India $5 Trillion Economy


RBI Adds Four Startups To Its Retail Payments Regulatory Sandbox

  • The four new startups include ToneTag, CityCash, Ubona Technologies, and Enroute Technologies.
  • Last month, RBI had added two startups Natural Support Consultancy Services and Nucleus Software Exports to its regulatory sandbox program.
  • To date, It has added a total of six startups to its program.

The Reserve Bank Of India (RBI), on December 24, has added four more fintech startups in the first cohort on retail digital payments to its regulatory sandbox program.

The four fintech startup includes Bengaluru-based ToneTag, Mumbai-based PoS smart card provider CityCash, Bengaluru-based Biometrics Authentication startup Ubona Technologies, and Delhi NCR-based Centric Payment Company Eroute Technologies.

The Regulatory Sandbox is a framework set by the Reserve Bank Of India (RBI) in which the selected companies conduct product experiments in a controlled environment under a regulator’s supervision.

Once the selected companies’ tests achieve success within the protected environment, the system will be allowed to be tested with the banks and consumer data.

Last month, RBI had added two startups — Jaipur-based Natural Support Consultancy Services, and Delhi-based Nucleus Software Exports in the cohort.

Natural Support Consultancy Services product  ‘eRupaya’ is a set of Near-Field Communication (NFC) based Prepaid card and NFC enabled Point of Sale (PoS) device, to facilitate offline Person-to-Merchant (P2M) transactions and offline digital payments in remote locations.

While the New-Delhi-based Nucleus Software Exports has proposed an offline digital cash product, ‘PaySe’, which will help connect with rural areas for e-payments. The product proposes to help in the digitization of payments in rural areas, starting with Self Help Groups (SHG), through an offline payment solution and a digitized SHG-centered ecosystem.

Under the first cohort of Regulatory Sandbox, both earlier selected fintech firms began testing their products on November 16, 2020. While the four new fintech firms selected for the ‘Test Phase’, and have started testing their products.

ToneTag (Brand of Naffa Innovations Pvt. Ltd.) product is an offline, feature phone-based UPI payment solution for P2M transactions over ‘sound medium’ by establishing a secure channel for data transfer over Interactive Voice Response (IVR) between devices. The product enables contactless payment even without the internet.

CityCash (Tap Smart Data Information Services Private Ltd.) product is a set of Near-Field Communication (NFC) based Prepaid card and NFC enabled Point of Sale (PoS) device, to facilitate offline Person-to-Merchant (P2M) transactions. The card can be used as a travel pass and wallet to pay for the purchase of bus tickets as well as payment at select merchants.

Ubona Technologies proposed a voice-based UPI payment solution that facilitates offline Person-to-Person (P2P) and P2M transactions using mobile phones including feature phones. The product also offers the convenience of the preferred Indian language to the customer through IVR, making adoption of digital transactions user friendly.

Noida-based Eroute Technologies product is UPI based offline payment solution using SIM overlay smartcard placed on the SIM to drive SIM Tool Kit (STK) menu-based user interface to facilitate P2P/P2M transactions. This product offers a payment solution to non-internet connected feature phone users.

The Reserve Bank Of India (RBI) has been focusing on pushing innovation in the offline/online payments space since the regulator believes that rural payments can be digitized through contactless and NFC mechanisms.

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