Future of Payments 2012 - Ram Rastogi, Head-Mobile Payments and Financial Inclusion, National...

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Changing the Payment Landscape -

Innovative Remittance Service

Future of Payments Conference 2012, Sydney

• Global Payment Landscape

• Retail Payments in India

• National Payments Corporation of India (NPCi)

• IMPS – Innovative Instant Mobile Payment &

Remittance Service

• Key Takeaway

Agenda

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

the global average of 9%

Global Payment Landscape

Mobile Payments Readiness Index

India ranked 21st in global markets for mobile payment readiness

Mobile readiness vs. other nations

India scores high on readiness for mobile

financial services

Currently significant gap between actual

adoption and market potential

Kenya

Bangladesh

ArgentinaNigeria

MalaysiaUgandaTanzania

Ghana

Afghanistan

Market Environment2

1

0

-1

-2

-3

Institutional Environment210-1-2-3

Mexico

Brazil PakistanIndia

South Africa Indonesia

Phillipines

High Readiness

Low Readiness

Adoption & Availability2

1

0

-1

-2

-3

Market Environment210-1-2-3

Brazil

PakistanIndia

South Africa

Indonesia

Phillipines

Kenya

Bangladesh

Argentina

Nigeria

Malaysia

Uganda

TanzaniaGhana

Afghanistan

Source: BCG report

Note: Country scores are based on the difference of the unweighted average country result on each of pillars

included in a specific environment and the total sample mean for that environment. The difference is expressed

as the number of standard deviations of a country score from the mean.

Retail Payments in India

Source: BCG Report

Future of Payment System in India - Mobile led?

Transaction profile in India is expected to change dramatically from 4 % in 2010 to 22-34% by 2020

Taken from BCG’s Indian Banking 2020 – September 2010

Fortune-Bottom of Pyramid - Middle of Diamond

Payment flows in India

Source: Mckinsey Report

Payment revenues in India

Source: Mckinsey Report

NPCI - India’s own electronic payment system

NPCI - An Umbrella Organization for Retail Payments

Financial Switching Services

to facilitate Interbank Transactions

Financial Switching Services

to facilitate Interbank Transactions

Automation of Cheque

Processing

Automation of Cheque

Processing

National

ATM

Network

National

ATM

Network

Interbank

Mobile

Payment

Service

Interbank

Mobile

Payment

Service

National ACH

National ACH

Cheque

Truncation

Cheque

Truncation

Cards

Scheme

Cards

Scheme

Aadhar

Enabled

Payment

Systems

Aadhar

Enabled

Payment

Systems

National Payments Corporation of India: Product & Service OfferingNPCI - Initiatives on Retail Payment Services

Innovative, Instant Mobile Payment and Remittance Service

IMPS - Key features

�MMID ���� 7 digit number

�MMID = NBIN + MAS ( Mobile Account Selector)

NBIN � 4 digit number (National Bank Identification Number)

MAS ���� 3 digit number (Account Identifier)

−Routing code for switching transactions

−Allow customers to link multiple accounts in the same bank

and with multiple banks as well

−Reduces the error in keying the beneficiary mobile and

transactions to maximum extent.

−Allow only genuine recipients to receive.

9002459

MMID : Mobile Money Identifier

1 : Remitting bank customer initiates the

transaction on his mobile and authorizes it

with his Mpin.

1

23

7

6 5

2 : Remitting Bank validates the Mpin,

Remitter mobile no., account balance, debits

the customer account and forwards

instructions to IMPS Switch

3 : IMPS Switch validates the transaction

content and forwards the instruction to

Beneficiary Bank based on the NBin

4 : Beneficiary Bank validates account details

and credits the Customer account

5 : Beneficiary Bank advises Switch of

Approval or Rejections of the transaction

6 : IMPS Switch Advises Approval or

Rejection to the Remitting Bank.

7 : Remitting Bank completes the transaction

8 : Both Remitter and Beneficiary Bank

initiate an SMS to their respective customer

informing them on the transaction status.

4RemitterIMPS Switch Beneficiary

The Customer inputs

Beneficiary MMID, Mobile

number, amount along with his

own MPIN

Mobile Money Identifier

(MMID) is a 7 digit no. allotted

to a mobile banking customer

by his bank. The first four

digits is the NBIN which

identifies the Bank and the

next 3 digit is the customer

identifier

IMPS -P2P - Remittance –Process Flow

IMPS - Channel Agnostic

• Application

• SMS

• WAP

• USSD

• ATM & Internet Banking

• Customized Application

• IVR

• Web Interface

• POS (Mobile)

Remitter Beneficiary/ Merchant

IMPSApplications

IMPS: Merchant Payments

Video

National Unified USSD Platform for Mobile

Banking for India..The Indian Consumer

NUUP – addressing the Performance Gap

Video

• Co-created product for the industry, by the industry

• Interoperable service - seamless transactions capability

• MMID Concept – A unique concept

• IMPS rides on the banking system

• Usage in Intra-bank fund transfer too.

• Increase in reach using NFS

• Ability to extend for many other services

• Mobile Point of Sale (POS) terminals

• Role in improving payment system efficiency in India

Advantage IMPS

‘Innovation for emerging markets, rather than simply exporting, can unlock a

world of opportunities for multinationals’ – Professor Vijay Govindarajan

IMPS – Reverse Innovation from India

Financial bodies, Regulators/Industry bodies and external partners

will need to come together to take this ecosystem to the next level

Need to do more…

IMPS : Key Take-away

Co-creation

Leveraging

existing

Infrastructure

Standardization Interoperability

Thank you…

CONFIDENTIAL AND PROPRIETARY

Any use of this material without specific permission of NPCI is strictly prohibited

Ram Rastogi

Head & NFC Payments

National Payments Corporation of India

Contact No.: +91 8108108644

ram.rastogi@npci.org.in