The Reserve Bank of India's (RBI's) proposal to introduce lightweight payment and settlement system (LPSS) aims to keep the liquidity pipeline of the economy intact. By providing near-zero downtime, it will facilitate transactions that are critical with uninterrupted essential payment services, such as bulk payments, interbank payments in extreme situations, as per RBI.
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It will be designed to be resilient in catastrophic conditions when conventional payment systems like UPI, IMPS, NEFT are temporarily unavailable due to any disruptions in the information and communication infrastructure.
“It is prudent to be prepared to face such extreme and volatile situations. Keeping this objective in mind, the Reserve Bank has conceptualised a lightweight and portable payment system that will be independent of conventional technologies and can be operated from anywhere by a bare minimum staff,” the central bank said in its Annual Report 2022-23.
Unlike traditional payment systems that are designed to handle large volumes, Amit Kumar, Chief Technology Officer, Easebuzz said this resilient system will be built to be operated for any volatile situations and can be operated on minimalistic hardware and software platforms and can be operated with minimal staff from anywhere.
"This portable system will ensure user faith in financial payment structure even during extreme conditions," he told CNBC-TV18.com.
On how it will work, Ashwin Chawwla, Founder and Managing Director, Escrowpay said it will introduce a streamlined and agile approach to transactions, fundamentally transforming how we engage in digital value exchange.
"At its core, a lightweight payment system will prioritise simplicity, speed, and efficiency. It will harness advanced technology and innovative protocols to eliminate unnecessary complexities, offering users a seamless and hassle-free payment experience," he said.
This will not only enhance user convenience but also facilitate swift business transactions, particularly in time-sensitive situations. Additionally, lightweight payment systems will be characterised by their minimalist infrastructure and low resource requirements.
They will be meticulously designed to operate seamlessly, even on networks with low bandwidth, ensuring widespread accessibility and inclusivity. Consequently, individuals residing in remote areas or regions with restricted connectivity will now have the opportunity to participate actively in the digital economy, as per RBI.
First Published: Jun 19, 2023 5:32 PM IST
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