The endeavour is part of the first phase of the Reserve Bank of India’s retail central bank digital currency pilot. For its in-store digital rupee test, IDFC First Bank will leverage POS technology provided by sound-based payments solution provider ToneTag. As for trial online retail transactions, they will be processed via the CCAvenue Indian digital payments gateway.
CCAvenue officials cited by nfcw.com highlighted how easy it is for merchants to accept digital payments, particularly since the central bank digital currency is a legal tender and shares similarities with conventional paper currency.
In order to pay using CBDC, customers that reach the CCAvenue checkout page can scan a unique QR code from their digital wallet bank app issued by the participating banks. Once they perform the scan, the digital rupee is transferred from the customer’s digital wallet to the merchant’s digital wallet.
Reliance Retail was the first merchant to confirm its participation in the trial. Customers from a closed user group test will be able to make QR code payments using the digital rupee at Freshpik gourmet food stores with support from ICICI and Kotak Mahindra. Kotak Mahindra Bank officials revealed that they will invite a limited number of customers with Android devices to download the digital rupee app and open digital wallets linked to their bank accounts.
The Reserve Bank of India’s retail segment pilot is named Rupee-Retail and it launched on 1 December 2022 targeting a closed user group of participating customers and merchants. According to pib.gov.in, there are 8 banks that are suited for phase-wise participation in the retail pilot project, including the State Bank of India, the ICICI Bank, the Yes Bank and the IDFC First Bank, all of which are expected to participate in the first phase.
The second phase of the pilot will involve the Bank of Baroda, the Union Bank of India, the HDFC Bank, and the Kotak Mahindra Bank. The retail version of the CBDC is taking on the form of a digital token that represents legal tender, and it is being issued in the same denominations as paper currency and coins.
The token can be distributed through financial intermediaries, and users can perform Person to Person (P2P) and Person to Merchant (P2M) transactions with the digital rupee through digital wallets offered by the participating banks.
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