The Payments Council of India [PCI] which constitutes more than 100 members across representing various regulated industry players in the payments and settlements systems made a presentation to the RBI Committee on Deepening of Digital Payments [CDDP] headed by Nandan Nilekani at their office in Mumbai.

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Mr. Naveen Surya, Chairman Emeritus, PCI, Mr. Vishwas Patel, Chairman, PCI and Director Infibeam Avenues Ltd, Mr. Loney Antony, Co-Chair, PCI and Managing Director, Hitachi Payment Services and Mr. Gaurav Chopra, Executive Director, PCI met RBI and presented its key recommendations for driving financial inclusion through payments.

In its report the council has recommended a medium to long term strategy for accelerating the growth of digital payments in India backed by a regulatory regime which is conducive to enhancing parity between cash and digital payments, offering seamless access to payments and settlements infrastructure [RTGS], formation of a KYC bureau, promoting economic viability through tax incentives and exemptions, stimulating competition and offering customer choice while safeguarding transactional security and providing a level playing field to new entrants.

Considering cash is the most competitive and attractive payment option, the council has suggested that all the digital platforms especially PPIs should be allowed to seamlessly issue and allow payments and remittance transactions below INR 50,000/- with minimum KYC [mobile verified] which will enhance parity between cash and digital transactions.

Currently only Prepaid Payment Instruments [PPIs] have been partially allowed direct access to payment transactions through card networks and UPI; the council has suggested all payment entities should be given seamless access to all payment infrastructure and settlements systems. Interoperability to PPIs which is currently only allowed to merchants and remittances at the domestic level should be extended to foreign merchants and foreign inward remittances.

Other Key suggestions made by PCI

  • Allowing cash out from PPIs through ATMs and agent networks for domestic remittances of unbanked population
  • Leveraging Electronic Benefit Transfer [EBT] and Direct Benefit Transfer [DBT] processing through PPIs as an efficient and economical solutions
  • Conversion of all PPIs to full KYC accounts within 12 months from issuance not to be time bound but the conversion should be based on the value and additional features availed by the customers

The council has suggested the non-bank merchant acquirers to be allowed to take direct membership with card networks to acquire merchants under their own BIN. Also settlements being an important function, the council has recommended a seamless access for non-bank entities to key payment systems like RTGS, and NEFT among others.

The council has suggested NBFCs to be allowed the issuance of credit card [physical or digital form factor]. PCI believes the credit card is one of the most critical instruments for the growth of digital payments in India. While approximately 40 million credit cards have been issued so far the credit bureau hosts 400 million+ consumer records, clearly indicating to the untapped market base. The council is therefore betting big on the credit card issuance framework by NBFCs to be play a catalyst for the growth of digital payments across the economy.

On the occasion, Naveen Surya, Chairman Emeritus, PCI, said

The monthly retail payments currently are aggregated at approximately USD $275 billion and we are eyeing for USD $500 billion in the next two years. This clearly indicates our country is on the verge of becoming a digital superpower.

However cash still reigns supreme and to digitize the cash use in the country we need to build a robust digital payments ecosystem besides enhancing customer faith in the industry. It was a great opportunity for us to present our recommendations to CDDP and we are confident that Mr. Nilekani who has played a critical role in building India’s digital story will help us transform the sector preparing it for the next phase of growth.

Vishwas Patel, Chairman, PCI on behalf of the council suggested considering a KYC bureau for the entire payments system owing to technological challenges in the central KYC registry system [cKYC]. He has recommended access to eKYC or digital KYC framework and an inter-operable KYC infrastructure as urgent and critical to improve customer acquisition cost across payment services besides avoiding cost duplication.

He also stated that ‘Government support in form of GST tax exemption in services like Domestic Remittance, Import duty on PoS etc. is key to drive investment and penetration in the middle and bottom of the customer pyramid.

The council has recommended the capital and net owned funds [NoF] should be proportionate to business as it is critical from compliance cost perspective. Besides they have suggested the payment service providers [PSPs] to be allowed to seamlessly cross sell third party financial products like credit, insurance [medical/accident] among others which will nurture sustenance of the business model while offering convenience to customers.

According to Loney Antony, Co-Chair, PCI and Managing Director, Hitachi Payment Services

All viable and profitable payment initiatives should be fully opened up to the market on a continuous basis to drive competition and innovation via ‘on tap licensing policy’ rather than a onetime ‘window’ approach. Besides all payment entities should have the option to move up or down the value chain provided financial net worth criterion is being met with.

Also in the absence of a Regulatory Sandbox an appropriate framework should run continuous pilots on new ideas and concepts under the industry and regulator’s supervision to foster innovation.

The council strongly recommends offering end customers the choice of deciding the level of KYC for payment transactions basis his frequency, convenience and risk appetite. They have also proposed for an independent security standard/ certification to establish online payment systems as ‘Safe to Pay’ based on fulfillment of the safety and security requirements, so as to give customers the trust to transact online in a safe and secure manner besides a framework for sharing of fraud related data [negative list of individuals] by PSPs to an independent body for better vigilance and controls.

The board of payment and settlements system to be strengthened with a full-time independent payment expert was another important suggestion.

About Payments Council of India [PCI]

Payments Council of India [PCI] is a part of Internet and Mobile Association of India and represents more than 100 players in the payments and settlement systems. Its objective is to address and help resolve various industry level issues and barriers which require discussion and action. The important stakeholders are prepaid payment issuers, payments banks, merchant aggregators and acquirers, payments networks, BBPOUs, UPI facilitators and International Remittances facilitators.

DCB Bank, a new generation private sector bank and Slonkit, India’s first money management app linked to a VISA Card, have partnered to create a digital and cashless ecosystem for educational institutions across India. Slonkit partners with colleges from all major cities and towns in India under the Slonkit Campus Partnership Programme [SCPP].

Under SCPP, students are empowered with a Slonkit VISA Card linked to the Slonkit mobile app. The Slonkit Card can be used anywhere in India – both online and at merchant outlets. Students can pay their college fees and make miscellaneous payments using the Slonkit Card. They can also avail exciting offers at national and hyper-local merchant outlets. The Slonkit app enables students to create budgets and to track and analyze their expenses across categories such as food, travel, shopping, entertainment, etc.

In addition to empowering students to practice money management, Slonkit also transforms colleges digitally and facilitates seamless management of the administrative function. Slonkit also enables these colleges to monitor ‘expense’ reports at ‘in-campus’ merchants. It empowers colleges with a robust digital channel to communicate with students in real-time. Students receive these communications as notifications on the Slonkit mobile app. RFID-enabled Slonkit Cards can equip educational institutions to manage access and attendance easily as well.

Commenting on the development, Praveen Kutty, Head – Retail and SME Banking, DCB Bank said

Financial prudence is a means to enjoy a good lifestyle. It is important to inculcate this habit at a young age. Slonkit enables teenagers and young adults to practice smart money management and financial prudence. Allying with educational institutions will drive adoption of this nifty digital and cashless payments solution for individuals and institutions as well.

Speaking about the partnership, Javed Tapia, Founder, Slonkit, said

Slonkit caters to the essential yet unaddressed area of teaching financial prudence to the next generation. It engages students digitally and empowers them to learn and practice smart money management. Slonkit enables education institutions to seamlessly manage fee collection, in-campus payments, attendance, and communication with students. With DCB Bank, we will create India’s largest cashless ecosystem focussed on the education sector.

About Slonkit

Slonkit is India’s first money management app linked to a prepaid VISA card. Slonkit is powered by VISA, the world’s leading payment network and DCB Bank, India’s leading emerging private sector bank. The app is linked to a prepaid VISA card and enables teenagers and young adults to manage money smartly. Available on Android and iOS, Slonkit app can be downloaded from the Play Store or App Store. Parents of children aged 10~18 can order a Slonkit card from the app and give monthly allowances to their child. Slonkit allows parents to add money instantly on to the card through internet banking, debit card or credit card. They can set budgets for themselves using the Slonkit app, view expenses across categories, and avail a host of exciting offers.

NiYO [earlier coverage here], the new-age digital banking solutions provider for salaried employees, has launched NiYO Global Travel Card, which is the first-ever forex card with ‘zero forex mark-up’. Travelers, using this card, will not pay any currency exchange premium and international transaction fees – unlike a regular forex card.

With the NiYO Global Travel Card in her pocket, the overseas traveller will effectively have no need for the usual multi-currency forex cards or travellers’ cheques – all the while making international transactions cost-effective across 150-plus countries and 35 million merchants worldwide.

Besides the cost-effective feature, NiYO Global Card also offers instant digital on-boarding, convenient loading from the user’s bank account via NEFT/IMPS. The card is supported by a cutting-edge mobile app, which gives users the ability to lock and unlock either the full card or a payment channel anytime, anywhere in the world. The app also provides real-time notifications on usage, exchange rates and refunds, while helping users find convenient ATM locations, avail nearby offers – thus making it one of the most modern cards in the world today.

Further, business travellers can submit claims on-the-go by adding bills for each transaction right in the app. These claims can be instantaneously approved by their employer organizations via the NiYO Corporate Portal.

Vinay Bagri, Co-founder & CEO, NiYO said

The forex card market in India is worth $17 billion; around 20 million people are expected to travel abroad this year. By 2020, this number will rise to 50 million. With such a staggering number of Indians travelling abroad, we aim to capture a lion’s share of the market.

Virender Bisht, Co-founder & CTO, NiYO said

Our aim has been to facilitate hassle-free experience among our customer. Forex is one of the key components for travel and remains a concern. International travellers are always burdened with high currency exchange rate charged by banks, which varies between 1~3% of the amount transacted. Banks also charge either a flat fee or a set percentage of the transaction amount in addition to the currency exchange charge.

Moreover, people are also very worried about card security abroad. This card is a one-stop solution for all of these problems. We have invested our best effort and technology in the designing process to provide the safety feature along with other components. The card has already been reviewed and appreciated by many top executives from the India Inc. and today, we are glad to present it to our customers at large.

Founded by Vinay Bagri and Virender Bisht, NiYO works at the intersection of financial services, HR and technology. NiYO was launched in July 2015 and since then has already clocked in more than 3000 corporates and is being used by over 5 Lakh salaried employees in these organizations.

About NiYO

NiYO is a fintech startup conceptualized in 2015 that offers digital banking solutions for salaried employees across various sectors. Currently, with over 5 Lakh customers and relationships with 3000 corporates, NiYO is growing to be a truly trusted digital banking platform across India.

CASHe, India’s most preferred digital lending company for young salaried millennials, promoted by serial entrepreneur and private equity investor V. Raman Kumar, announced that it has launched a unique fund transfer facility called ‘BuddyTransfer’ for its users. With BuddyTransfer, CASHe users can now authorize to send part of their loan to up to five contacts from their phonebook.

The maximum amount that can be transferred to each contact with this facility is Rs 2,000. The company further stated that it wanted to make it easier for its users to send money to friends and family by simply choosing names from their phone contact list and authorize a money transfer directly to their bank accounts. BuddyTransfer is built on a Blockchain infrastructure which keeps the transactions safe, secure and transparent.

Here is how BuddyTransfer works

  • To use this feature, the user has to select the desired loan amount from CASHe and request for a loan.
  • The user gets an option to transfer part of his loan by choosing ‘Transfer to your Friend’ feature where he can select up to five names from his phone contact list to whom he wishes to send the money.
  • He can choose the desired amount [Maximum Rs 2,000] per contact and confirm the details in the following screen.
  • Once the loan is approved, CASHe will initiate the fund transfer on behalf of the user to the selected recipients.

The user can authorize a fund transfer to anybody in India through his phone contact list regardless of they being a CASHe user or not. If the fund transfer is initiated to a non-CASHe user, they will get a notification through SMS informing them on the impending fund transfer along with a link to download the CASHe app from the app stores. The fund transfer will be successful only if the recipient downloads the app, fills the necessary details along with his bank account information and submit the necessary KYC documents.

This feature will be particularly useful to people who need to transfer urgent cash to their family and friends. BuddyTransfer allows users to transfer money to any contact in their phonebook 24 hours a day, seven days a week. CASHe customers can transfer money to any person in India, once they download the app and register. The app is widely accessible as it works on Android and iOS operating systems.

V. Raman Kumar, Chairman, CASHe, said

CASHe has always tried to be a leader in harnessing new technologies to bring cutting-edge user experience. This is the first time that a Blockchain infrastructure is being used to facilitate actual money transfer in a fin-tech application in India. This is an industry first and an outstanding achievement for Team CASHe.

Ketan Patel, CEO, CASHe, said

Customer convenience remains central to all our efforts. We are happy to be the first amongst our peers to launch this feature for our customers on our industry-leading, cutting-edge lending platform. We listen closely to what our customers say.

Their ideas and feedback help us improve our current product offerings and help us launch future innovations. BuddyTransfer is launched in response to a growing need of our valued customer base and we are happy to offer this new feature to them. With BuddyTransfer, we look forward to further strengthening our leading position in the digital lending market in India.

CASHe provides hassle-free loans with its app enabled documentation and loan disbursal/repayment process. Powered by its industry-first algorithm driven credit scoring platform, The Social Loan Quotient [SLQ], CASHe quickly determines a user’s credit worthiness by using multiple unique data points to arrive at a distinct credit profile of the customer.

SLQ is transforming the traditional credit rating measurements thereby providing immediate loans to the under-served young professionals who are kept out by traditional credit rating and banking systems. CASHe is completely automated and requires no personal intervention and no physical documentation. The average time taken for a loan to be disbursed is about 8 minutes, subject to proper submission of all documents.

About CASHe

CASHe is India’s most preferred digital lending company for young salaried millennials. CASHe provides immediate short-term personal loans to young professionals based on their social profile, merit and earning potential using its proprietary algorithm-based machine learning platform. CASHe is completely automated and requires no personal intervention and no physical documentation. The average time taken for a loan to be disbursed is about 8 minutes, subject to proper submission of all documents. CASHe’s target audience is young working professionals in the age group of 23~35 years. CASHe offers loans from Rs 10,000 to Rs 2,00,000 payable over 15~ 180 days.

Fino Paytech, the payments technology company and promoter of Fino Payments Bank, has invested in CityCash [Tap Smart Data Information Services Private Limited], a Mumbai-based fintech start-up, for an undisclosed stake. The investment is in line with Fino’s strategy of providing banking and payments solutions to emerging India.

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The two companies have joined hands to design an ecosystem for payments wherein Fino will be the issuance and settlement institution of the prepaid payment instrument and CityCash will offer its NFC-based cashless payments technology and micro-payment merchant acquisition.

India’s public transport system of 150000 buses carries over 70 million commuters every day, clocking an annual turnover of about INR 50000 crores, of which 95% transactions happen in cash. There is a massive opportunity to digitize this sector using low cost NFC based TAP and PAY solution on the lines of highly successful Oyster card of London and Octopus card of Hong Kong. Customers can similarly use Fino and CityCash co-branded card for all retail micro-payments apart from other transport payments such as for auto and cabs.

The partnership with Fino shall bring the most extensive network of BC agents across the country to enable physical card issuance and on-going service of the customers. Some large state and city bus corporations have shown tremendous interest in the Fino and CityCash payment solution and implementation is at advanced stages.

As a part of its digital strategy to engage with customers, Fino has already launched a suite of products such as RuPay debit cards, mobile banking app BPay, UPI, Net banking and FasTag for toll payments.

These products along with NFC based tap and pay solutions would allow Fino to reach out and facilitate digital payments for a wider segment in line with Digital India initiative of the Government.

To provide additional source of income to over 25,000 brokers associated with it, Square Yards is introducing mortgage option on its ‘Square Connect Mobile App‘ through which brokers will be able to offer home and other loans to their clients at best rates chosen from a clutch of 90 partner banks and NBFCs.

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Brokers will now be able to provide their clients the best solution for loans, an important component in property purchase process in most the cases and earn higher commission for themselves as compared to what they would have earned by selling only property. This will also help Square Capital, the mortgage arm of Square Yards, to achieve multi-fold growth in the current levels of facilitation of around Rs 300 crore disbursements every month.

The brokers will be able to help their clients take advantage of cutting-edge software solutions that Square Capital uses for getting through a maze of complex valuation decisions at the hands of banks and excessive documentation. The technology related solutions that Square Capital uses enables it find out accurate eligibility of the applicant linked to credit bureau and various banks’ credit policies, ability to perform e-KYC of the applicants through integration with NSDL and direct integration with banks’ loan originating system.

Tanuj Shori, Co-Founder and CEO, Square Yards, said

The channel partners associated with our company are a huge asset and we are constantly on a look out for ways to make the partnership we have with them stronger by offering them new technology tools as well as by supplementing their income.

The new option of mortgage being added on the Square Connect App will help the channel partners in providing more touchpoints to their clients in the property buying process and consequently generating high income for themselves. The banks and NBFCs associated with us will also be able to get business from newer geographies as our channel partners are spread far and wide in the country.

The Square Connect division in the company was started in 2016 and lists large inventories of Grade A properties across India and the globe that can be marketed by channel partners from their mobile in an instant to earn higher commissions. The App not only helps channel partners maintain a personalized account to track projects and loan transactions together with client’s details, status and brokerage earned, it also helps them get free leads. The division accounts for 15~20 percent of the real estate business of Square Yards which now touching USD 30 million in revenues with USD 750 million in Gross Transactional Value [GTV].

Started little over 2 years ago, Square Capital has become the largest distributor for secured mortgage industry in India. Square Capital facilitates about Rs 300 crore of loan disbursements every month with home loans and loans against property contributing around 75 percent of the overall volume. The network of 90 banks and NBFCs that are associated with Square Capital is constantly growing.

About Square Yards

Square Yards is a technology-enabled, global real estate marketplace and India’s largest proptech + fintech player that operates O2O transaction platform for Real estate & Mortgages. Square Yards platform covers the full real-estate journey from search, discovery to transactions, mortgages and post-sales service – fully integrating buyers to an extensive network of partners. Square Yards has achieved a significant scale in facilitating real estate investments worth more than USD $2 Billion through its direct presence of more than 2000 employees in in 20+ Indian cities and 10+ International locations.

CASHe, India’s most preferred digital lending company for young salaried millennials, promoted by serial entrepreneur and private equity investor Mr. V. Raman Kumar, announced its partnership with Mswipe, India’s leading mobile POS payment services provider, to launch the CASHe emi Mcards for its customers. The co-branded emi Mcard will give customers an instant pre-approved credit of up to Rs 10,000 with a 3 equated monthly repayment plan. The emi Mcard will be an additional option for the customers to choose from the existing portfolio of loan products available on the app.

Unlike other card schemes, purchases made from the CASHe emi [Electronic Mswipe Identification] Mcards will automatically be converted into equated monthly installments payable over a period of three months at lower interest rates. The customer can make a minimum purchase of Rs 2,500 per transaction up to the limit of Rs 10,000 set on the card. The CASHe emi Mcard can be used at any merchant or online store which has a Mswipe terminal or is a registered Mswipe merchant.

The CASHe app also enables users to find merchants who accept emi Mcards. Currently, Mswipe has a payment network of over 350,000 terminals spread across 650 cities in India.

The customer can make multiple transactions in a day not exceeding Rs 10,000. All transactions for the day will be converted into a single loan on which his equated monthly installment-based repayment plan will be set by CASHe. There will be no transactional or processing fee on making the purchase for the cardholder. Once the purchase is made within the assigned credit limit, the user can make the installment payments directly to CASHe.

The user can further track the equated monthly installment payment plan on the CASHe app itself. Customers who chooses to opt for the CASHe emi Mcard loan option on the CASHe app will be issued a physical card in their name along with a welcome kit which will have a user manual to operate the card. The company further stated that it will increase the pre-approved credit limit of the card to a higher value soon.

Ketan Patel, CEO – CASHe, said

We are happy to join hands with Mswipe, a formidable player in the merchant POS services business, and offer a compelling solution to enable CASHe customers to avail electronic credit at a wide range of merchants across the country.  With the launch of the CASHe emi Mcard, we are driving an altogether new level of attractive and hassle- free loan experience at the point-of-sale. With this value add, we are adding an affordable equated monthly installment payback options without the need for credit cards, which we hope will provide a better purchasing experience for the CASHe customers.

Manish Patel, Founder & CEO – Mswipe said

We are excited to launch a first of its kind consumer loan solution through our emi Mcards. As the country’s leading independent POS merchant acquirer, we have seen the importance of easy access to credit at the point of sale. These emi Mcards are a win-win for every stakeholder. For the customers, emi Mcards represent the simplest way to use their pre-approved loan. For NBFCs like CASHe, emi Mcards provide them complete control and a picture of how their loan is being used. For our merchants, these cards mean additional business and customers.

About CASHe

CASHe is India’s most preferred digital lending company for young salaried millennials. CASHe provides immediate short-term personal loans to young professionals based on their social profile, merit and earning potential using its proprietary algorithm-based machine learning platform.

In April 2016, Aeries Financial Technologies Pvt. Ltd, launched its innovative technology-driven lending platform for the young, urban millennials. CASHe provides almost instantaneous loans on-demand. CASHe’s target audience is young working professionals in the age group of 23-35 years. CASHe offers loans from Rs 10,000 to Rs 2,00,000 payable over 15~180 days. For more information, please visit CASHe

Infosys Finacle, part of EdgeVerve Systems, a product subsidiary of Infosys and Efma, a global not-for-profit organization, launched the 10th Annual Study of Innovation in Retail Banking. The report is authored by Jim Marous, Publisher of the Digital Banking Report and Co-Publisher of The Financial Brand. Celebrating the 10th anniversary of the research, the report explores a decade of banking innovation and looks ahead at what’s in store for banking in 2022.

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The research, in which over 300 banks globally participated, found that respondents see Open Banking APIs as the top technology for the future of innovation, with it being stronger than ’emerging’ areas such as machine learning, chatbots and RPA. The research found that in the short term, banks will leverage Open Banking for compliance such as the Payment Services Directive [Europe], Unified Payments Interface [India] and New Payments Platform [Australia].

The research also found that overall, organizations are taking a strategic perspective on the need for innovation ROI. In 2017, 31% of firms had an innovation ROI perspective of one year, compared to only 17% this year. In addition, 63% looked for an ROI in 1~3 years as opposed to 54% in 2017.

Respondents believe that retail banks consider digital commerce platforms [such as Alibaba] and technology giants as the innovation leaders for 2022. Similar to previous years, the greatest impact of transformation is expected to be in the areas of payments, mobile wallets and lending in the next three years.

Key findings include

Investment in banking innovation

  • With legacy technology being identified amongst the top three barriers for innovation, 74% banks are increasing investments in technology modernization.
  • 50% of the organizations believe that product delivery channels followed by new product innovations will be where most innovation will take place in the next four years.

Impact of modern technologies

  • Open banking APIs are seen as the top technology impacting banking in the next year by 65% of the respondents
  • Banks rated only a moderate level of organizational readiness to leverage technologies to deliver expected business outcomes for open banking, conversational interfaces and cloud processing.

Deploying and measuring innovation

  • The need to collaborate with external partners continues to be the highest focus when sourcing talent for innovation.
  • Innovation over the next 12 months will be delivered through investments in co-innovation with other partners, a dedicated innovation team along with collaboration with large tech firms.
  • The presence of an innovation officer increased significantly over the past year. In 2017, only 37% of the organizations surveyed had a dedicated executive to lead the innovation process. In 2018, the number jumped to 48%.

Banking in 2022

  • After existing digital channels [mobile and online], digital assistants, social media and third party channels are expected to be the primary channels for banking by 2022.
  • Close to half of the respondents believe that less than 40% of the current workload would move to public cloud by 2022.
  • According to 70% of the respondents, AI is expected to have a significant impact in transforming customer service/support by 2022.

Vincent Bastid, CEO, Efma, said

In recent years, banking institutions have been facing disruption head-on, with advancements in customer service, personalization and mobile applications through a combination of Open APIs, AI and machine learning. The 10th edition of this report highlights advancements made in the last decade but also predicts a dramatic transformation in payments, mobile wallets and lending.

Sanat Rao, Chief Business Officer and Global Head, Infosys Finacle, said

The 10th edition of the Innovation in Retail Banking report strongly illustrates the pace at which the traditional banking model is evolving. The need to invest in a solid platform strategy focused on business benefits and more compelling experiences for customers, employees and partners is central to remain competitive. This report will help banks sharpen their digital vision and benchmark their plans with the industry peers.

Jim Marous, Owner and Publisher of the Digital Banking Report and author of Study, said

More than ever, the importance of an innovation culture became apparent for organizations that want to become leaders in both digital transformation and customer experience. There is a significant shift occurring in the banking industry, with more organizations looking to innovate in areas directly impacting the consumer, as opposed to building innovations that only impact efficiency and technology improvements.

Additional Resources