FinSecure is a proposed payment system that aims to provide a secure and reliable method for conducting financial transactions. The system is designed to ensure the privacy and security of users' financial information and transactions, with a focus on holding money in escrow until certain conditions are met using smart contracts.
FinSecure will use a cloud-based database to store the bank details of each account and bind it to a certain value. The system will then use smart contracts to regulate the transaction process and hold the money in escrow until the conditions of the contract are met.
An intermediary service will be created between transactions to hold the money in escrow until the conditions of the smart contract are met, while a notification service will inform the sender and receiver about the transaction status. A user-friendly interface will also be developed for the payment system using a web or mobile application that will interact with the cloud services.
This research paper examines the need for a fast, secure, and transparent payment system to accommodate the demands of modern-day living. The Unified Payments Interface (UPI) was introduced by the National Payments Corporation of India (NPCI) in April 2016, enabling seamless money transfers via the internet and smartphones. During the COVID-19 pandemic, UPI usage rose exponentially, facilitating a path towards a cashless economy in India. In October 2022, UPI had nearly 7.3 billion transactions. Despite its technological advancements, UPI has experienced some setbacks, including issues with intermediaries causing transactions to become stuck and fraudulent practices resulting from a lack of financial literacy among Indians. This paper proposes the introduction of a single intermediary regulated by the Reserve Bank of India (RBI) with additional security features and binding methods that provide a secure, reliable, transparent, and fast mechanism for transferring money. It also suggests holding money in the intermediary until certain conditions are met using smart contracts. Additionally, the paper discusses solutions to promote the use of central bank digital currency (CBDC) and a mechanism built on top of the proposed solution using blockchain technology to provide a tamper-proof ledger, transparent, secure, and efficient way to transfer funds among peers, international transfers, B2B, B2C, etc. The aim is to create a more efficient and secure payment system that can accommodate the needs of modern-day living.