Tuesday, February 03, 2015

Explaining AAP online donation system..

We, as responsible global Indian citizens, need to understand how money travels in case of online payments. Aam Aadmi Party is the first political party in the world which have thought and designed an online donation module which is transparent and secure and regulated. We need to encourage such systems of funding elections to better our democracy, to reduce corruption.

To understand the supposed scam by AAP as alleged by the BJP, you have to read the following few paragraphs.

It is one of the top priorities of the Reserve Bank of India (RBI) to regulate various modes of online payments; be it airtel money, paypal, mobile wallets and other online payment tools. That is the sole reason why Paypal was not allowed to do business in India for quite some time, as it had a risk of money laundering.

Let us understand how AAP gets funded through their online donation module.

  1. People with credit cards, debit cards, INR saving accounts, INR current accounts, mobile wallets like Airtel Money only can donate to AAP. This practically negates the misconception that foreign funds are coming to AAP.
  2. AAP has payment gateways that can only accepts payment instruments like the above mentioned list which are Indian Rupee based. AAP payment gateway cannot accept an American or European or a Saudi Arabian credit or debit card.
  3. So, we should understand that AAP can receive money from Indian Bank Accounts only. Now India has one of the best KYC (know your customer) policies in the world. It is so foolproof that it even acts as a barrier to opening accounts in rural India because identity and address documents are sparsely kept in rural India. So when a customer or a company opens an account, both these identity and address documents have to be provided. It is the onus of the banks to check the veracity of these documents so that a criminal or a scam company does not get to enjoy banking facilities.
  4. When a donor is making an online donation, there are three or more banks involved in the transaction. Let us take a case of 3 banks. The bank of the donor, the bank of the payment gateway like billdesk, CCAvenue etc and the bank of the receiver (AAP in this case). Money flows from the donor bank to the AAP bank account via the bank of the payment gateway. We need to note that the interbank money flow is via secure RBI RTGS servers. RBI RTGS servers can only be used by Indian Banks dealing in Indian Rupees.
  5. RBI has fixed a maximum time limit of T+2 days for the settlement process of these online transactions. Two donations given in two consecutive days may come to the bank account of AAP in one single day. That is not a discrepancy. It is simply the settlement processes that banks have.
  6. Important to note that when AAP receives money through the online module, it does not get to know any detail about the donor. At most, it may get the account number and the bank name in case of net-banking transactions. As for credit and debit card payments, AAP does not even get to know the card numbers. There are strict privacy laws against disclosure of such information to third parties. So, effectively, AAP has to depend on whatever the donor declares in the donation form just before going to the payment gateway webpage for payment. The donor provides his or her name, his or her mobile phone number, his or her email ID, and his or her state/city of domicile. The donor may give his name as 'BARACK OBAMA' and AAP has to accept it as such. There is no verification possible. As long as the money is coming from a legitimate bank account via a legitimate channel, AAP has absolutely nothing to worry or hide. 
  7. AAP cannot ask for account numbers, card numbers and such details as that would violate privacy laws. These details are only filled in the webpage of the payment gateway service providers, which are registered with the Reserve Bank of India after due diligence and regular audit processes.
  8. So AAP has minimum available data to do any cross verification of the donors. The primary responsibility of verifying the donors lies with the banks, as they are the customers of the banking system with strict KYC laws.
As for cheques, banks offer a cheque collection service for account holders with sizable number of incoming cheques. As part of their service, the bank provides an MIS (mostly excel) with all cleared cheque payments which can be uploaded into the AAP website by giving them transaction IDs.

I have tried to explain the AAP online payment of donation system to the best of my abilities. If there are any questions, please ask and I will answer each one of them.

Thank you.

Please vote for AAP.


  1. gr8 piece countering the media/BJP misinformation...shared it


The fun is in knowing how nasty, boring or great fun, it was for you, reading my blog post... Just write in, criticize, praise, add to my thoughts or whatever you feel... it will only add to my perspective.
Thank you for your time. Cheers.