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How should we Pay tomorrow?
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  1. How should we Pay tomorrow? H.Srikrishnan Executive Director

  2. How we Pay today? • Population: 1 Billion + • Pay by • Cash • Cheque • Card • Electronic • Credit Notes • Kind and TODAY is CHANGING

  3. Composition of Today’s Payments • CORPORATE – 30% • GOVERNMENT – 70% • RETAIL/INDIVIDUAL- Insignificant

  4. 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

  5. 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

  6. 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

  7. 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 Internet based Transaction processing / Reporting EBPP/EIPP Accepting & Processing Web Payments Bank-To-Bank Financial EDI Electronic Banking over Proprietary Network

  8. Complexity of Management Outsourced Cash Management Shared Services Centralized Financial Mgmt Decentralized Operations Time Centralization/Outsourcing

  9. North America West Europe, Japan, HK, SGP, Aus APAC, East/central Europe, Africa Adoption Trends Web-enabled, Universal payment channel Multi-bank access through single, standard open channel Direct EDI enabled channel/Proprietary Networks Low Integration/Automation Capability High Integration/Automation Capability

  10. India @ 2005: A Sanity Check Automation • Predominantly paper-based process • Gradual emergence of ECS, EFT, RTGS • Poor Internet penetration among Mid sized corporates • Offerings predominantly designed on proprietary network • Minimal inter-org information sharing • (Low proliferation of end-to-end solutions like eFinancial Supply Chain) Web-enablement Integration

  11. 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

  12. 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

  13. 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

  14. Preparing for tomorrow • Organization • National Payments Council • Payments Vision • Participation • Beyond Banks • Open systems • Platform • Communication • Security • Legal and Regulatory framework

  15. Government & Large Business RTGS Online B2B,B2C,B2G,B2E Multi Factor and Biometrics Single Sign-On B2B,B2C,B2G,B2E Multi Security Mid size Business Multi Factor P2P, P2B,G2P,B2P Two Factor Individuals & Small Business Cards E-commerce M-commerce E-commerce M-commerce Supply Chain E-commerce Supply Chain Online Exchanges