On January 6, 2020, National Payments Corporation of India (NPCI),an umbrella organisation for operating retail payments has launched blockchain technology based “Vajra Platform” to make payments fast & secure.Key Points:
i. Vajra: The new platform Vajra, which is based on the Distributed Ledger Technology (DLT),has been designed with the aim to offer automatic clearing and settlement of payments on NPCI products such as unified payments interface (UPI) and Rupay card & will significantly reduce the need for manual reconciliation.
It uses a permissions model in order to ensure that only approved parties are a part of the network. It can be accessed by various payments companies. After getting the approval, the firms can install it by using an application programming interface (API) provided by NPCI.
ii.Benefits: All the transactions undertaken by Vajra Platform using DLT follow real-time clearing and settlement.
Especially, the DLT usage in payments will ensure minimal reconciliation of transactions, which will in turn provide higher efficiencies through automation and transparency. It also helps to reduce the whole charges incurred in operating transactions.
The blockchain-based technology in Vajra will help in Aadhaar authentication by the Unique Identification Authority of India (UIDAI).
In order to protect the data, the blockchain technology based payments uses cryptography security, which is a technology which protects information by converting it into some codes, which can be accessed and read by only authorised firms.
Further, the transparency in DLT platform also helps to track & resolve complaints easily.
Privacy for payment transactions will be ensured under this platform by the way it encrypting them into digital signatures,thus preventing unauthorised firms from reading or corrupting transaction data.
About National Payments Corporation of India (NPCI):
Headquarters– Mumbai, Maharashtra
MD & CEO- Dilip Asbe