LPSS: How Is RBI’s New Digital Payment System Going To Be Revolutionary?
RBI’s new digital payment system LPSS (lightweight payment and settlement system) is able to protect payments against digital attack & natural disasters.
The Reserve Bank of India (RBI) is developing a new digital payment system called the LightWeight and Portable Payment System (LPSS).
The purpose of this system is to enable consumers to make digital payments even during emergencies like wars or natural disasters.
The LPSS aims to ensure that there are no obstacles to digital payments, providing uninterrupted access to essential payment services.
One of the main benefits of the LPSS is its ability to operate in emergency situations. Unlike the existing payment systems such as –
- Real Time Gross Settlement (RTGS),
- National Electronic Fund Transfer (NEFT), and
- Unified Payments Interface (UPI),
They may face challenges during emergencies due to infrastructure limitations, the LPSS is specifically designed to function in such scenarios.
It can help maintain the liquidity pipeline of the economy by facilitating uninterrupted functioning of essential payment services like bulk payments, interbank payments, and provision of cash to participant institutions.
The LPSS is described as a lightweight and portable system, requiring minimal hardware and software. It is a mobile system that can be easily adapted to changing circumstances.
This flexibility allows users to make digital payments seamlessly, even in emergency situations. By providing a reliable and accessible payment system during crises, the LPSS ensures that individuals can continue to transact digitally when traditional payment methods may be disrupted.
The introduction of the LPSS also addresses the need for a payment system that can function independently of existing networks and infrastructure.
The system is designed to complement the current payment platforms in the country, offering an additional layer of resilience and reliability.
By developing this new system, the RBI aims to reduce downtime in the payment and settlement system, ensuring near-zero disruption during emergencies.
The LPSS offers significant benefits in terms of resilience, accessibility, and continuity of digital payments.
It serves as a backup system that can operate in adverse conditions, allowing individuals and businesses to continue transacting digitally, even in the face of emergencies.
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