UPI Payment Gateways & Data Distribution
A brief overview over working of Digital Payment Gateways.
In order to improvise marketing sector and make payments more reliable and quick, NPCI (National Payment Authority of India) has came up with an idea of digital UPI Payment(Unified payment Interface), and this concept has gained a lot popularity now.
Several UPI payment apps are available now on play store which takes care of the transaction digitally and works as the digital payment tool dealing with various payment gateways(Payment gateways are a means to receive or make the payments).
All the transactions taking place are authorised by central authority of NPCI and the payment gateways of individual banks are collaborated. Obviously those things are hidden from the user and user is given a healthy and secure environment which is protected using two step verification.
Working of UPI payment gateways-
UPI payment system is token based system which uses tokens instead of actual cards.
- Tokenizing customer card- Whenever we add any card (Debit card, Credit card) to the UPI facilitated app. A token is generated and issued. The token may be called as UPI-id. The payment app take reference of this token for further transaction.
- Merchant receives token- And when we request for a transaction, the device sends token to the merchant payment gateway. The token has some expiry date. If the payment is not processed within the time limit, the token gets expired.
- Processing Payments- The merchant uses card data to process payment through acquiring bank. And the respective bank processes the payment using appropriate payment network.
- TSP translates the token- The TSP(Thin Security layer Protocol) validates the token and converts into the customers actual card number.
- Authorisation- The cad issuing bank completes account level validation and authorisation checks and sends authorisation response to the network.
- Notifying transaction status- The network passes the authorisation response through acquirer to your point of sell and finally to the customer. The payment terminal shows failure or success message.
In digital payment gateways, the time taken in processing request is saved and as a result transaction are made faster. Moreover the UPI id is used as key tool for verification.
Data distribution in payment systems-
All the data regarding transactions, credit card, debit card credentials etc. are stored in the Bank servers and data centres.
The app servers also store the data at their data centres which would have increased threat to the data security but NPCI has put restriction on storing data at the data centres located outside of the India.
In most of the cases, the banks have their own data centres where they store data. But banks of the small scale can’t afford the cost of setting up and managing the data centres, so they normally opt for distributive cloud banking.
Consider an analogy, A corporate company which hosts its own server on cloud and different sections in that company like web designing section, marketing section etc. host their separate server which is hosted under the authorisation of main server. Now the respective employee can only deal with the respective server not the main server. Like this way, the load on the one central server is reduced.
Same concept is also followed in the banking system. The transaction request which you put through your UPI payment gateways deals with only the respective bank server. All the process taking place further is completely secured and hidden from the user. Furthermore the centralisation of data is avoided in order to escape from rush and bottleneck. Banking system often go for data distribution.
For example, when a person having bank account in the SBI bank Sangli, sends token to the respective bank via google pay, The account data is fetched from that respective bank server only which is hosted in the cloud under the main SBI server.
Data distribution has increased ease in handing data and has increased efficiency and speed as far as payments are concerned.
