Hua Li

💡 How does India's 𝐔𝐏𝐈 (Unified Payments Interface) work? 👇
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The 4-page file below shows the detail of registration, linking and direct payment.

🔹 UPI = payment markup language + standard for interoperable payments.

UPI has gone through 𝐞𝐱𝐩𝐥𝐨𝐬𝐢𝐯𝐞 𝐚𝐝𝐨𝐩𝐭𝐢𝐨𝐧 since its inception in 2016. It builds a digital payments ecosystem with payment apps, banks, and NPCI (National Payments Corporation of India).

It now takes up 60% of digital retail transactions in India.

It is estimated that the digital payments market in India will grow by 3 times in 2026.

👉 Over to you: Can the Payment Apps connect to NPCI by themselves?

Reference: “UPI 101” by Setu
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#systemdesign #payments #upi #india
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How does Mastercard 𝐌𝐞𝐫𝐜𝐡𝐚𝐧𝐭 𝐐𝐑 𝐜𝐨𝐝𝐞 replace PoS (Point of Sale)?
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The diagram below shows how Mastercard MPQR (Merchant Presented QR) works. There is 𝐧𝐨 𝐏𝐨𝐒 𝐭𝐞𝐫𝐦𝐢𝐧𝐚𝐥 𝐨𝐫 𝐩𝐡𝐲𝐬𝐢𝐜𝐚𝐥 𝐜𝐚𝐫𝐝 involved.

🔹 Step 1: The merchant presents its QR code at checkout. 
There are 𝐭𝐰𝐨 𝐭𝐲𝐩𝐞𝐬 of QR codes:

- 𝐃𝐲𝐧𝐚𝐦𝐢𝐜: the code is generated for each transaction and includes the payment amount
- 𝐒𝐭𝐚𝐭𝐢𝐜: the code is used for all transactions

🔹 Step 2: The customer scans the QR code using a mobile app and confirms the payment.

🔹 Step 3: The payment app sends transaction data to the transaction originator to initiate MPQR payment.

🔹 Step 4: The transaction originator debits the customer’s account in the customer’s bank.

🔹 Steps 5 and 6: The transaction originator sends a payment request to the Mastercard network. Mastercard routes the payment request to the merchant’s bank.

🔹 Steps 7 and 8: The merchant’s bank approves or declines the request. If it is approved, the merchant’s bank credits the merchant’s account.

🔹 Steps 9 - 11: The payment response is sent back all the way to the mobile app.

👉 Over to you: Have you used MPQR before? In which store?
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#systemdesign #payments #fintech #qrcode
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Why are stocks settled so slowly (T+2)?
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The diagram below shows the overall flow.

There are 3 parts:
🔹 Trading
🔹 Clearing
🔹 Settlement

▶️ 𝐓𝐫𝐚𝐝𝐢𝐧𝐠 
Steps 1.1 - 1.3: The stock buyer and seller place orders via brokers or custodian banks.

Step 2: The brokers execute the orders in the exchange.

▶️ 𝐂𝐥𝐞𝐚𝐫𝐢𝐧𝐠
Step 3: The exchange sends execution reports to the clearing agent.

Step 4: The clearing agent match, compare and confirm the trades among brokers or custodians.

▶️ 𝐒𝐞𝐭𝐭𝐥𝐞𝐦𝐞𝐧𝐭
Step 5: The clearing agent calculates settlement obligations and sends to the settlement agent.

Step 6: The securities are delivered in exchange for funds.

You can see there are a lot of steps involved, so currently securities are settled T+2 (trade day plus 2 business days).

 👉 Over to you: Where do you usually place your stock orders?
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#systemdesign #payments #fintech #trading #stockexchange #settlements
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