Licensing Fee: Definition, How It Works vs Royalty, and Examples

Licensing Fee: Definition, How It Works vs Royalty, and Examples

Intermediaries can run into technical difficulties or solvency issues. CBDC payment intermediaries need to offer valuable services that have the same convenience, innovation and efficiency as in today’s payments. One approach that makes for a safe means of payment while allowing the private-public partnership to continue is a “hybrid” CBDC. In this architecture, private intermediaries execute real-time payments and handle all customer-facing aspects, including ongoing customer due diligence.

  • This assessment needs to be done with a few considerations like trends followed by market leaders, objectives of migration strategy, peak transaction volumes and evaluation of various aspects of post-migration operations.
  • As the platform and its range of activities grow, the greater attraction of the platform fosters a DNA feedback loop.
  • I’ll note here that the term “compliance” is fairly broad, but for the purposes of this article, I refer to the proper licensure of firms and individuals, and adherence to key related requirements, like prompt payment.
  • 63 See A Carstens, “The future of money and payments”, 2019 Whitaker Lecture at the Central Bank of Ireland, 22 March 2019a.

25 See D Maurer, “An examination of the economics of payment card systems”, Swiss National Bank, July 2009. The owner of the IP has the right to license it to one person or multiple people. The license’s scope should be non-exclusive if several customers have to use your IP. If you give exclusive rights to a customer, only that person has a right to use that IP even to your exclusion. For every product they manufacture based on the design created by the designer, they give a certain revenue per piece to the designer.

If an application is being migrated to cloud, then only relevant processes should be processed and stored in those cloud regions that meet compliance requirements. In addition, as an application is being migrated, the data flow should be mapped throughout the cloud architecture. This will help in keeping track of how customer data is being used and in staying on the right side of privacy legislation. Migration to cloud also calls for a new distributed approach to software design, where the overall application is segregated into smaller components known as microservices, with each deployed on its own dedicated resource.

Why Licensing?

This is all happening in the context of new non-bank competitors who are disrupting the existing value chain for payments. To meet these challenges organizations are reevaluating their payments infrastructure to thrive in this new environment. Let’s take a closer look at the competition for BaaS and embedded finance firms.

I’ll note here that the term “compliance” is fairly broad, but for the purposes of this article, I refer to the proper licensure of firms and individuals, and adherence to key related requirements, like prompt payment. Moving to cloud architecture can help banks and FIs cope with significant growth in payment volumes while simultaneously handling the inevitable peaks and troughs of transaction flows. Cloud seems to be the future of payments in the current digital transformation era.

Over the last several years, central banks and policymakers have become more favourably disposed towards issuance of wholesale and retail CBDCs.63 They have featured more positively in central bank communications since late 2019 (Graph III.10, left-hand panel). The motivations for retail CBDCs are numerous and vary across jurisdictions. Overlay systems provide front-end services by using existing infrastructure to process and settle payments (eg ApplePay, Google Pay, PayPal).

IDG: Security and compliance automation for financial services

The present generation is tech savvy, and this has led to an increase in the number of overall digital payment transactions. The BIS is closely supporting central banks in their CBDC research and design efforts (Box III.E). The institution is part of an international group of central banks assessing the potential case for CBDC issuance. A payment system is a set of instruments, procedures and rules for the transfer of funds among participants.6 Payment systems are generally classified as either retail or wholesale.

It is central banks’ choice to harness these forces for the common good. They can combine their role as catalyst, overseer and operator, and develop an entirely new set of payment arrangements that run on digital currencies. Finally, there is scope to improve the quality of payment services in terms of convenience, transparency and speed. Indeed, card networks typically involve three or four parties to process transactions, with various and sometimes opaque fees.

As regards commission etc. banks are required to follow the guidelines issued by respective sectoral regulators in the matter. The organogram should start with the main individual promoters indicating their shareholding in the group entities and also cross holding among the group entities. The details required as per the annexure to the guidelines are re-quired to be submitted by the applicants. However, any the PPI entity cannot coexist with the payment bank in the same group. Another selling point of cloud infrastructure is that it is distributed by nature.

Over the last two decades, the Reserve Bank of India (RBI) has issued banking licences under different categories. While the RBI was relatively generous when it came to the number of new licences for Small Finance Banks and Payment Banks, only a handful of players have been licensed to operate as Universal Banks. The various guidelines prescribed over the years for different sets of licences have, to an extent, created some inconsistency. Aiming to bring in uniformity and level the playing field in an evolving landscape, the RBI constituted a Working Group in June 2020 to review extant guidelines. 69 See A Carstens “Central bank innovation – from Switzerland to the world”, speech, 8 October 2019; and BIS, “Central bank group to assess potential cases for central bank digital currencies”, press release, 21 January 2020.

A retail payment system handles a large volume of relatively low-value payments, in such forms as credit transfers, direct debits, cheques, card payments and e-money transactions. A wholesale payment system executes transactions between financial institutions. These payments are typically large-value and need to settle on a particular day and sometimes by a particular time. The existing messaging capabilities for many organizations were initially deployed when the type of parallel throughput to support a real-time service was not required. Taking advantage of cloud-native messaging means that organizations can tap into the elasticity of the underlying cloud platform while improving the processing speed across the systems that participate in the payment transaction.

Deloitte Touche Tohmatsu India Private Limited (U74140MH199 5PTC093339) a private company limited by shares was converted into Deloitte Touche Tohmatsu India LLP, a limited liability partnership (LLP Identification No. AAE-8458) with effect from October 1, 2015. Lien waivers are an important part of optimizing construction payment. The Work In Progress (WIP) schedule is an accounting schedule that’s a component of a company’s balance sheet. This post covers the certified payroll requirements for contractors working on federal construction projects. I am doing some part-time administrative work for a friend who has an owner/operator pressure washing business located in NC in its first year of business.

Interoperability is the technical and regulatory compatibility that enables one system to work seamlessly with others. It can help level the competitive playing field, further enhance efficiency directly, and support entry and innovation. In our town market analogy, interoperability corresponds to having an open market where buyers can approach many different stallholders.

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