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Invisible Money, Visible Change

How Digital Payment System Platforms Have Transformed India’s Financial Landscape

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So, imagine this. A pandemic strikes and forces India to pull down its shutters overnight. Shops, roads, businesses, travel – just about every movement in real life freezes. Everyone’s bolted in – family, friends, and their families too. Everyone, except the money. That stays on the go, in a series of cashless transactions. 

You don’t see it but it’s moving – it’s paying your bills, your loan instalments, and insurance premiums. It’s buying your groceries online. Some of it is going into a Plan B safety nest to counter any lockdown emergency. You aren’t writing cheques, and you’re certainly not using your wallet to hand out cash. But the money … it’s invisible, moving, and working for you.     

The last few years have seen a technological reimagination of the way funds zig zag through the Indian economy -- across its trade, industry and people.  Technology platforms serve as the plinth on which rest digital payment systems such as RTGS (Real-time Gross Settlement) and NEFT (National Electronic Funds Transfer). These digitized systems move money invisibly through an intricate and precise payment network; a network whose usage became more pronounced than ever during the pandemic that started in the early months of 2020.  

Tech-Enabled Financial Infrastructure

The Reserve Bank of India (RBI), India’s central bank, maintains NEFT 24x7 on an encrypted, secure, resilient TCS Digital Funds Transaction Platform. The electronic medium connects over 220 Indian member banks to each other and enables seamless and near instantaneous money transfers anytime, anywhere. Fun fact: There are 2.2 million such digital transactions carried out every 30 minutes via the platform.   

Technology driven by TCS also runs RBI’s RTGS, strengthening India’s financial system with real-time settlements in sub-seconds. The highly secured TCS SFMS (Structured Financial Messaging System) platform connects over 165 banks and clearing houses in India via the RTGS funds transfer channel. The cashless payments platform enables a fully automated settlement of RTGS transactions and is scalable to the extent that it can handle five million such electronic transactions in a single day. What this means is that one can request a movement of funds from one account to another such that the digital payments system picks up the request, transports the funds, and sees the process to closure with a confirmation to the originator of the transfer – you – in a matter of minutes. Imagine the capability of a digital platform that can handle five million such transactions in a 24-hour period. This electronic transfer of funds is boosting liquidity in the Indian banking system, given the fast and near failure-less nature of the transaction – all enabled by digital technology.  

Operating on a separate digital payments plane for National Payments Corporation of India (NPCI) -- an umbrella organization for all retail payments in India -- is NACH or National Automated Clearing House. This centralized integrated digital web platform powered by TCS, provides end-to-end service to the institutional stakeholders in the financial ecosystem, which includes banks, financial services, corporates and government. The NACH platform is designed to support over 70 million digital transactions per day and is the technology on which pivot government social welfare programs such as PMKISAN, PM Jan Dhan Yojana, and MGNREGA, for agriculture, rural banking and rural employment, respectively. Other key functions NACH enables include on-time seamless salary transaction for all government and private employees, and timely pension credit for millions of recipients across India.  

This invisible movement of funds has translated to real visible change in a nation’s economy, empowering its people and businesses. Digital payment systems have emerged as the spine of the Digital India movement -- a movement led by technology, and with TCS on its frontline. 

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