What is a "Payment System" under the Payment and Settlement Systems Act, 2007? What is the objective of the Payment and Settlement Systems Act, 2007 ?

Payment System: Section 2(I)(i) of the Payment and Settlement Systems Act, 2007 (PSS Act, 2007) defines a "Payment System" to mean a system that enables payment to be effected between a payer and a beneficiary, involving clearing, payment or settlement service or all of them, but does not include a stock exchange (Section 34 of the PSS Act 2007 states that its provisions will not apply to stock exchanges or clearing corporations set up under stock exchanges). It is further stated by way of an explanation that a "payment system" includes systems enabling credit card operations, debit card operations, smart card operations, money transfer operations or similar operations. All systems (except stock exchanges and clearing corporations set up under stock exchanges) carrying out either clearing or settlement or payment operations or all of them are regarded as payment systems. All entities operating such systems will be known as system providers. Also, all entities operating money transfer systems or card payment systems or similar systems fall within the definition of a system provider. To decide whether a particular entity operates the payment system, it must perform either the clearing settlement or payment function or all of them. Objective of Payment and Settlement Systems Act, 2007: The PSS Act, 2007 provides for the regulation and supervision of payment systems in India and designates the Reserve Bank of India as the authority for that purpose and all related matters. The Reserve Bank of India is authorized under the Act to constitute a Committee of its Central Board known as the Board for Regulation and Supervision of Payment and Settlement Systems (BPSS), to exercise its powers and perform its functions and discharge its duties under this statute. The Act also provides the legal basis for "netting" and "settlement finality". This is of great importance, as in India, other than the Real Time Gross Settlement (RTGS) system all other payment systems function on a net settlement basis.