imps - paris ppt.pptx-1

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


Agenda

Global Payment Landscape

Indian Retail Payment Systems

Genesis of NPCI

IMPS – A Revolutionary Fund Transfer Service

Market Opportunities

Focus Areas

Partners’ Involvement


2010-20 - Volume of payments would increase at a CAGR of 21% in India, much above the global average of 9%

Global Payment Landscape

A Revolutionary Fund Transfer Service 4

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)


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


Payment flows in India are expected to increase to 3x by 2015

1 US$~60 Rs


Payment revenues in India are expected to increase to 2x by 2015

1 US$~60 Rs


Indian Retail Payment System – ROAD BLOCKS

Standardization

Interoperability

Cost efficiency

Dominance of Cash

Innovation

Financial Inclusion


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


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


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


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


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


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


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


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


National Unified USSD Platform (NUUP)

• An initiative under Prime Minister – Jan Dhan Yojana

to further financial inclusion scheme


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?


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


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


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


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


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


IMPS – Key StakeholdersRegulators

Government

Technology players

Service providers

Banks

Telecom players

Handset manufacturers Work in Alignment


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


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 [email protected]

Thank you…

Let’s partner to build a robust, secure and interoperable and financially inclusive world.

imps - paris ppt.pptx-1

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