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How should we Pay tomorrow?
H.SrikrishnanExecutive Director
How we Pay today?
Population: 1 Billion + Pay by
Cash Cheque Card Electronic Credit Notes Kind
and TODAY is CHANGING
Composition of Today’s Payments
CORPORATE – 30%
GOVERNMENT – 70%
RETAIL/INDIVIDUAL- Insignificant
Wholesale Payments - Today
CHEQUES 1047 clearing houses + 42 MICR centres 27.5 Lac cheques daily avg volume 150,000 cr daily avg value
VS
RTGS 650 + centers & 10,000 + branches 60,000 cr daily avg volume
Data Source RBI
Retail Payments-Today
Cards 50 Million + cards 16,000+ ATM’s 150,000+ POS 20,000Cr + Non Cash Payments
VS
E-Commerce B2C 540 crs in 2004-5 Cards , Direct Debit, Cash on Delivery
Data source Venture Infotek & Internet and Online Assn. of India
Need For Expertise
Micro vs Macro Government Payments Private /Public Partnerships
» Convergence
Barter vs Real Air-miles to Cash
Real time vs Near Time Instant Delayed Batch
Physical vs Remote
New Business Models drive Payments Business Models
eProcurement eInvoicing eFinancial Supply Chain On-line exchange
Automation, integration & Web-enablement as Levers
Banks: Shift from Transaction focus to Value driven Solution focus
Electronic Banking Electronic Banking over Proprietary over Proprietary
NetworkNetwork
Bank-To-BankBank-To-BankFinancial EDIFinancial EDI
EBPP/EIPPEBPP/EIPP
Accepting & Accepting & ProcessingProcessing
Web PaymentsWeb Payments
Internet based Internet based Transaction processing /Transaction processing /
ReportingReporting
Centralization/Outsourcing
Time
Com
ple
xit
y o
f M
an
ag
em
en
t
Decentralized Operations
Centralized Financial
Mgmt
Shared Services
Outsourced Cash
Management
Adoption Trends
Web-enabled, Universal payment channel
Multi-bank access through single, standard open channel
Direct EDI enabled channel/Proprietary Networks
North America
West Europe, Japan, HK, SGP, Aus
APAC, East/central
Europe, Africa
Low Integration/Automation Capability
High Integration/Automation Capability
India @ 2005: A Sanity CheckAutomation
Web-enablement Integration
• Predominantly paper-based process
• Gradual emergence of ECS, EFT, RTGS
•Minimal inter-org information sharing
(Low proliferation of end-to-end solutions like eFinancial Supply Chain)
• Poor Internet penetration among Mid sized corporates
• Offerings predominantly designed on proprietary network
Service Ambition for Payments
Pay Who-ever When-ever in any currency
Provide Instant Value With no settlement delays
Privacy and Security guarantee. Identity establishment Authentication
How will we pay tomorrow
One wallet
Payment Remote
– Via Internet and Mobile Proximity
– Via RFID , Blue Tooth
Devices PC equivalent PDA/Mobile Smart Chip -embedded devices
Key Considerations Open systems
Banks Telcos, ISP’s, Businesses
Cost of payment Paper vs Card vs E&M commerce Division/Region, Enterprise-wide and Country wide
Security Identification and Authentication Multi-Factor Biometrics- Speech and Touch
Eco-Money Usability Environmental Friendly
Preparing for tomorrow
Organization National Payments Council Payments Vision
Participation Beyond Banks
Open systems Platform Communication Security
Legal and Regulatory framework
P2P, P2B,G2P,B2P
Cards
E-commerce
M-commerce
B2B,B2C,B2G,B2E
B2B,B2C,B2G,B2E
E-commerce
M-commerce
Supply Chain
E-commerce
Supply Chain
Online Exchanges
Two Factor
Multi Factor
Multi Factor and
Biometrics
Indi
vidu
als
&
Sm
all B
usin
ess
Mid
siz
e
Bus
ine
ssG
over
nm
ent
&
Larg
e B
usin
ess
RTGS Online
Single Sign-On
Multi Security