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Bank Cards and E-payments
April 10, 2023
Agenda
Background
e-Payment Initiatives
In Conclusion
Benefits and Key Focus Areas
Agenda
Background
e-Payment Initiatives
In Conclusion
Benefits and Key Focus Areas
E-Payments
Covers large canvas
Can change the way we shop, pay bills, travel, conduct business, bank and live
E-Payments
Development Drives GrowthP
erce
nta
ge
of
Ow
ner
ship
Per
cen
tag
e o
f O
wn
ersh
ip
100100
8080
6060
4040
2020
00
ElectricityElectricity(1873)(1873)
TelephoneTelephone(1876)(1876)
AutomobileAutomobile(1886)(1886)
TelevisionTelevision(1926)(1926)
RadioRadio(1905)(1905)
VCRVCR(1952)(1952)
MicrowaveMicrowave(1953)(1953)
1001008080606040402020 120120
Years Since IntroductionYears Since Introduction
PCPC(1975) (1975)
InternetInternet(1975)(1975)Cell PhoneCell Phone
(1983) (1983)
Source-- Microsoft
Explosive growth of e-commerce
The explosive growth of e-payment is driven The explosive growth of e-payment is driven on the sound platform offered by e-payment on the sound platform offered by e-payment technologiestechnologies …!…!
eCommerce – Few examples
Fund Transfers Bill Payments Ticketing &
Reservation Prepaid card Top-
ups Broking Auctions Gaming
Live happenings across World !!
Shopping
Ticketing
Bill Payments
Fund Transfers
Mobile Top-up
And more ...
mCommerce
Transaction brokers/ Payment Enablers
Act as “mBusiness store front” ( e.g.: mShopping)
Role of Infomediaries Proof Of Purchase
Mobile Airline Ticketing
Mobile Shopping
Mobile Stock Trading
Mobile Movie ticketing
Third party Mobile Service Providers/Mobile Operators/Service Aggregators
Banks/ Credit card Companies
From payments to e-payments
Source: Using the mobile device to identify and pay for services; Jason Andersson; Ericsson AB;2002 April
India : Increased Usage of e-Channels @ ICICI Bank
Share of transactions
in March 2000
Channel
2%Internet
3%ATMs
94%Branches
Share of transactions in September
2005
15%
40%
30%
Call centre & mobile 15%1%
However..
India remains an overwhelming cash based economy
More than 90% PCE made with cash
Agenda
Background
e-Payment Initiatives
In Conclusion
Benefits and Key Focus Areas
Cards
Drivers of migrating payments through cards
Spend on cards in India is only about 1% of PCE
Number of cards has increased from 7 Mn in 2000 to 44 Mn in 2004 (CAGR 55%)
Usage up from 2 Bn USD in 2000 to 22 Bn USD in 2004
Drivers of migrating payments through cards
Innovative Product Propositionbacked by Operations & Service
ExcellenceDrivers
Innovative Product Proposition
Co-branded proposition to drive Loyalty and Incentive to use
Co-Branded Cards
Example
ICICI Bank HPCL Credit Card The largest VISA co-brand in
AsiaConstitutes a growing
proportion of total card issues - 42% in ’04 to 45% in ’05
Fuel spends 2.5 times more than spends on regular cards
Innovative Product PropositionTravel CardWider acceptability and greater
securityMultiple currencies and
denominationsSpends on Travel Cards increasing
steadily
Travel Card
Spends on Travel Card is Increasing
0%
20%
40%
60%
80%
100%
FY'04 FY'05 FY'06
Travel Cards
Travellers Cheques
FY'04 FY'05 FY'06Travellers Cheques 1 1.15 1.25Travel Cards 0.02 0.1 0.25Total 1.02 1.25 1.5
Organised Market Estimate for Outbound Remittance from India ($ Bn)
Source Amex and VISA Estimates
Debit Card Volume and Spends – Asia Pacific
Debit Cards
Can revolutionalize electronic payments in India
Can be a major catalyst in changing consumer behaviour
70 % of cards in India today are Debit Cards
Usage is widening
Debit Cards
Debit Cards Performance @ICICI Bank
Increasing spends on
Debit Cards
Increasing penetration of
Debit Cards
Cards in Force (number in Mn)
0
1
2
3
4
5
6
7
8
Mar-03 Mar-04 Mar-05 Sep-05
Total Spends on Debit Cards increased more than 4.5 times over last two years
Spends per Debit Card increased 43% over last two years
Emerging Trends in Debit Cards Business
Segmentation and service Mechant rewards and loyalty
programsRelationship management
New innovations in technology e.g. wireless POS
New payment forms e.g. contactless, through mobile phones
Emerging Trends
Remittances/ Money Transfer
Card to Card Money Transfer
Cards can provide cost effective channel for remittance
Value can be loaded from bank account of sender to card of receiver
Improves efficiency and accessibility
Card based remittance
REMITTER BENEFICIARY PRODUCT
Internet
Credit /Debit Card
Card settlement system
Prepaid / Debit/ Credit
Card
Card to Card Transfer
ATM
Cash
Visa Money Transfer - Performance
SME Business
SME Business
Use of electronic channels will Increase efficiency Track expenditureImprove productivity
SME Business
Innovative Product Proposition
Credit resides on cardAbility to break up limits into
constituent partsConvenience – cash-less transactions,
multi-application, single cheque repayment
Loyalty – attractive rewards pointsComplete MIS to users
Benefits
Cashless transaction and credit facilities for closed user group environment
Fleet Card
Innovative Product Proposition
Pre-paid and credit versions Partnership with leading oil
companiesWorking capital requirements of
transporters (goods available at oil company outlets)
To be extended for multi-applications i.e. toll, spare parts etc.
656812 DriveTrack fleet cards already issued and in use
ICICI Bank Fleet Cards
Rural / Agri Business
Rural and Agricultural Economy
Technology and electronic payment systems can be the key drivers to help us reach out to the rural / agri population through cost effective modes of delivery
Rural and Agri Business
Innovative Product Proposition
Low cost payment mode for use in Rural / Agri economy
Farmer Card
Easy access to credit – enhanced reach through low-cost ATMs & merchant outlets
Faster updation & access to repayments – electronic transactions
Reduced financing cost – amount utilized when needed
Removal of cheque & consequent delays
Benefits
Innovative Product PropositionLoans to farmers for agricultural use
(including inputs )Limit resides on cardUsage
Cash withdrawal from ICICI bank ATMs
POS usage through ICICI Bank POS only
Other services through local bank branches
Eg. Loans to tobacco farmers, sugarcane farmers etc
Top rural ATM currently handles approx. 350 transactions/day
ICICI Bank Kisan Card
Government Sector
Government Sector – A big potential
Procurement/ PurchaseTax Collection (Filing of returns on
the net)Distribution of pension on cardsGovernment bills (e-governance)
Government Sector
Government Sector – A big potential
Will make government transactions more transparent
Will reduce administrative paperwork
Government Sector
Internet
Evolution of Internet Banking
Access to Basic Account
Information
Transfer from one account to
another for same customer within the Bank
Transfer to other accounts across
the Bank
Transfer to other customer accounts with
the Bank
Other Value Added
transactions like Bill Pay, Online Bancassurance
ICICIBank.com
Online Demand DraftMoney Order OnlineSeamless BillpayPure Gold OnlineBureau De ChangeMutual Funds OnlineOutward RemittanceBancassurance Integration
Various Services Offered
ICICIBank.com
Monthly Users: 6 lakhs
Monthly fund transfers : 5 lakhs
Monthly Bill payments : 2.33 lakhs
Users and transaction
s
Railway Online ticketing – 0.3 Mn tickets online to 3 Mn tickets in 2006
Mobile
Evolution of Mobile Banking
To Pull services
ICICI Bank Offerings Account Balance Inquiry Last 3 transactions Cheque Status Inquiry Stop Cheque Request. Cheque Book Request Bill payments Payment due date Reward points for redemption Demat balance enquiry Transaction status Bill Details
From Push Services
ICICI Bank Offerings Account Debit/Credit - When bank
A/c is debited by Rs.5000/- or more,as specified by customer
Cheque Bounce intimation Balance above/ below Limit
specified by customer Credit card payment due date
reminder Approaching credit limit
intimation Demat account credited/debited Instruction rejection intimation
Mobile Top-up
Allows card holders to top up mobile airtime using Credit / Debit card
Potential applications:
Airline and Railway tickets
Bill payments
mChq
The first mobile-to-mobile payment option between customers & retailers
A mobile will now serve as a Secure Point of Sale (POS) terminal and payment mechanism
Simple and fully secure transaction since every transaction is pre-approved by the cardholder and digitally signed for, through a PIN number
Visa Wave
Visa Chip Card
Just 1 account for contact chip, contact less and magnetic stripe technology
Launched in Malaysia, Korea, Taiwan
For use in supermarkets, convenient stores, mega malls, quick-service restaurants
Agenda
Background
e-Payment Initiatives
In Conclusion
Benefits and Key Focus Areas
Benefits
ConvenienceLower transaction costsIncreased operational efficiencyCan help reduce the size of
informal economy
Benefits
Key Focus Areas
Need to focus on security and transaction authentication for various channels
Payer authentication – “Verified by VISA” and “ MasterCard SecureCode” programs to increase payment security
CV2/CVC2 (CVD) Verification to confirm genuineness of cards and legitimacy of account numbers
Dual authentication for Internet Banking
Security and transaction authenticati
on
Key Focus Areas
Customer education on benefits and security requirements like password protection etc of each e-payment channel
Increased penetration of the channels and devices like mobile phone, Internet, POS etc for increased acceptability and usage
Customer education
and channel penetration
Agenda
Background
e-Payment Initiatives
In Conclusion
Benefits and Key Focus Areas
In ConclusionVarious new channels for e-
payments today to complement traditional channels
Penetration of e-channels has increased substantially
New technology initiatives and platforms provides the ability to drive newer payment channels
Customer today is more responsive to adopt newer channels
In Conclusion
In Conclusion
Total number of transactions through e-payments will increase expontentially
Need to continue focus on Security of various e-channels Customer Education Penetration of enabling
infrastructure to realise true potential of e-payment
In Conclusion
Thank You