PAYMENT SYSTEM OPERATORS?

Question 1

What does PSO stand for?

Answer 1

Payment System Operator

Question 2

What is the primary function of a PSO?

Answer 2

To facilitate the transfer of money between individuals and businesses through payment systems.

Question 3

What Indian organization licenses and regulates PSOs?

Answer 3

The Reserve Bank of India (RBI)

Question 4

Name one specific example of a PSO.

Answer 4

(You can pick any from the examples we discussed: NPCI, Visa, Western Union, PayTM, etc.)

Question 5

What type of PSO oversees retail payment systems in India?

Answer 5

Umbrella Entity for Retail Payments (example: NPCI)

Question 6

Name two companies that operate as Card Payment Gateway Operators.

Answer 6

(Choose any two from the following: MasterCard, Visa, Rupay)

Question 7

What type of PSO would you use to send money to a friend in another country?

Answer 7

Crossborder/International Remittance (examples: Western Union, MoneyGram)

Question 8

Amazon Pay, PhonePe, and Paytm are examples of what type of PSO?

Answer 8

Prepaid Payment Instruments (PPI)

Question 9

What is the role of a Payment Aggregator?

Answer 9

Payment Aggregators help merchants process digital payments from customers.

Question 10

What does an ATM Operator do?

Answer 10

An ATM Operator manages and operates Automated Teller Machines (ATMs).

Question 11

What is a Financial Market Infrastructure Provider?

Answer 11

Provides the systems and platforms for trading in financial markets (e.g., Clearing Corporation of India for stocks, bonds, etc.)

Question 12

What does NUE stand for, and why was the concept introduced in India?

Answer 12

NUE stands for New Umbrella Entity. It was introduced in India to foster competition in the retail payments sector.

Question 13

Outline the role of the NPCI in India’s payment systems.

Answer 13

NPCI is the umbrella organization governing retail payments in India. It offers services like card payments (RuPay), money transfer (IMPS), mobile apps (UPI, BHIM), and ATM networks (NFS).

Question 14

When did the RBI propose the licensing of NUEs, and what was the main goal?

Answer 14

The RBI proposed licensing NUEs in 2020. The goal was increased competition, leading to innovation and reduced costs in retail payments.

Question 15

What is a key potential benefit of introducing NUEs to the Indian payments landscape?

Answer 15

More innovation in digital payment services.

Question 16

How might consumers benefit directly from competition in the retail payments sector?

Answer 16

Consumers could experience lower costs and better services.

Question 17

Briefly describe the outcome of the NUE license application process in 2021.

Answer 17

Big tech companies applied, but none met the RBI’s expectations. The licensing process was put on hold in 2023.

Question 18

List potential areas where applicants for NUE licenses might have fallen short of RBI expectations.

Answer 18

Experience and capability, financial strength, governance structure.