Study Notes on Digital Payments for UGC NET Part-2

By Tanuj Bansal|Updated : February 3rd, 2020


In continuation of the previous article Study Notes on Digital Payments for UGC NET Part-1, here is the second part


I. Immediate payment service (IMPS)


It is an instant real-time payment service which helps customer to transfer money anytime and anywhere in India. This service is similar to NEFT & RTGS and available 24/7 throughout the year including bank holidays. This service is offered by National Payments Corporation of India (NPCI).

The benefits of IMPS -

  • Instant money transfer.
  • Available 24 x7 (functional even on holidays)


  • To transfer fund, account number & IFSC code of Payee is needed.
  • This facility is available in internet banking of every bank. 

J. Interbank Mobile Payment Service (IMPS) 


It is an instant interbank fund transfer service in which mobile phones are used as a channel through which transaction happens with the use of Mobile Money Identifier(MMID). For each account, MMID is generated by the bank and it is linked to the registered mobile number. Now, account details are fetched from MMID and via registered mobile number transaction occurs.


  • To transfer fund, only MMID and Registered Mobile Number of Payee is needed.
  • The account number and IFSC code are not required for fund transfer.  
  • Mobile Money Identifier (MMID) is a 7digit number which is issued by banks.
  • IMPS is functional through the National Financial Switch (NFS) of NPCI, which is also used for routing ATM transactions.

 The benefits of IMPS -

  • Instant money transfer.
  • Available 24 x7 (functional even on holidays)

 K. *99# Service


It is a mobile banking facility which is based on Unstructured Supplementary Service Data (USSD). With the help of this service, a bank customer can perform financial activities by just dialling *99# from his/her mobile registered with the bank. *99# is a common number across all Telecom Service Providers (TSPs). The service works across all GSM service providers and handsets.


  • *99# service was dedicated to the nation by the Prime Minister Narendra Modi on 28th August 2014 as part of Pradhan Mantri Jan Dhan Yojana (PMJDY).
  • The main objective to launch this service is to promote financial inclusion by providing banking services to every common man across the country.
  • This service is offered by National Payments Corporation of India (NPCI).

About Unstructured Supplementary Service Data (USSD) – USSD allows transmission of information through a GSM (Global System for Mobile Communications) network. It is used to send a text message between a mobile phone and application program in the network. At present, it is one of the best accessible communications technology to deliver mobile financial services to low-income customers.

Key Features –

  • This service works without Internet
  • Available through a common code *99# across all TSPs
  • Available 24 x7 (functional even on holidays)
  • No extra fees in roaming for using the service
  • Works across all GSM service providers and mobile handsets
  • No need to install any application on a mobile handset to use the service

L. Aadhar Enabled Payment System (AEPS)

It is an Indian payment system which is based on the unique identification number, the AADHAAR. The system allows a person holding an Aadhaar number to carry out financial transaction on a Micro-ATM provided by the Banking correspondent. It is developed by National Payments Corporation of India.

M. Aadhaar Payments Bridge System (APBS)

It is a payment gateway platform used for Aadhaar schemes. Under this facility - Aadhaar number used as a central key for electronically channelizing the Government subsidies and benefits in the Aadhaar Enabled Bank Accounts (AEBA) of the intended beneficiaries. It is developed by National Payments Corporation of India. It was used for the first time on 1 January 2013 when Direct Benefit Transfer was launched by Government of India.

Note: Various schemes include - social security pensions, payments under the employment guarantee scheme, public distribution system, and Janani Suraksha Yojana, and scholarships will be covered under the Aadhaar Enabled Payment System, etc.



Bharat Interface for Money (BHIM) is an instant payment application which allows users to transfer fund with the help of a mobile phone. It is based on the Unified Payment Interface (UPI) and developed by National Payments Corporation of India (NPCI). The Prime Minister Narendra Modi launched BHIM app for Android and iOS devices on 30th Dec 2016 at the Digi Dhan Mela event in New Delhi.

Key Features of BHIM App -

  • You can transfer money to any bank account.
  • No need for activating ‘internet banking’ to use BHIM APP.
  • You can transfer money to a person using his mobile number.


1. UPI PIN – It is a four or six-digit number which is set by the users itself on BHIM after the registration process. UPI PIN is used for authenticating all transactions done on UPI platform (BHIM or *99# or UPI apps).

2. VPA -  Virtual Payment Address (VPA) is a unique identifier which you can use to send and receive money on UPI.

How can you send money on BHIM? Users can send money by using one of the following details of the beneficiary.

  • VPA ( Registered on UPI)
  • Mobile No. ( Registered on UPI)
  • Aadhaar Number ( Should be linked to a bank account)

Some of the Banking & Financial terms used in Digital Banking 

  • AEPS – Aadhar Enabled Payment System
  • APBS – Aadhar Payment Bridge System
  • BBPS – Bharat Bill Payment System
  • BHIM - Bharat Interface for Money
  • CBS – Core Banking System
  • CIDR - Central Identities Data Repository
  • CTS – Cheque Truncation System
  • DNS - Domain Name System
  • EFTPOS - Electronic funds transfer at point of sale
  • HCE - Host Card Emulation
  • IFSC - Indian Financial System Code
  • IMPS - Immediate Payment Service 
  • IMPS - Interbank Mobile Payment Service 
  • MMID - Mobile Money Identifier
  • MPIN - Mobile Personal Identification Number
  • NPCI - National Payment Corporation of India
  • NFS – National Financial Switch (NFS)
  • NACH – National Automated Clearing House 
  • NEFT – National Electronic Fund Transfer
  • NFC - Near field communication
  • PAC - Personal Access Code
  • PSPs - Payment Support Providers 
  • RTGS – Real Time Gross Settlement
  • USSD - Unstructured Supplementary Services Data
  • UIDAI - Unique Identification Authority of India
  • VPA - Virtual Payment Address





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