Finternet

About Finternet:

• It is multiple financial ecosystems interconnected with each other – much like the internet. 
• It would lower barriers between different financial services and systems, drastically reducing the complex clearing and messaging chains and other frictions that hinder financial systems.
• Working: Finternet would be built on unified ledgers which will bring multiple financial markets such as tokenized assets, shares, bonds, real estate, on a single programmable platform.
• This has the capability to enable individuals and businesses to transfer any financial asset they like, in any amount, at any time, using any device, to anyone else, anywhere in the world. Financial transactions would be cheap, secure, and near-instantaneous.
• Advantages: Finternet will be user-centric, unified, which means it will cover all types of assets, with a universal infrastructure.
• Significance: This would reduce the complex processes that happen behind-the-scenes today and make transactions slower and expensive.
• Central banks would remain at the core of the system, ensuring trust in money, but (like today) work closely with commercial banks.

Q1: What is a Card-on-File transaction?

Card-on-File transaction is a transaction where cardholders authorizes merchants to store their payment information securely and bill cardholders’ stored accounts for future purchases.

Source: Nandan Nilekani gives a glimpse of the next decade of India’s ‘Finternet’