GEOTAGGING OF PAYMENT SYSTEM

TOUCH POINTS AND ITS BENEFITS

RBI’s geo-tagging framework focusses on deepening digital payments and providing

inclusive access to all citizens
What is Geo-tagging of payment system touch points?
Geo-tagging refers to the process of adding geographical identification to a media
based on the location of smart phones or GPS-enabled electronic devices. Geo-tags
can be applied to media such as photos, videos, websites, text messages and QR
codes. Last week, the Reserve Bank of India issued a framework for geo-tagging of
payment system touch points, which simply means capturing the geographical
coordinates (latitude and longitude) of various touch points deployed by merchants to
receive payments from their customers.
Why is it important?
From cash as the primary mode of payment and usage of debit/ credit cards at
merchant locations, the Indian payments ecosystem has rapidly evolved in recent
years with widespread adoption of multiple payment products and systems, including
Point of Sale (PoS) terminals, Quick Response (QR) codes, prepaid payment
instruments (PPIs), net banking transfers, Immediate Payment Service (IMPS),
Unified Payment Interface (UPI) and Aadhar-enabled Payment Service (AePS).
Smartphone and internet penetration has led to proliferation of digital payments in the
country. According to data from the National Payments Corporation of India (NPCI),
UPI-led digital transactions crossed the highest-ever value of Rs 81-lakh crore with
5.42 billion transactions in FY22. However, a large number of people, especially in
the rural parts of the country, continue to use cash as the primary mode of transaction.
RBI’s geo-tagging framework focusses on deepening digital payments and providing
inclusive access to all citizens, irrespective of their location or digital literacy.
How does it work?
The central bank has categorized ‘Banking infrastructure’ and ‘Payment acceptance
infrastructure’ as two categories of physical infrastructure through which digital
payment transactions are carried out. Banking infrastructure covers payment
transactions made through bank branches, counters, ATMs and Cash Recycle
Machines (CRMs), among others. While PoS terminals, QR codes deployed by
banks / non-bank Payment System Operators (PSOs) come under payment acceptance
infrastructure. The RBI framework mandates that banks and non-bank PSOs should
maintain a registry with accurate location of all payment touch points across the
country. The registry must contain merchant-related information such as the merchant
name, ID, type, category, contact details as well as location details such as address
and state, district. Banks and non-bank PSOs must also report payment acceptance
infrastructure details such as the terminal type, terminal ID, terminal address, state,
district and geo-coordinates.
How will it benefit banks and players in the payment ecosystem?
By capturing the accurate location of various payment system touchpoints, banks can
get insights on regional penetration of digital payments, monitor infrastructure density
across different locations, identify the scope for deploying additional payment touch
points, and facilitate focused digital literacy programmes. The data collected through
geo-tagging will also help the central bank bring suitable policy interventions
wherever required.
When will it be implemented?
All banks and non-bank PSOs are required to report information on payment system
touch points through the RBI’s Centralized Information Management System (CIMS).
However, the central bank is yet to communicate the timeline for commencement of
reporting. For now, the RBI has asked banks and non-bank PSOs to submit the contact
details of the nodal officer for this activity by March 31, 2022.