- Positive Pay System
- Working method of Positive Pay
- Importance of Positive payment system for customers
- Operationalization of PPS
- Implementation of PPS
Positive Pay System
The Positive Pay System, developed by the National Payments Corporation of Bharat, could be a method of reconfirming the key details of huge worth cheques. Below this method, someone who provisions the high-value cheque submits bound essential details of that cheque like date, name of the beneficiary/payee quantity, etc. to the payer bank. The main points may be submitted through electronic suggests such as SMS, mobile app, web banking, ATM, etc. the main points are cross-checked whereas provision of the cheque and any discrepancy are flagged.
Working method of Positive Pay
According to the tally, whereas most retail shoppers choose to use electronic alternatives like NEFT and RTGS, cheques are still a preferred possibility currently. Before you issue a cheque, you would like to share cheque details like the name of the receiver, issue date, and quantity and send it to your bank via email. Once the cheque is given to the bank for payment via CTS clearing, the bank can compare the instrument details received against the main points you send. Just in case of any mate, the bank might review it for appropriate action.
Importance of Positive payment system for customers
Some banks are telling customers that if the main points of large-value cheques don’t seem to be pre-registered, the cheque is going to become, unpaid. On issuing a high-value cheque, customers ought to make sure that details are provided inside the timeframe prescribed by the banks for hassle-free clearance. Tally has aforementioned sole cheques that are registered within the Positive Pay System are going to be accepted below the dispute resolution mechanism. Customers would get an SMS on whether or not the cheque is accepted or rejected for any reason.
Operationalization of PPS
Operationalization of PPS is thru CTS whereas even outside the CTS system, it may be used.
CTS is a digital innovation:
CTS is the method of stopping the flow of the physical cheque issued by a drawer at some purpose by the presenting bank en route to the paying bank branch. In its place picture of the cheque is transmitted to the paying branch through the financial organization, besides relevant info like knowledge on the Ink Character Recognition (MICR) band, date of presentation, presenting bank, etc.
Cheque truncation so obviates the requirement to the physical instruments across bank branches, aside from in exceptional circumstances for clearing functions. This effectively eliminates the value of movement of the physical cheques, reduces the time needed for his or her assortment, and brings speed and potency to the whole activity of the cheque process. Additionally to operational potency, CTS offers many edges to banks and customers, as well as optimization within the preparation of resources in cheque clearing activities, value effectiveness, business method re-engineering, higher service, adoption of the latest technology, etc. CTS, thus, has emerged as a crucial potency sweetening initiative undertaken by tally within the Payments Systems arena. PPS is one more general improvement by strengthening authentication in a cheque payment system to forestall frauds. Since solely CTS 2010 compliant instruments may be given for clearing through CTS, member banks might implement similar arrangements for cheques cleared or collected outside CTS moreover. The CTS transactions in Bharat are growing month by month. It recorded 89.67 million cheque-based transactions that are routed through it within October 2019 with a growth of 8.49 per month over month.
Implementation of PPS
PPS was to be enforced from Gregorian calendar month one, 2021 however since it’s the choice of shoppers, the theme was unrolled with additional and additional customers enrolling for it. Tally recommended that awareness was to be created among customers explaining the protection aspects of PPS so customers build use of the secured system. To create the new system work, the tally can settle for cheques that are registered in PPS below the dispute resolution mechanism. Others won’t be amused. If customers are keen to use RBI’s dispute resolution mechanism, they have to want it.
The only constraint may well be the doable large-scale rejection of cheques by CTS if details don’t reach the bank or they are not tallied. The non-payment of cheques might result in jeopardizing the name of the shoppers. The shoppers choosing it’s to stay a mechanism of providing details to the bank as a system alternatively there’ll be operational constraints. Banks are bit by bit moving towards creating it obligatory for top worth cheques of Rs.5 lakhs and on top of. Except for business Rs. 5 lakhs isn’t an enormous quantity and a heap of cheques is going to be issued that info needs to flow to the bank for honouring the payment. RBI, NPCI, Banks, and customers ought to work along to harness the deserves of the well-thought-out PPS to guard checking account holders.