A study on emerging payment techniques

1. Emerging Payment Techniques
Presented By:
Mitul Jain 10030241183

2. 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

3. 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 Cards
ECS
Credit Cards
Funds Transfer

5. • 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

6. Lack of Secure
Authentication
Manual
Administrative
Process
Use of Cash as a
Payment instrument
Poor Accessibility to
Banks/Post Offices
Payment
Inefficiency

8. 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

9. Issues in Credit/Debit Payments
Privacy and Security Concerns

11. 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

12. Mobile Penetration Reaching 97%
0
200
400
600
800
1000
1200
1400
2010 2011 2012E 2013E 2014E 2015E
Mobile Penetration
Mobile Penetration
Expon. (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.

14. Benefits of NFC payments
Interactivity
Remote Multi
Application
Management
Remote User
Management
Evolution from the “issuer-centric” model to the “user-centric”
model

16. 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

17. Benefits of Biometric Payments
Rapid
Transactions
Reduced Fee
Uniqueness

19. 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

20. Usage Pattern of Consumers
18
13 14
12 13
11
9
36
25 25 24 23 22
17
Small Ticket
Item
Electronics DVD/Videos Video Games Books Clothes Grocery
Basic Phone Smartphone

21. Challenges Faced
71%
57%
38%
33%
32%
29%
26%
21%
6%
Security
Technology/Adoption
Privacy
Regulation
Cost
Reliability
Complexity
Availability
Other

22. Success Attributes
81%
73%
57%
43%
43%
40%
34%
28%
24%
19%
11%
3%
Convenience/Accessibility
Simplicity
Security
Speed
Low Cost
User Experience
Availability
Brand Trust
Control
Scalability
Regulation
Other

23. The Future of Payments
NFC Biometric
Futuristic
Payment

25. Watch the space !!!

26. 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

27. Thank You