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