national payments corporation of india ( npci ) have set up world - class payment infrastructure for securities and retail segment respectively. these two institutions have emerged as the bedrock of our payments innovations in wholesale and retail payments. a decade back, it would have been hard to imagine a mobile phone becoming such a powerful and broad - based medium of doing payment transactions. the launch of unified payments interface ( upi ) in 2016 has revolutionised the payments ecosystem with about 803 crore transactions3 worth 13 lakh crore processed in january 2023 alone. for indians, banking facilities are available at their fingertips today. we have moved far beyond doorstep banking. further, given the importance of remittances received from indian diaspora abroad, money transfer service scheme ( mtss ) operators form a significant section of psos. prepaid payment instrument ( ppi ) issuers have become a part of daily life for many indians. the facility provided by white label atm operators ( wlaos ) and instant money transfer ( imt ) operator have helped in expanding the avenues for cash 1 / 5 bis - central bankers'speeches withdrawal. psos operating in niche segments like national electronic toll collection ( netc ), bharat bill payment operating units ( bbpous ) and the newest entrants – payment aggregators ( pas ) – are bringing ease of living to the segments they cater to. last but not the least, trade receivables discounting system ( treds ) platforms have enabled factoring of msme receivables in a transparent and competitive manner, thereby improving the liquidity position of msmes. on an average 35, 000 factoring units ( fus ) 4 worth 7, 200 crore are discounted or financed in treds every month. 4. the reserve bank has also taken a number of steps to increase safety and security of payment transactions as well as the ecosystem. introduction of additional factor of authentication ( afa ) for card - based e - commerce and online transactions, which was later extended to other payment modes and channels, is a success story in indian payment systems. simple measures like provision of switch on / switch off facility for card transactions have positively impacted the trust of cardholders in digital payments. in all these initiatives, the reserve bank has kept customer convenience and safety as the prime objective. other examples could be contactless card transactions, offline payments framework, e - mandate based transactions, card - on - file tokenisation ( coft ), etc. 5.

financing products to obviate the problem of delayed payments of msme. the mechanism may prove complementary to the treds platform and would further alleviate the problem of delayed payments. v. way forward 20. as the msme sector holds immense potential, the need is to have a right set of policies and enabling framework which guide and support msmes to effectively handle their existing problems and venture into new areas. while both the government and the rbi have introduced a plethora of measures for improving access to finance and to promote growth of the sector, the small size of individual units and informal nature of the sector continue to pose challenges. 21. the traditional bank lending system by banks is based on financial statements and collateral of the borrower. with increased availability of data from several sources, including gstn, income tax, credit bureaus, etc., it is now possible to appraise the msme loan proposals expeditiously by doing due diligence online. further, with the help of account aggregators ( aa ), lenders will have access to potential borrower ’ s financial information at a single point, of course, with his / her consent. furthermore, emergence of fintech companies has made it possible to assess credit worthiness of msmes by utilising unexplored data sources such as digital transaction trails, data generated through e - commerce sites, etc. some lenders are collaborating with fintech companies to take advantage of such surrogate data for speedier credit underwriting for extending loans to msme sector. these new architectures would expand the reach of credit. 22. while the new models are beneficial for those units which are digitally active, a large segment of msme units access credit through traditional lending models. while micro enterprises act as a starting stage of entrepreneurship that requires low investment in technology, units graduating to small and medium enterprises have to enhance their technical capacity and explore newer markets in order to stay competitive for sustainable growth. recent policy efforts will provide an enabling environment and facilitate the msme sector seize the new emerging opportunities. i must add that as a regulator, we in rbi have to safeguard financial stability while ensuring wider access to finance. banks and other players on their part have to ensure prudent lending. 23. besides, we in rbi have started launching cohorts under the regulatory sandbox. first such cohort was launched in november 2019 with the theme of ‘ retail payments ’ to spur innovation in digital payments space to design and