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transcript
A Revolutionary Fund Transfer Service
Immediate Payment Service (IMPS) Unleashing the Power of a Billion Consumers
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Paris , France24th September , 2014
Payments Strategy
A Revolutionary Fund Transfer Service
Agenda
Global Payment Landscape
Indian Retail Payment Systems
Genesis of NPCI
IMPS – A Revolutionary Fund Transfer Service
Market Opportunities
Focus Areas
Partners’ Involvement
A Revolutionary Fund Transfer Service
2010-20 - Volume of payments would increase at a CAGR of 21% in India, much above the global average of 9%
Global Payment Landscape
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1.2 Billion people (40% unbanked)
---------------------------77% of population in rural areas (85%
unbanked)
88% mobile phone
penetration
55% of internet
users are mobile only
165 million internet users.
3rd largest globally
900 million cell phones
Branches - 89000 (Rural 26500)ATMS – 145000 (Offsite 58000)
40% adults have bankaccount
Source : Information available in public domain
Total Villages - 600000 (Covered under Financial inclusion Plan 270000
One billion consumers and counting - Unleash the ‘True Potential’
• Total Population: 1.2 billion 77% rural population 30% urban population 69% under poverty line 60% below 25 years
• $3,910 GNI/Capita• 73% literacy rate (35% woman)• 40% access to financial services• 11.38 commercial bank braches/ 11.21 ATMS per 1,00,000 habitants.• 12 MNOs (10 private players representing 88% of the sector)
88% mobile penetration 900 million mobile connections
• 200 banks with 65 banks licensed for mobile banking and 59 banks live.• 14 MFS Solutions (excluding mobile banking solutions)
A Revolutionary Fund Transfer Service
Future of Payment Systems in India- Mobile Led ?
India is expected to be among the top five payment markets by 2016 and is currently the second largest driver of growth in Asia
A Revolutionary Fund Transfer Service *Courtesy Market Study of Digital Financial Services in India by Amarante Consulting
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Payment flows in India are expected to increase to 3x by 2015
1 US$~60 Rs
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Payment revenues in India are expected to increase to 2x by 2015
1 US$~60 Rs
A Revolutionary Fund Transfer Service
Indian Retail Payment System – ROAD BLOCKS
Standardization
Interoperability
Cost efficiency
Dominance of Cash
Innovation
Financial Inclusion
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India is at interesting point in its payments journey wherein the future growth will
depend on innovation in products, business models, consumer interfaces, security and
infrastructure under the umbrella of enabling regulations.
Genesis of
A Revolutionary Fund Transfer Service
About NPCI : An Umbrella Organization for Retail Payments
Financial Switching Servicesto facilitate Interbank Transactions
National Financial
Switch (NFS) – ATM Network
Immediate Payment
Service (IMPS)
National ACH
Cheque Truncation
System (CTS)
CardsScheme
Aadhar Enabled Payment Systems
OBJECTIVES OF NPCI
To consolidate and integrate all retail payment systems:
Electronification Interoperability Financial Inclusion Standardization Cost Effective & Customer
Friendly Safe & Secure Available anywhere
anytime Fully Automated World Class
A Revolutionary Fund Transfer Service
A Revolutionary Fund Transfer Service
Launch – Key Enablers
Consumers need : Access to a 24X7X365, real-time retail payment system
Market gap : Existing retail payment systems that were neither real-time nor 24X7
Impact of Mobile Devices: In depth penetration of mobile phones across India and its emergence as a device to access financial services
Availability of Existing Infrastructure: National Financial Switch (NFS) of NPCI , for IMPS to ride on
A Revolutionary Fund Transfer Service
Core Proposition – 1/2•IMPS provides real time payment option to consumers which can be accessed anywhere, anytime through various channels.
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Who can use?
• Any banking customer
• Who has a remittance / payment needs
What can you do?
• Transfer Money• Pay Merchants• SME &
Corporate payments
• Aadhaar enabled payments
How?
• Mobile• NUUP• SMS
• Internet• ATM• Business
Correspondent
Where can you use it?
• Transfers• Migrant worker
remittance• Bill Payments• Large scale field
collection• Govt. Direct
Benefit Transfers (DBT)
• Cash on Delivery
• Insurance / MF Payouts
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Core Proposition – 2/2Concept
• “Any time, any place” real-time
remittance solution
Need
• Consumers need• Market gap• Divide between
rural and urban banking services
• Higher cost to enable banking services to rural area
Key take-away
• Co-creation• Standardisation• Interoperability• Leveraging
existing Infrastructure
• Reverse innovation
Opportunities• White label m-commerce platform
• New business models
• Expansion of partner base : PPIs/RRBs
• Option of cash withdrawal
• AADHAAR as financial address
• Government benefits disbursal/FI initiatives
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Who can use & how - Sending & Receiving Side
Sending Side• Payment Instrument - Cards,• Cash, Mobile, Aadhaar• Channels – ATM, Internet Banking,
Mobile Banking• Electronic Money - Bank Account,
Prepaid Wallet• Institutions- Banks, PPI’s, Money
Tx Agents• Third Party Locations – BC Outlets,
Agents• Mobile Based - App, SMS, USSD
Receiving Side• Electronic Money - Bank Account,
Prepaid Wallet• Destination - Aadhaar, Mobile,
Bank Account, Prepaid Wallet• Beneficiary Entity – Individual,
Merchant, Corporate Institutions, Banks, PPI’s
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Three engagement models: Telco-led, Collaborative and Bank-ledTelco led
• Distribution through Telco network / local retailer network
• Deposits held in prepaid a/c s issued by Telco
• Carries the Telco's brand
Collaborative Bank led
Kenya South AfricaPakistan
• Distribution led by bank• Deposits held in A/C’s
issued by banks• Carries the bank's brand• MNO agnostic
• Distribution through banks/telcos network
• Deposits held in escrow a/c in bank
• Branding either joint or with bank assuming the minor role
• Banks involved in acquiring MasterCard / Visa merchants in some models
PhilippinesPhilippines
PhilippinesSouth Africa
Source: BCG experience
Collaborative is approach urgent and important for building the mobile FS
platform in India
A Revolutionary Fund Transfer Service
Remitter Customer walks into a BC Outlet for transferring funds
BC agent collects the Cash from the customer and transfer the funds using IMPS
Customer receives the SMS confirmation on his phone after his funds are successfully transferred
Remitting Customer hands over the cash to BC Agent for transferring funds back home to beneficiary customer.
Successful Business Model (Urban migrant remittance cash to account)
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National Unified USSD Platform for Mobile Banking for India..
The Indian Consumer
NUUP – Mobile Banking for Financial Inclusion
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National Unified USSD Platform (NUUP)
• An initiative under Prime Minister – Jan Dhan Yojana
to further financial inclusion scheme
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ABRS – Aadhaar Based Remittance Service & QASM
ABRS – Transacting using Aadhaar as a financial address. Inputs Required
Aadhaar Number Amount MPIN
• To facilitate the effective implementation of ABRS, a new feature is being added to the existing NUUP (USSD based platform on *99#) service - QSAM.
• “Query Service on Aadhaar Mapper” the customer will be able to know: - Whether his/her AADHAAR number is seeded/linked to any bank account number or not? If yes, then with which bank and when was it last updated?
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Key Focus AreaFinancial Inclusion - NUUP & ABRS
New use case – Foreign Inward Remittance
Expansion of the ecosystem – Co-operative & Rural Banks ; PPI’s
White Label m-Commerce platform
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Success Drivers For
Adapting existing payment mechanism : IMPS using A/C no. & IFS code
Innovative Business approach : Assisted model adopted by banks
Internet as an access mechanism
Emergence of Non Banking Players (PPI’s)
Collaborative Ecosystem
A Revolutionary Fund Transfer Service
Opportunities
Urban migrant remitter market
Sector Specific opportunities – bill payments/Ecommerce/MF’s/NBFI’s
Tapping potential of Mobile phones as a payment instrument
Financial Inclusion
Emergence of new payment enablers – Aadhaar
Direct Benefit Transfer
Social Media as Payment Enablers
A Revolutionary Fund Transfer Service
Key Challenge – Customer AdoptionLack of awareness of potential use of Mobile
Lack of standardized and easy to use service
Lack of trust in digital money
Lack of interoperability across service providers
Inability to withdraw cash
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Benefits of IMPSReal-time
domestic fund transfer
24 X 7 X 365 availability
Standardized Credit and Debit
confirmation
Simple, fast and easy to use
Low on costCatalyst to financial inclusion
Channel Independent
AADHAAR No. based
transaction enabled
Financial and non-financial
service available
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IMPS – Key StakeholdersRegulators
Government
Technology players
Service providers
Banks
Telecom players
Handset manufacturers Work in Alignment
A Revolutionary Fund Transfer Service
Scope for partners’ involvement• Technology
– Development of multi-platform and easy to use application
– Speed of transaction for seamless user experience
– Scalable platform for acquiring merchants integration
– Security
• Operations– KYC norms and cash
managment– Interoperability
across mobile service providers and banks
– Issues regarding theft of mobile handsets, migration across banks/telecom providers
• Customer Adoption– Literacy levels and
presence of multiple local languages
– Build trust in digital money through adequate marketing
– Loyalty Rewards scheme
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A Revolutionary Fund Transfer Service
CONFIDENTIAL AND PROPRIETARY . Any use of this material without specific permission of NPCI is strictly prohibited
Ram RastogiHead- IMPS, USSD Platform & NACHNational Payments Corporation of IndiaContact No.: +91 8108108644ram.rastogi@npci.org.in
Thank you…
Let’s partner to build a robust, secure and interoperable and financially inclusive world.