Regulation Of Activities Of Payment A: Fill & Download for Free

This is a pretty wide open question. Will try to answer as much as I can. I've included more visual versus text, as visuals can very easily get the point across, in a few minutes. Should you wish to explore further, I have provided some relevant links for further reading.First of all, the definition. When discussing payment systems, it is so easy to have different understanding of what a payment system is.WHAT IS A PAYMENT SYSTEM?a payment system consists of a set of instruments, bankingprocedures and, typically, interbank funds transfer systems thatensure the circulation of moneyGlossary definition from the Committee on Payment and Settlement Systems (BIS - Bank of International Settlements). See glossary at: http://www.bis.org/publ/cpss00b.pdf (March 2003)In its basic form a payment ecosystem has this very important singular relationship, without which a payment cannot be made:The whole concept of a "payment" is to exchange money between two parties, so hence the Payer and Payee concept.*Barring Bitcoin, regulated money (which is what 99.999+% of us use) requires a bank. It is not necessarily that a bank is required to move money, but a Bank is at the core, for example in Cash-to-Cash transaction, whilst a bank is not involved, a Bank was the source of the cash and could very well be the destination of cash as well (if) and when it gets deposited.The definition of a Payment System can be visualized as follows:The Payment Instrument section above can be expanded as:Central to all this is the Bank, and how the bank interacts with various entities would be explained below. First, you have to understand with whom a commercial bank can interact with:The above essentially represents the eco-system in which a commercial (non-investment bank) is operating in. The ovals in purple, represents the various verticals a bank can choose to associate themselves with and work in/with.A slightly wider view of the same would be:Credit: Above visuals are extracted from the presentation "An Introduction of Payment Systems" by Dyah N.K. Makhijani, Bank Indonesia. Source: http://www.bi.go.id/NR/rdonlyres/10122ACC-8ACC-41E1-91EA-94F3D98B874F/14130/AnIntroductiononPaymentSystem.pdfAs far as Banks are concerned, there are many types of banks, below is a pictorial representation of the different types of banks:PAYMENT SYSTEMS LAYER (REGULATORY)In most cases, a payment's ecosystem has a hierarchy of how the central bank is, then commercial banks, the payments layers and companies that work with the payments layer (as one of the examples, here is how a payments system hierarchy looks like for startups in a particular model that I was trying to demonstrate):The concept shown in the above diagram in a rudimentary form was to show that in most cases, Startups work with a Payment Service Provider who work with Banks, who are regulated by the Central Banks.THE FINANCIAL SWITCH ECOSYSTEMThe Switch in the Payment's Ecosystem is extremely important, it is what allows for a lot of the connectivity and transactions routing/communication to go through.Below is an example what the transaction set of a unified switch would look like. Not every transaction set shown below has to be on the switch, this is just a unified example, it all depends from switch to switch and operators/usage of that switch.BANK TO BANK (SETTLEMENT OF FUNDS)One thing that confuses people a lot is how is the bank to bank settlement done?I wrote a detailed answer on this which can be read here: Faisal Khan's answer to How does the settlement of payments work in banks? Specifically, how do payment systems that are connected to multiple banks actually settle the amount between two banks?To better understand how money is actually transferred between banks and different countries, you would most likely want to read up on this: Faisal Khan's answer to How does money transfer between banks and different countries work?WIRE TRANSFERS - HOW DO THEY WORK?From a wire transfer point of view, what exactly happens when a Wire Transfer is made, please read this answer: Faisal Khan's answer to What exactly happens when a wire transfer is made? How does the money travel from the sender's account to the recipient's account? How much time does each step take? What regulatory measures are in place, if any?Even more important is to understand what exactly happens when a remittance transfer is made? What are all the steps involved in a money-transfer transaction: Faisal Khan's answer to How does a remittance money transfer work? What are all the steps and who is involved?PAYPAL WALLETBecause PayPal will so frequently be cited as an example, many people need to learn up as to what exactly PayPal is and how does money loading/off-loading on a PayPal wallet actually work?To understand how it all works, here is a detailed answer on how PayPal works: Faisal Khan's answer to What is a Paypal account? Is it a kind of bank account which is maintained for demand deposits? __ 𝐏𝐥𝐞𝐚𝐬𝐞 𝐂𝐚𝐥𝐥 PayPal 𝐓𝐨𝐥𝐥 𝐅𝐫𝐞𝐞 𝐒𝐮𝐩𝐩𝐨𝐫𝐭 𝐍𝐮𝐦𝐛𝐞𝐫 ☏+❶►❽❺❻▁❹❼❺►❷❺❺❺?WHAT HAPPENS WHEN YOU CHARGE YOUR CARD?From a merchant's POV, the payments ecosystem processing looks something like this:In a process flow, it would look something like this:Since everyone has a slightly different way of representing flows, here are a few more:and another one:Nomenclature aside, the key players/components are the same:Role of an Acquirer: the acquirer (Chase, First Data, etc) solicits, underwrites and owns the merchant account. They provide technology and hardware, which enables the merchant to process the transaction.Role of the Issuer: The issuer is the bank (Capital One, CIBC, RBC, etc) that provides the cardholder with their credit card. They bare the responsibility of approving the cardholder and billing and collecting the owed funds from cardholder.Credit Card Associations: Associations (Visa, MaterCard, AMEX, et) are commonly referred to as the credit card and debit card companies. The role of the associations is to govern the policies pertaining to their bank cards, monitor processing activity, and oversee the clearing and settlement of transactions. Currently VISA is the most popular association with approximately 65% transaction volume.ISOs (Independent Sales Organizations): ISOs (Payfirma, Square, etc) are organizations that partner with acquirers to open merchant accounts, handle support, manage payment processing, and build added-value technology on behalf of acquirers. ISOs do this in exchange for a percentage of the transaction volume.Merchant: The merchant is a business owner who submits a request to an ISO/acquirer for the ability to accept credit. Merchants are approved under the qualifications set by the associations and the policy of the underwriters.Cardholder: Cardholders (consumers) are customers of a bank that request a credit card. The cardholder will be approved by the issuer based on credit worthiness.Source: Payment Processing 101Here is a graph of how transfer fees in a credit card transaction works:A simple visual, to give you an example of some of the vendors involved:Juxtapose this to mobile payments, and it is inherently no different. Below visual shows the various types of payment systems.Here is another infographic on the mobile-payment ecosystem:On the product side of things, there is no one-product that fits, all, below is a rough representation of how the market segment that you will market to, look like:On the processing side, you might want to read this answers:How are credit cards validated and processed through providers such as Paypal and Square?How do credit card companies make money?How do payment gateways like authorize.net connect to credit card companies?One other link I would like to recommend to understand how consumers make choices as far as payment instrument of choice is concerned: The 2009 Survey of Consumer Payment ChoiceTo better understand the various payment systems - these two infographics are worth reading and are must-read/must-have.Evolution of Payments Market Map (2011)Mobile Payments and Banking Market Map (2012)Both these PDFs can be downloaded for free from: Downloads: Market MapsYou may also want to have a look at BIS (Bank of International Settlements), they have an excellent repository of reports (PDFs) on various payment systems around the world. Source: Payment and settlement systems in selected countriesThere is just so much information out there. Inbox me if you require more information.About the Author: Faisal Khan is a banking / payments consultant and digital money evangelist. He is the co-host of Around the Coin, a weekly podcast on banking, money and payments. He is also a frequent contributor to popular Q&A site Quora. His official website is at www.faisalkhan.com

This report surveys the legal and policy landscape surrounding cryptocurrencies around the world. While not dissimilar in form to the 2014 Law Library of Congress report on the same subject, which covered forty foreign jurisdictions and the European Union, this report is significantly more comprehensive, covering 130 countries as well as some regional organizations that have issued laws or policies on the subject. This expansive growth is primarily attributable to the fact that over the past four years cryptocurrencies have become ubiquitous, prompting more national and regional authorities to grapple with their regulation. The resulting availability of a broader set of information regarding how various jurisdictions are handling the fast-growing cryptocurrency market makes it possible to identify emerging patterns, some of which are described below. The country surveys are also organized regionally to allow for region-specific comparisons.Investing in cryptocurrency in general is a good business if you are on the right path and with the right platform. After so many failed attempt on getting the right platform, I came across CryptoExchangeFx Cryptocurrency Investment Platform (www.cryptoexchangefx,com) where i get 20% of every investment i made with cryptocurrency every 10 days. It looks to good to be true until i gave it a try and trust me it has been a smooth ride all the way. Don’t give up on cryptocurrency and join the platform. Trust me, you won’t care about the price fluctuation anymore. Thank me Later.Note: This is not in any case of me trying to lure you into anything for my own personal financial gain, i am just innocently sharing with you what works for me. You can also make a research on what works for you too.One interesting aspect of the fast-growing cryptocurrency market is the fluidity of the terms used to describe the different products that fall within its ambit. While the various forms of what are broadly known as “cryptocurrencies” are similar in that they are primarily based on the same type of decentralized technology known as blockchain with inherent encryption, the terminology used to describe them varies greatly from one jurisdiction to another. Some of the terms used by countries to reference cryptocurrency include: digital currency (Argentina, Thailand, and Australia), virtual commodity (Canada, China, Taiwan), crypto-token (Germany), payment token (Switzerland), cyber currency (Italy and Lebanon), electronic currency (Colombia and Lebanon), and virtual asset (Honduras and Mexico).One of the most common actions identified across the surveyed jurisdictions is government-issued notices about the pitfalls of investing in the cryptocurrency markets. Such warnings, mostly issued by central banks, are largely designed to educate the citizenry about the difference between actual currencies, which are issued and guaranteed by the state, and cryptocurrencies, which are not. Most government warnings note the added risk resulting from the high volatility associated with cryptocurrencies and the fact that many of the organizations that facilitate such transactions are unregulated. Most also note that citizens who invest in cryptocurrencies do so at their own personal risk and that no legal recourse is available to them in the event of loss.Many of the warnings issued by various countries also note the opportunities that cryptocurrencies create for illegal activities, such as money laundering and terrorism. Some of the countries surveyed go beyond simply warning the public and have expanded their laws on money laundering, counterterrorism, and organized crimes to include cryptocurrency markets, and require banks and other financial institutions that facilitate such markets to conduct all the due diligence requirements imposed under such laws. For instance, Australia, Canada, and the Isle of Man recently enacted laws to bring cryptocurrency transactions and institutions that facilitate them under the ambit of money laundering and counter-terrorist financing laws.Some jurisdictions have gone even further and imposed restrictions on investments in cryptocurrencies, the extent of which varies from one jurisdiction to another. Some (Algeria, Bolivia, Morocco, Nepal, Pakistan, and Vietnam) ban any and all activities involving cryptocurrencies. Qatar and Bahrain have a slightly different approach in that they bar their citizens from engaging in any kind of activities involving cryptocurrencies locally, but allow citizens to do so outside their borders. There are also countries that, while not banning their citizens from investing in cryptocurrencies, impose indirect restrictions by barring financial institutions within their borders from facilitating transactions involving cryptocurrencies (Bangladesh, Iran, Thailand, Lithuania, Lesotho, China, and Colombia).A limited number of the countries surveyed regulate initial coin offerings (ICOs), which use cryptocurrencies as a mechanism to raise funds. Of the jurisdictions that address ICOs, some (mainly China, Macau, and Pakistan) ban them altogether, while most tend to focus on regulating them. In most of these latter instances, the regulation of ICOs and the relevant regulatory institutions vary depending on how an ICO is categorized. For instance, in New Zealand, particular obligations may apply depending on whether the token offered is categorized as a debt security, equity security, managed investment product, or derivative. Similarly, in the Netherlands, the rules applicable to a specific ICO depend on whether the token offered is considered a security or a unit in a collective investment, an assessment made on a case-by-case basis.Not all countries see the advent of blockchain technology and cryptocurrencies as a threat, albeit for different reasons. Some of the jurisdiction surveyed for this report, while not recognizing cryptocurrencies as legal tender, see a potential in the technology behind it and are developing a cryptocurrency-friendly regulatory regime as a means to attract investment in technology companies that excel in this sector. In this class are countries like Spain, Belarus, the Cayman Islands, and Luxemburg.Some jurisdictions are seeking to go even further and develop their own system of cryptocurrencies. This category includes a diverse list of countries, such as the Marshall Islands, Venezuela, the Eastern Caribbean Central Bank (ECCB) member states, and Lithuania. In addition, some countries that have issued warnings to the public about the pitfalls of investments in cryptocurrencies have also determined that the size of the cryptocurrency market is too small to be cause for sufficient concern to warrant regulation and/or a ban at this juncture (Belgium, South Africa, and the United Kingdom).One of the many questions that arise from allowing investments in and the use of cryptocurrencies is the issue of taxation. In this regard the challenge appears to be how to categorize cryptocurrencies and the specific activities involving them for purposes of taxation. This matters primarily because whether gains made from mining or selling cryptocurrencies are categorized as income or capital gains invariably determines the applicable tax bracket. The surveyed countries have categorized cryptocurrencies differently for tax purposes, as illustrated by the following examples:Israel→taxed as assetBulgaria→taxed as financial assetSwitzerland→taxed as foreign currencyArgentina & Spain→subject to income taxDenmark→subject to income tax and losses are deductibleUnited Kingdom:→corporations pay corporate tax, unincorporated businesses pay income tax, individuals pay capital gains taxMainly due to a 2015 decision of the European Court of Justice (ECJ), gains in cryptocurrency investments are not subject to value added tax in the European Union Member States.In most of the countries surveyed for this report that have or are in the process of devising taxation rules, the mining of cryptocurrencies is also exempt from taxation. However, in Russia mining that exceeds a certain energy consumption threshold is taxable.In a small number of jurisdictions surveyed cryptocurrencies are accepted as a means of payment. In the Swiss Cantons of Zug and a municipality within Ticino, cryptocurrencies are accepted as a means of payment even by government agencies. The Isle of Man and Mexico also permit the use of cryptocurrencies as a means of payment along with their national currency. Much like governments around the world that fund various projects by selling government bonds, the government of Antigua and Barbuda allows the funding of projects and charities through government-supported ICOs.

No, people with black money (or the bad guys as you call them) would not have been alerted by this move.This is because it is not actually a bill that needs to be passed in order to bring in new notes for fluctuation in the economy. A bill is passed by the houses of government (Lok Sabha & Rajya Sabha). But you are right to the extent that it must be constitutionally valid for something to be accepted as a form of payment in a country. So what made this change legal?What can be defined as a form of payment in India has already been given to RBI through the RBI Act, 1949 - thus making RBI constitutionally the authority to define money in India. It is this power and autonomy of the RBI from the government houses (autonomy is also given in the RBI Act) to define anything that is legal tender.A legal tender essentially means what ‘legally cannot be refused by any individual if offered for payment against any debt’. In practical sense, legal tender is simply the acceptable form of payment in an economy (like India). In the definition stated above, such debt may have arisen out of a purchase or otherwise simply a borrowing.Now what we have established is that RBI has constitutional powers (due to the RBI Act) to define legal tender. Now, on November 8th, what was basically done was that a press that was issued by the RBI, which states that -“With a view to curbing financing of terrorism through the proceeds of Fake Indian Currency Notes (FICN) and use of such funds for subversive activities such as espionage, smuggling of arms, drugs and other contrabands into India, and for eliminating Black Money which casts a long shadow of parallel economy on our real economy, it has been decided to cancel the legal tender character of the High Denomination bank notes of Rs.500 and Rs.1000 denominations issued by RBI till now. This will take effect from the expiry of the 8th November, 2016.”Note that it has been decided to cancel legal tender character (in bold above) and not the denomination itself. Read further below to what they mean by this character.The press release further states that -“New Series bank notes of Rs.500/- and Rs.2,000/- denominations will be introduced for circulation from 10th November, 2016. Infusion of Rs.2,000/- bank notes will be monitored and regulated by RBI. Introduction of new series of banknotes which will be distinctly different from the current ones in terms of look, design, size and colour has been planned.”The relevant Notifications are available in the website of Finance Ministry (Ministry of Finance, Government of India). Further details including Frequently Asked Questions (FAQs) are available on the website of the Reserve Bank of India (Reserve Bank of India).Issuing a press release takes much shorter time and only a limited few know about this information. It is also legally binding on them to not leak the information. Hence people with black money did not have a lot of opportunity to do anything - cause they can have money either in bank accounts or in cash. Both have been targeted now because of this scheme. And this was done within a short period of less than 6 months till everyone was allowed to disclose all of their black money. Changing a legal denomination is a huge task which no one could have even thought of!This is always the best strategy, hit your enemies hard and unexpected!Please feel free to comment if you have any concerns :)Edit 1:Removed that the Rs. 2000 note will have a GPS tracker.