Vajra Platform- India Blockchain Based Payment System

Vajra - India's Blockchain Based Payment Platform 

National Payment Corporation Of India (NPCI) announces a new automated Blockchain based payment platform Vajra.

Vajra Platform – A Distributed Ledger system for automated payment, clearing and settlement.

The team at NPCI researched 'Distributed Ledger Technology' (DLT), a new technology that promises to provide highly secure and tamper-evident transactions stored in a distributed and immutable database which is also versatile enough to be adapted to various cases.

After an initial assessment, DLT based system has been designed for automating payment clearing and settlement processes of NPCI products. The platform is named as ‘Vajra Platform’.

A permissioned network will be setup so that only the parties who have been approved by the Network Administrator can be a part of the network. Since Vajra is being developed for a payments processing industry, permission less blockchain systems were not considered.

Key benefits of using DLT in the payment processing industry:

1. Minimal reconciliation of transactions, higher resilience and efficiencies through automation and transparency
2. Near real-time clearing and settlement
3. Minimizing operations and financial risks
4. Economical, immutable, secure and easily accessible
5. Provides a legitimate audit trail

Key benefits of Vajra in Payment, Clearing and Settlement:

• Transparency 

Real-time visibility into the state of a transaction can help reduce disputes and improve back-end operations at banks and NPCI.

• Information Srorage

Disparate file systems maintained across banks, NPCI and other participants lead to a lot of reconciliation challenges and disputes. Hence, decentralized and distributed data storage would help reduce the pain of reconciliation across all the participants.

• Time Sensitivity

Real time transaction will reduce the clearing and settlement cycle.

• Manual Processing

Reconciliation and reporting are performed manually which leads to processing error, increased time for settlement and high cost of operation. Now the banks have data setup on node and can do reconciliation as per their convenience.

• Data Security

With highly sensitive customer information being transacted through payment rails, high levels of data security measures are already in place like selective data visibility across nodes (banks/NPCI, etc.)

• Dispute Management

A decentralized and distributed data storage would help reduce the pain of
disputes across all the participants.

• Intermediary

Currently Clearing & Settlement process involves multiple unrelated parties transacting with each other. This requires some level of intermediation from a centralized regulator.

Security on Vajra platform

• Permissioned Vajra network will use cryptography security for protection of data.
• Only authorized parties will be allowed to join the Vajra platform.
• Validating nodes will gain access to the Vajra platform only after passing security authentication,
 for example through the validation of registered digital signature.
• Primary and secondary nodes (meant for DR) on Vajra will ensure no external party can
 impersonate any of the nodes and thus security of data will be ensured on Vajra.
Privacy on Vajra platform
• Transactions to be encrypted by digital signatures (public and private keys) to prevent unauthorized
 parties from reading or corrupting transaction data.
• Communication between Vajra and external users to be encrypted to make Vajra data
 unintelligible to the latter.
• Use of off-chain DB for storing confidential data and storing only the hash pointers to those data
 on the DLT ledger will ensure data privacy.
• Node identities will be kept confidential to each node except for the public keys.

Source: NPCI