In recent years, online payments have become an integral part of the Indian economy. With the advent of payment gateways, the shift from cash to cashless transactions has gained momentum. A payment gateway serves as a vital component in facilitating secure online transactions and ensuring the safety of electronic systems. It acts as a bridge between economic institutions and the national banking system, enabling seamless transactions in the digital realm.
Payment and settlement frameworks in India are frameworks for payments and settlements involving money. They fall within the purview of the Payment and Settlement Frameworks Act, 2007 (PSS Act), which was passed in December 2007 and is governed by the Board for Guidelines and Oversight of Payment and Settlement Frameworks and the Reserve Bank of India. India has many payment and settlement systems, including gross and net settlement systems. India's Real Time Gross Settlement (RTGS) system handles gross settlement, while the National Electronic Fund Transfer (NEFT) system, Immediate Payment Service, Unified Payments Interface, Electronic Clearing Services (ECS Credit), and Electronic Clearing Services (ECS Debit) handle net settlement (UPI). (Reserve Bank of India - Payment and Settlement Systems, n.d)
The payment and settlement frameworks in India encompass various systems for conducting financial transactions involving money. These frameworks are regulated by the Payment and Settlement Frameworks (PSS) Act, 2007, overseen by the Board for Guidelines and Oversight of Payment and Settlement Frameworks as well as the Reserve Bank of India. Within these frameworks, there exist different types such as gross settlement systems that handle Real Time Gross Settlement transactions(RTGS), and net settlement systems including National Electronic Fund Transfer (NEFT), Immediate Payment Service (IMPS), Unified Payments Interface (UPI), Electronic Clearing Services(ECS) credit and debit. The Reserve Bank of India is making every effort to encourage elective payment methods that will improve the security and efficiency of the payment framework and simplify the entire process for banks.
An important development by the Govt of India in this context is The Digital India program to transform the country into a digitally empowered society and knowledge economy"(Ministry of Electronics and Information Technology, n.d). By providing good internet connectivity, the campaign attempts to bridge the gap between citizens and the government as well as improve digital literacy. "Faceless, Paperless, Cashless" is one of the professed goals of Digital India.