Post on 15-Feb-2017
Emerging Payment Techniques
Presented By:Mitul Jain 10030241183
Objective• To study and analyze the current as well as futuristic payment
techniques across the globe for the benefits and risks associated with them
• To come up with the best alternative with its future scope in the payment industry
Indian economy has shown strong growth in recent years, making it a USD 1.3 Trillion economy
Expected to grow at a rate of 8.9%
Cash continues to be the only mode of transactions for the 40% unbanked population in the country
33%
67%
Payments
Electronic Cash
24%
34%
33%
9%
Electronic Payments
Debit CardsECSCredit CardsFunds Transfer
Problems in Cash Economy
• Counterfeit currency is used to fund illegal activities, and adds to the ‘black’ money circulating in the economy
Fraud
• Number of notes in circulation in the Indian economy is about 49 billion, increasing at a rate of about 10% per year
Cost to Economy
• Inconvenient and carries the risk of being stolen
Inconvenience of carrying cash
• Providing the exact amount of change in any transaction is inconvenient for the consumer and the merchant
Tendering exact amount of cash
Lack of Secure Authentication
Manual Administrative
Process
Use of Cash as a Payment
instrument
Poor Accessibility to Banks/Post Offices
Payment Inefficiency
The Indian Credit Card Market
Credit card market in India is about 3 million with a value turnover of around Rs.2500 crores
Potential market of 60 million cardholders
The credit card business is a low-margin, high volume business
Utility payment is another segment where more payments are being made through plastic money since the last two years
The Indian culture doesn’t promote credit, and it is this outlook change which is the most important development for the credit card industry
Issues in Credit/Debit Payments
Hidden Cost
Limited Usage
Privacy and Security Concerns
Mobile Payments
All the current non-cash payment modes viz. credit cards, debit cards, multiple mobile payment solutions, appeal to only a small section of the ecosystem
Various modes of mobile wallets such as prepaid, direct debit, as well as postpaid exist in the market today
Recent amendments to RBI guidelines have allowed non-banks to issue mobile based semi-closed instruments, while also extending their usage to bill payments and ticketing
Mobile Penetration Reaching 97%
2010 2011 2012E 2013E 2014E 2015E0
200
400
600
800
1000
1200
1400
Mobile Penetration
Mobile PenetrationExponential (Mobile Penetration)
A combination of nearly 100% mobile penetration in India and spiraling mobile customer base makes mobile phones the perfect medium to enable non-cash retail transactions in India.
NFC Payments
Benefits of NFC payments
InteractivityRemote Multi
Application Management
Remote User Management
Evolution from the “issuer-centric” model to the “user-centric” model
Biometric Payments- Pay By Touch
Allows the consumer to pay with the touch of a finger on a fingerprint scanner linked to a payment file
The fingerprint template is typically linked to a router and transmission media necessary to clear the transaction through an automated clearinghouse
Biometric payment providers may also link captured transactions to loyalty reward programs, gift cards, discount coupons and Web access services
Benefits of Biometric Payments
Rapid Transactions Reduced Fee
Uniqueness
Key Findings
Incumbent led Innovation
Disintermediation and new paradigm
Current leaders defend the fort
New balance of power
Rapid Technological Innovation
Moderate Technological
Innovation
High Competitive
Intensity
Low Competitive
Intensity
Competitive intensity and technological innovation will shape the future of payments
Usage Pattern of Consumers
Small Ticket Item
Electronics DVD/Videos Video Games Books Clothes Grocery
18
13 1412 13
119
36
25 25 24 23 22
17
Basic Phone Smartphone
Challenges Faced
Security
Technology/Adoption
Privacy
Regulation
Cost
Reliability
Complexity
Availability
Other
71%
57%
38%
33%
32%
29%
26%
21%
6%
Success Attributes
Convenience/Accessibility
Simplicity
Security
Speed
Low Cost
User Experience
Availability
Brand Trust
Control
Scalability
Regulation
Other
81%
73%
57%
43%
43%
40%
34%
28%
24%
19%
11%
3%
The Future of Payments
NFC Biometric
Futuristic Payment
Watch the space !!!
References• Mobile Payments in India- A new frontier , www.deloite.com• www.nfcforum.com• RBI: Report of the HighLevel Group on Systems and
Procedures for Currency Distribution, 2009• 2011 Online Payment Poll• TRAI Annual Survey 2011• Raconteur: Future of Payments• http://www.nfcnews.com• http://techbiometric.com
Thank You