1. Payments Project Proposals for today and tomorrow.
Group 2: Rakesh Pulapaka | Mohit Jain | Shubham Bapna

2. Today’s Situation
Need to physically go and drop of cheque in box or give to society manager.
Reconcile with the manager once the payment is made.
High cost of digital payment transaction.
Poor/Unguided User Experience
Forgetting the due date etc.
Rakesh & Mohit’s Storytelling Rakesh: In tensed mode..
Mohit: I ask him his issues.. Rakesh: Shares these problems. (slide 1) Mohit: I listen to his problems. And then I share with him about SNM. Its business overview. Then, Mohit: But, they have issues on their payment side.
It is costly for members to make payment on their platform for CAM as well as if
I purchase or hire someone for any service and make the payment digitally. (slide 2)
But it’s a GOOD day for you. Bcoz I’ve done my in-depth research on payments &
I want to propose them my payment solution. Rakesh: But how? Explain it to me. Mohit: Its quite simple. Let me help you understand what UPI 2.0 & Aadhar led payments can do?

3. Where do Payments comes into Picture?
Business Overview
Where do Payments comes into Picture?
Existing Barriers in Payment Ecosystem
Payment made by members to societies (CAM fees)
Business Overview: SocietyNMore is an online society management portal. As a part of their service offering they also need to raise monthly/quarterly maintenance invoices to members on behalf of societies and allow members to make payment through credit/debit cards and net banking. Further they also offer online marketplace from local (nearby) vendors and service providers.
Exisiting Barriers in Payment Ecosystem: User Experience & High cost of Transaction
Payment made by members to vendors via SNM marketplace

4. Our Proposal Integrating UPI 2.0 API in the portal/app interface.
Aadhar-led Enrolment

5. New Architecture : UPI 2.0

6. UPI 2.0 : Value Proposition
1. ENHANCED SECURITY: Transaction authorization using biometric.
Problem : Currently transactions in UPI are authorized using UPI PIN. The user has the option of self generating this UPI PIN with or without ATM PIN as a second factor authentication and also has the option of changing the UPI PIN, whenever required. While PIN has been used across the payment systems, the issues related to this such as users having to remember multiple PINs, forgetting PIN or entering wrong PIN have been the major cause of the transaction declines. The security concerns that user may have in case of lost mobile phone or others able to access their UPI PIN and able to do fraudulent transactions, warrants availability of alternative mechanism for users to authenticate transactions.
Solution : Biometrics is a security identification and authentication feature that uses automated methods of verifying or recognizing the identity of a living person based on a physiological or behavioural characteristic. These characteristics include fingerprints, facial images and Iris prints. Biometrics is emerging as an effective mechanism to both identifying users as well as authorizing any financial transactions.

7. Biometric Authentication Flow

8. UPI 2.0 : Value Proposition
2. UPI MANDATE : (a) Payee initiated mandate
UPI Mandate: Users have an inherent need to make payments that are either one time or recurring in nature, for e.g. utility bills payment, insurance premium etc. Such payments have mechanism already in place that include concept of billing cycle , last date of payment and penalty in case of delay/default in payment. To have better control for such payments and have hassle free process, users are opting for mechanism of providing mandate to the biller/merchant/corporate for debiting their accounts. While the mandate creation is a one- time activity, it allows user’s account to be debited as per the agreed terms and condition, without the user to authenticate the transaction every time. UPI currently does not have the functionality of generating mandate or authorizing recurring payments through one time authentication. This option is introduced in UPI 2.0 to enable UPI users to perform recurring payment transactions with the same ease and convenience. This functionality shall have its own mechanism of generating/accepting mandates; independent of any similar services available in the ecosystem.
Solution: UPI will offer the mandate service that will allow both payer and payee to create mandates or standing instructions (SI) through their respective PSPs/banks. This mandate shall be registered immediately post the one time authentication by the payer. To start with UPI will support only revocable mandates and mandates can be created on UPI ID / VPA (all valid UPI VPAs are supported) only.

9. User Flow from SocietyNMore’s Perspective to collect CAM fees. (UI/UX)
1. Payer provides his VPA to the Payee (merchant, corporate, individuals) on a web/mobile interface or by any other means.
2. Payee application initiates creation request via Payee PSP and Payee PSP sends a create mandate request to UPI and in turn to Payer PSP.
3. Payer would be able to see this request with all the details in the “Request Received” option on his PSP app
4. Payer can choose to either approve the mandate immediately or later within a time frame of 72 hours.
5. Payer views the request on his mobile and authorizes the mandate by selecting the debit account and providing the credentials (UPI PIN/biometrics).
6. Payer PSP sends mandate Detail to UPI.
7. UPI forwards mandate request to issuer for validating credentials.
8. Issuer validates request, PIN, etc. and if found valid, “digitally signs" the mandate XML.
9. Issuer returns the entire signed mandate XML within the response to UPI.
10. UPI sends mandate confirmation with the digitally signed XML to the Payer PSP.
11. UPI responds to Payee PSP with the mandate response without the digital signed XML.
12. Payer PSP stores the mandate as a VPA and can be viewed by user in the “My Mandates” Option of the PSP application.

10. UPI 2.0 : Value Proposition (cont.)
2. UPI MANDATE: (b) Payer initiated mandate
UPI Mandate: Users have an inherent need to make payments that are either one time or recurring in nature, for e.g. utility bills payment, insurance premium etc. Such payments have mechanism already in place that include concept of billing cycle , last date of payment and penalty in case of delay/default in payment. To have better control for such payments and have hassle free process, users are opting for mechanism of providing mandate to the biller/merchant/corporate for debiting their accounts. While the mandate creation is a one- time activity, it allows user’s account to be debited as per the agreed terms and condition, without the user to authenticate the transaction every time. UPI currently does not have the functionality of generating mandate or authorizing recurring payments through one time authentication. This option is introduced in UPI 2.0 to enable UPI users to perform recurring payment transactions with the same ease and convenience. This functionality shall have its own mechanism of generating/accepting mandates; independent of any similar services available in the ecosystem.
Solution: UPI will offer the mandate service that will allow both payer and payee to create mandates or standing instructions (SI) through their respective PSPs/banks. This mandate shall be registered immediately post the one time authentication by the payer. To start with UPI will support only revocable mandates and mandates can be created on UPI ID / VPA (all valid UPI VPAs are supported) only.

11. User Flow for a Society Member Mr
User Flow for a Society Member Mr.X who wants to budget his Grocery Expenditure by creating UPI Mandate for the Grocery Vendor. (UI/UX)
1. Payer creates the mandate on the PSP app against a verified payee VPA by filling in the mandate attributes.
a. UPI provides option of creating one-time as well as recurring mandate. If the Payer selects a one-time mandate then he is given an option where he can choose to intimate the payee or not. All recurring payments are by default intimated to the Payee PSP.
b. After entering the mandate details, payer provides credentials (UPI PIN/Biometrics) to authorize the mandate.
c. Payer PSP creates UUID based UMN (Unique Mandate Number)
2. Payer PSP now sends a create mandate request to UPI.
3. As the VPA address is already verified, UPI sends mandate request to the Issuer Bank of the Payer for verifying and signing the mandate.
4. Issuer validates the request, cred block etc. and if found valid, "digitally signs" the mandate XML and returns the entire signed mandate XML within the response to UPI. (Issuer may or may not store the signed XML and may choose to validate the request each time when the mandate is executed).
5. UPI returns the signed XML to the Payer PSP.
6. UPI also sends the confirmation message to Payee PSP without the digitally signed XML provided the user has chosen to inform Payee.
7. Payer PSP stores the mandate as a VPA and can be viewed under “My Mandates”
8. SMS is sent by the Payer PSP to the Payer on the successful create, modify, suspend and revoke action on the mandate.

12. Other Use Cases: Payment made to drivers, housekeepers etc.
EMI Payment without Bank’s interference.
Allocation of Budget for Groceries, Daily needs etc.
Collecting fixed payments on rented bikes etc.
Vendor payments like LIC premium etc.
Payer Initiated Mandate
Payee Initiated Mandate
Vikram has to pay his driver a salary of Rs every month. He decides to create a mandate for this recurring payment payable on the 1st of every month for Rs Vikram opens the UPI PSP app. he enters his driver’s VPA/UPI ID, Amount Rs , validity date ( 1st August 2017 to 31st July 2018),frequency as monthly ,amount rule as Fixed and debit day as 1st of every month. The UPI mandate is created once Vikram authorizes the request either with his UPI PIN or biometrics. On the 1st of every month the driver’s account is credited with the salary.
Sameer goes to an electronics store to buy a television set worth Rs on a monthly EMI basis , he decides to create a mandate for the same and share it with the store owner for debit to his account once a month. Sameer opens the UPI PSP app and enters the electronics store owner’s UPI ID/VPA, amount as Rs.5000 with a validity of 1 year (1st August 2017 to 31st July 2018) , frequency as monthly , amount rule set as Fixed and debit day set as 10th of each month. The UPI mandate is created once Sameer authorizes the request either with his UPI PIN or biometrics. The electronics store owner’s account is credited with the EMI amount against the purchased television set on the 10th of each month for a period of 1 year.
Arun’s expense on groceries for a month is Rs 10000, for this he decides to create a mandate. Arun opens his UPI PSP app and creates a mandate on the local grocery store by entering the store’s UPI ID/VPA, amount as Rs with a validity of 1 month (1st August 2017 to 31 st August 2017) frequency as “as-presented” and amount rule as Max. He then authorizes the mandate using his UPI PIN or biometrics. He can then view his mandates in “My Mandates” option in the UPI PSP app. When he goes to the grocery store, after his purchase he shows the QR generated for the mandate to the shopkeeper who then opens his UPI PSP app to scan the QR and enters the amount of purchase, if the amount entered by the shopkeeper is within the limit of the mandate the transaction goes through without Arun having network connectivity on his mobile at the time of payment.
: Mr. Dharmendra wants to collect the rent from his tenant named Shreya on monthly basis so he creates a mandate on Shreya for Rs Mr. Dharmendra opens the UPI PSP app and enters Shreya’s UPI ID/VPA, Amount Rs. 7000, validity date ( 1st August 2017 to 31st July 2018),frequency as monthly ,amount rule as fixed and debit day on 3 rd of the month. Shreya receives the create mandate request from Mr. Dharmendra. She opens the UPI PSP app and authorizes the mandate request with UPI PIN or biometrics. Mr. Dharmendra’s account gets credited for rent on the 3rd of each month.
Ashok has a policy from LIC and LIC has come up with a functionality to pay the premiums on a monthly basis, Ashok has decided to avail this and hence LIC has decided to create a mandate for Ashok for amount Rs. 1500, validity date as long as the term period i.e. 10 years (1st August 2017 to 1st August 2026), frequency of monthly, amount rule as max and debit day on 3rd of the month and sends a create mandate request to Ashok. Ashok opens his UPI PSP app and authorizes the collect mandate request with UPI PIN or biometrics. The mandate transaction gets executed on the 3rd of each month.

13. UPI 2.0 : Value Proposition
Benefits of UPI Mandate
No Dependence on other means of Payment
Simplify mandate lifecycle
Mass Adoption of UPI
Dependence on other means of Payment: Introduction of mandate in UPI shall cater to those user segments who depend on other means for scheduling their recurring payments.
Simplification: Mandate process in UPI shall simplify mandate lifecycle process.
Mass Adoption: This process shall be a boon to the merchant/corporate segment as UPI user base will be available to them for their existing payment needs.

14. UPI 2.0 : Value Proposition
3. SIGNED INTENT & QR
Enhance Security
Frictionless Transaction
Enhance Security The implementation of signed intent shall enhance the security functionality for intent based UPI transactions.
Frictionless Transaction : In case of request received through genuine intent, PSP app may not request for APP passcode and only prompt for authentication using UPI PIN or Biometric/Iris. This will ensure a frictionless transaction experience for the users.

15. Bivek creates a mandate and shares QR code via Whatsapp.

16. Bivek creates a mandate and shares QR code via Whatsapp.

17. Aadhar-led Enrolment Use of Biometric Devices (improves UX)
Mobility ( Easy to carry devices instead of carry mPOS provided by ATOM)
Low transaction cost

18. UPI API Integration 1. QR created by Payer
UPI specific parameters for UPI Mandate. (M-Mandatory, O-Optional, C- Conditional)
URL link: upimandate://payer?umn=& am=&tn=

19. UPI API Integration 2. QR created by Payee (cont.)
UPI specific parameters for UPI Mandate. (M-Mandatory, O-Optional)
URL link: upimandate://payee?pa=&p n=&mn=&tid=&type=&vali ditystart=&validityend=&am =&amrule=&recur=&recurv alue=&recurtype=&tr=&url =&cu=&mc=&tn=

20. UPI API Integration 2. QR created by Payee
UPI specific parameters for UPI Mandate. (M-Mandatory, O-Optional)
URL link: upimandate://payee?pa=&p n=&mn=&tid=&type=&vali ditystart=&validityend=&am =&amrule=&recur=&recurv alue=&recurtype=&tr=&url =&cu=&mc=&tn=

21. Comparison Table (Annexure attached for detailed cost analysis) Basis
UPI 2.0 API
PayU
Paytm
RazorPay
Savings in transaction cost
Yes No
Improved UX
Improved Customer Support
Advanced Automation
Annexure: Document that I made has all the details of costing. If we have time, we will share about PayU, Paytm, RajorPay briefly for 2-3 mins. And show them a glimpse of cost sheet.

22. Thank you