Reserve Bank of India Invites Applications for Innovative Payment Solutions

India’s central bank The Reserve Bank of India has invited applications for “Payment System Innovation Awards” to encourage innovative solutions in the field of Payment and Settlement System. With this initiative, the RBI is hoping to transform the way transactions are processed in the world’s fastest growing emerging economy.

Some broad areas which the contest will hope to cover are:

  • Payment security including fraud prevention
  • Customer convenience and cost reduction
  • Mobile payments
  • Acceptance/electronic payment infrastructure
  • Use of emerging technologies for payments

The Institute for Development and Research in Banking Technology (IDRBT), which is the technology arm of the RBI, will organize the competition. A panel of experts will shortlist the most innovative applications, and the best three will be rewarded with citations/prizes. The winners may also be given a chance to present their ideas/ technologies to the industry representatives.

Chairman of mobile payment company Novopay Srikanth Nadhamuni told Business Standard,

I think it’s a very good idea to do that. The central bank and regulator when they show interest in innovation in the FinTech space, it sends the right message that they want innovative solutions in financial services and banking and that’s a very good message to send out to companies.

Among the most revolutionary technologies that are disrupting the payments sector is the blockchain technology, which is the technology underpinning the cryptocurrency bitcoin. The blockchain is able to serve the crucial purpose of cutting down transaction costs while facilitating fast, reliable, and secure payments.

The initiative by the central bank will also lend confidence to the cryptocurrency businesses in India as the regulator has often maintained a cautious stance on the digital currencies.

RBI has already issued new licenses to 10 small banks and 11 payment banks that would use technology to disrupt banking. India has been lagging behind in the fintech race, but similar initiatives may catapult the nation to a higher spot.