense like aparty, a vacation, or rent andrequest a payment after the fact.To receive or pay monies,customers can select payer orpayee details, enter VPA andamount to split the transaction.Split Payments supports a varietyof everyday applications, includingCollect and Parallel PaymentsCollect PaymentsCollect rent from multipleco-payeesSend taxi bills to co-ridersBook a group tour wherein theorganizer’s part of the paymentis charged to their account andthe remaining members of thegroup have a pre-defined timeto log on to the travel site andpay their partGenerate Collect request basedon itemized bill for each groupmember.Parallel PaymentsAllows payer to split thepayment between multiplebeneficiaries.In addition to standard servicesPSPs can offer value adds suchas automatically calculate whoowes what - or provide anitemized bill for each groupmember for a dinner.

Collect PaymentsCustomer selectscollect option in thesystem and enterspayer’s UPI ID1Payee's PSPprocesses and routesthe transaction to UPIcentral infrastructurePayer receives thecollect notification ontheir UPI mobileapplication23Payer authorizes the transaction andenter UPI PIN. On successful completionof the transaction, Payee UPI receivesthe transaction confirmation from UPIcentral infrastructure4Payee PSP credits theaccount and notifies thecustomer5

MANDATE A PAYMENTMandated or pre-authorized payments automates the payment process,making transactions hassle-free and completely transparent to thecustomer. Customers can make regular transactions by authorizingthe PSP or the service provider to automatically debit their accounts,pushing the payment into the background.Payer and Payee Initiated MandatesIn event of payee-driven mandates, payee can initiate the mandate requestand the payer can authorize the PSP to debit account and transfer monies tothe Payee VPA. Payers can also initiate payments by providing instruction totheir PSP to credit the customer VPA. Typical transactions include:Make a payment at the designated date of the month-e.g. rent, utilityAuthorize the merchant to charge accounts for a high-ticket-sizepurchase on an equal instalment planInstruct the bank to debit accounts on a scheduled date at the timeof pre-booking a product; example a new mobile phone

Payer provides hisVPA to the payeeon a web/mobileinterfacePayee sends amandate requestto UPI for routingto Issuer PSPIssuer validates therequest digitallysigns the mandateand approves it Once the mandate isregistered, the payer’saccount is debited and payeeaccount credited as per themandate instructionsUPI forwards therequest to thePayer PSP and thePayee PSPMandate PaymentsIndicativeUPI MANDATECREATE MANDATEEnter Valid UPI IDCreate new MandateVERIFIEDapp@ubinMANDATE HISTORY DETAILSGOLD LOANRs:1000.00virtualaddr@upiYEASMINA KHATUN MONDALMANDATE HISTORY05-06-2018WeeklyRequest MandateEnter Benificiary Name (optional)testDETAILS OF MANDATEMy MandatesVAlIDITYPAYMENT ID05-06-2018: UBIF348734DREDGOLD LOAN06-06-2018Mandate Request ReceivedMandates History11FREQUENCY TYPEScan and create Mandate28-06-2020Enter AmountQUARTERLYFREQUENCY DAY VALUEFixed / MaxSTART DATE: 24-06-2018abc@ubinEND DATE: 30-06-2019CAR SERVICESDEBIT FREQUENCY : Weeklypsp@ubinBENIFICARY NAME : KALI SELVI MLIC PREMIUMtest@unionbankNO OF DEBIT10Onetime50Yearly:55REMAINING DEBIT : 3DEBIT DAY TYPETOTAL AMOUNTB100Daily: 200000.00MARRIAGE GIFTjhsgc@utbiEMPLOYEE BONUS90Aspresented20

APP TAP AND GOCustomers value simpler, frictionless checkout experiences. UPIbased NFC payments are accepted at merchants including retail stores,fast food restaurants, pharmacies, grocery and convenience stores, attransit locations and at vending machinesTaxi Driverdisplays theNFC stickerin the taxiPassenger pays thedriver by tapping theNFC-enabled mobiledevice, without openingany UPI applicationCustomer selects theapplication, choosesthe account andenters the PINMobile initiates thedeep-linking calland all UPIapplications in themobile pop-upPSP UPI system debitsthe customer account androutes the transaction toNPCI for crediting thepayee account

ONLINE PAYMENTSOnline payments via UPI, enable merchants save interchange costscharged by conventional card rails and encourage a higher volume ofcustomers to transact online. The process is exceedingly simpleMerchants can initiate a collect request once the customer confirmsUPI as a payment option and provides VPA details during checkout.01 Customer visits shopping portalCustomer adds shopping items on02 the e-commerce enabled portal03Customer selects 'Pay By UPI'on the payment page04 Customer receives a Collect request05 Customer confirms the paymentCustomer account is debited and06 merchant account is credited

CROSS-BORDERTRANSACTIONSRemitters can send money using the beneficiary’s VPA as a proxy forBank Codes and Account numbers, eliminating the need to rememberlengthy account numbers and improving their customer experience 1091BANK2Remitter Initiatestransaction andprovidesbeneficiary VPACorrespondentBank in PCI-UnifiedPaymentsInterface

CORPORATE PAYMENTSReal-time payments using UPI have many advantages for corporates includinga simpler process, greater transparency, and a reduction in the cost of cash andcheque processing.Bulk DisbursalsBulk payments allow customers to make multiple credit payments in a singletransaction. For example, payroll, supplier payments or dividend distributionamong shareholders. Corporates have the option to authorize bank to debitaccounts on a scheduled dateBulk CollectEnd of day or monthly collection payments from distribution network Corporate wantsto transfer funds/collect funds viaUPI systemCorporates initiatesthe transactionrequest in a single ora batch file formatUPI routes the debitrequest to thecentral system foronward routing tothe respective PSPs The Corporate systemis integrated with thePSP UPI systemCorporate PSP UPI systemprocesses the batch file andinitiates the debit request

BLOCK FUNDSAllows banks to block a certain sum in an account as security anddebit it at a future date without additional authentication. The facility isuseful for ecommerce transactions once goods are delivered as wellas IPO related paymentsPayer enters payeeVPA /UPI mPIN andamount to initiateBlock Fund requestPayer PSP blocksthe entire amountBlocked Fund willbe credited onPayee PSP initiatingthe collect mandateAbout FSSFinancial Software and Systems (FSS) is a leader in payments technology and transaction processing. The company offers adiversi ed portfolio of software products, hosted payment services and software solutions built over 25 years of experience.FSS, end-to-end payments suite, powers retail delivery channels including ATM, POS, Internet and Mobile as well as criticalback-end functions including cards management, reconciliation, settlement, merchant management and devicemonitoring. Headquartered in Chennai, India, FSS services leading global banks, nancial institutions, processors, centralregulators and governments across North America, UK/Europe, ME/Africa and APAC and has 2,500 experts on-board.For more information, write to products@fsstech.com

UPI QR to accept payments Customer scans the QR to pay the merchant Customer enters UPI PIN The transaction is routed to the UPI switch for onward routing. The merchant account is credited and the customer account is debited BANK 1 8 On successful completion both