Examination Preparation Materials  - Chapter 01

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Examination Preparation Materials - Chapter 01

Model Questions References for Examination Preparation

Difference between PSO and PSP, with Examples in Nepal

A Payment Service Operator (PSO) typically operates payment systems and infrastructures, while a Payment Service Provider (PSP) offers payment processing services to merchants and consumers. PSP has users and PSO has partners and associates in their network.

In Nepal, Nepal Clearing House Limited (NCHL) is a PSO responsible for operating national payment systems like NCHL-ECC and connectIPS.

Khalti is a PSP in Nepal, providing payment processing services for online and offline transactions. NCHL is defined as a PSO because it operates payment systems, whereas Khalti is a PSP because it provides payment processing services to merchants and consumers.

Neo-Bank vs. Traditional Bank

A Neo-Bank is a fully digital and branchless financial institution that offers banking services exclusively through digital channels, often without physical branches. Unlike traditional banks, Neo-Banks have lower overhead costs, offer innovative digital features, and can cater to underserved populations. Traditional banks, on the other hand, typically have physical branches and offer a broader range of financial products and services. Neo-Banks leverage technology to provide convenient, efficient, and cost-effective banking solutions to customers.

Virtual Private Address (VPA) and UPI in India

A Virtual Private Address (VPA) is a unique identifier linked to a user's bank account, used for making and receiving payments through the Unified Payments Interface (UPI) in India. With UPI, users can create VPAs, such as "example@bankname," which eliminates the need to share sensitive bank account details for transactions. For example, a user can use their VPA to request funds from another user or pay for goods and services online. VPAs standardize the payment ecosystem by providing a secure and user-friendly way to transact without exposing sensitive information.


TLV stands for "Tag-Length-Value" and is a common format used to encode data in many communication protocols and data storage systems. In TLV format, each data element consists of three parts:

  1. Tag: Identifies the type or purpose of the data element.

  2. Length: Specifies the length of the value field in bytes.

  3. Value: Contains the actual data associated with the tag.

Here's a simple example of TLV format:

Tag (1 byte) | Length (1 byte) | Value (variable length)

Let's construct a TLV scheme for representing basic information about a person:

  • Tag 1 (Name): Tag value = 0x01

    • Length: Variable (depends on the length of the name)

    • Value: ASCII representation of the person's name

  • Tag 2 (Age): Tag value = 0x02

    • Length: 2 Characters

      Value: Numeric representation of the person's age in XX format

  • Tag 3 (Address): Tag value = 0x03

    • Length: Variable (depends on the length of the address)

    • Value: ASCII representation of the person's address

Example TLV-encoded data:

Tag: 0x01 (Name)
Length: 7 bytes
Value: Alice

Tag: 0x02 (Age)
Length: 2 Chars
Value: 25

Tag: 0x03 (Address)
Length: 10 Chars
Value: Labim Mall

This TLV scheme allows us to represent information about a person using a structured format that can be easily encoded, decoded, and processed by software systems. Each piece of information (name, age, address) is identified by a unique tag, and the length field ensures that the data can be properly parsed and interpreted.

The final string in a TLV format defining the data above - constitutes to be

0105Alice0202250310Labim Mall