Saturday, December 10, 2011

Would you be interested to invest in Indian Infrastructure Bonds through your Credit Card?

I was thinking aloud, how to kill multiple birds with a single stone.

What are the multiple birds?
01) Increase the average spending on Credit Cards.
02) Increase the reward points
03) Introduce a new payment method for the Infrastructure Bonds.
04) Increase the catchment area for Infrastructure Bonds.
05) Increase the average spending on Debit Cards.
06) Increase the catchment area for Internet Banking.

And, What is the single stone?
A) ePayments.

Ok, so you do not believe it? Well read on.

At present the only option to apply to Infrastructure Bonds, is via the old fashioned way i.e Paper Instruments via Cheque Draft. Few Brokerage houses allow the Investor to apply through their website, with an integrated  Payment Gateway. However, payment via Credit Card/Debit Card is still in their basket of options.

This is where my idea comes into play.

A basic road-map is as under :
01) The Broker integrates the Payment Gateway to accept Credit/Debit Cards too.
02) The investor has the option of choosing to pay via Credit / Debit Card at the time of ‘make payment’, option.

Nothing more, Nothing less.

A) The credit card issuing company sees an increase in their turnover.
B) The investor gets a 45 days cushion to pay the credit bills. Of course, this is dependant on the credit card billing cycle.
C) The credit card holder gains reward points on his/her credit card.
D) The overall subscription to the Infrastructure Bonds zooms up.

Hm, money back offer on Infrastructure Bonds will be a non-viable proposition for the Credit Card companies.

So, who will be the first to offer this facility in India?

Friday, December 9, 2011

Epass-SBI EZ-PAY CARD. The Scholarship disbursement mode.

An untapped area of ePayments is the Government’s scholarship arena. All State Governments extend various types of student scholarships.

The mode of disbursement is via paper based cheques.

Few Governments have started exploring the ePayments mode for disbursements of scholarships.

Andhra Pradesh has moved the complete Scholarship cycle into electronic mode i.e Application till disbursement of scholarship.

The website has an interesting name too epass @
The website has been developed by Centre for Good Governance.

As a safe ePayments practitioner, what is fascinating is the integration of ePayments mode for the scholarship disbursement mode.

AP government has tied up with State Bank of India for the same.
The solution being utilised is the SBI Prepaid Card - EZpay

More on this can be read @

Students have the option of receiving the scholarship amount to their Banks accounts via the NEFT mode or opting for the SBI Prepaid Card-EZPay.

The benefits of SBI Prepaid Card-EZPay are :
01) Students need not have a bank account.
02) The amount can be withdrawn at SBI Group ATM’s.
03) The card can be used at any Visa enabled POS terminal. This is the best feature as the complete cycle is in eMode only.
04) Balance details can be viewed at SBI Group ATM’s or online.
05) The need for a maintaining any balance in the student’s bank account is eliminated.

The integration of EZCard for internet shopping would be the next step, to popularise this Prepaid.

Thursday, December 8, 2011

National Common Mobility Card - India - finally live.

A new entrant in the ePayments arena,  National Common Mobility Card (NCMC) was formally launched by  union minister for urban development, Kamal Nath on 06/12/2011,  during Urban Mobility India 2011 conference.

The NCMC has been branded as ''More'' signifying the national bird ''Peacock''.
Further in English, “more”, means  that the user get more and more by using this card.

What is the basic idea of NCMC ?
In simple terms, it is another mode of ePayments i.e electronic wallet.

NCMC has been promoted by Urban Development Ministry headed by Shri Kamal Nath.

The idea of NCMC is to enable the user with a single transport system that provides seamless, efficient and hassle free travel experience across the length and breadth of the country.

The ministry of urban development also plans of implementing a single ticketing system for all modes of public transport in India but also for parking and toll.

The implementation of 'More' will be partly funded by central government under the JNNURM scheme, covering the buses sanctioned under the scheme.

To popularise NCMC, Ministry of Urban Development, has stipulated the introduction of NCMC as a major  conditions, for financing  Urban Transport programs. This is akin to a carrot and stick policy.

This is a common marketing technique!!

UTI Infrastructure Technology and Services (UTIITSL), a government of India and ministry of finance company, has been appointed as the technology aggregator to implement NCMC project.

The first client under NCMC is Jaipur City Transport Services limited i.e  JCTSL, Jaipur and is expected to roll out by the end of this financial year.

Talks with Karnataka State Road Transport Corporation, Bangalore and Bhopal Municipal Corporation are also at advanced stage.

The Centre will spearhead a national programme of inter-operable automated fare collection system (AFCS) for the purpose.

The future of NCMC-More is on various modes of transportation like metro, bus, train, taxi and ferry. NCMC can  also be used to pay toll across the country.

The spin-off of NCMC  would be felt in Public Transport Organisations, by significantly increasing overall efficiency, providing control and better management of tariff structure, reducing cash handling and hence lesser pilferage and fraud.

The possibilities are endless. The technology is in place and now co-ordination between various departmental personnel is required. And, hence, the complete benefits of NCMC can be enjoyed in another 5 years.

Wednesday, December 7, 2011

eCheque - The time has come in India

In simple terms, an eCheque is an electronic funds transfer that withdraws money directly from your bank account. It's just like writing a cheque, only it is done electronically

Worldwide it is familar to Paypal consumers.

As per Paypal website,
eCheques are payments from buyers who have attached their bank details to their PayPal account, but do not have a valid backup funding source such as a credit or debit card. It may also be that their backup card has expired. So to ensure that a secure payment can still made, an eCheque is generated.

Sending an eCheque is a bit like sending someone a paper cheque, only it is done electronically. And because it is processed by PayPal, the payment is also protected and the sender and recipient do not need to share their financial details.

In Indian context, ICICI Bank, way back in 2002 had introduced this concept. This was built around RBI EFT system. However, as EFT has since been discontinued, ICICI’s Bank eCheque too has been discontinued.

RBI’s EFT was popular, prior to NEFT/RTGS taking off. Once, NEFT/RTGS started becoming popular, the EFT slowly died a natural death.

In Dec 2011, in a speech by deliverd by Shri G Padmanabhan, Executive Director, Reserve Bank of India, at the Foundation Day of Catholic Syrian Bank, Thrissur on 26/11/2011, titled ‘Payment System Issues and Challenges’, the work e-cheque was again mentioned.

The major drawback of the current ePayment modes in India i.e RTGS/NEFT/POS Terminals  Card, do not have the facility of Post-dated concept. All RTGS/NEFT/POS Terminals’ transactions are instant i.e the remitter’s account is debited instantly.

The remitter cannot issue Post-dated ePayment instructions. Of course, it is an interesting discussion on the need for Post-dated physical cheques.

Electronic Clearing Services(Debit) services to some extent offer Post-dated facility for ePayments. However, these have a very limited scope and do not offer the flexibility of true eCheques

At the highest policy levels, the eCheque as a concept seems to have germinated. Hence, this will become a reality in India, sooner or later.

Thursday, December 1, 2011

Axis Bank’s (India) Instant Money Transfer

In the arena of innovative ePayment Products, Axis Bank had launched an Instant Money Transfer product in September 2010. It is more than 1 year of its launch, and the transctions via IMT seem to be on the increase.

These new cutting-edge ePayment options, aid in increasing the reach of the Banking network to the unbanked and are a part of the Financial Inclusion drive.

RBI is clear that all path-breaking payment products have to designed around the Banking channel only. At least one leg of the transaction has to be via the Bank Channel.

Keeping this in view, IMT is designed to benefit the Unbanked, but via the Banking channel.

In short, in IMT, the Sender has to have a bank account, whereas the Receiver need not have a bank account.

More details of the Axis Bank’s IMT service can be accessed @ Axis Bank-IMT-FAQ's

The IMT funds receiver, if he/she does not have an account with Axis Bank, has to do an one time registration of his/her mobile number with Axis Bank.

Once the registration is done, the IMT funds can be withdrawn via ATM on the cardless mode.
Yes, Cash from ATM can be withdrawn without the ATM card.

So, IMT is a double innovation i.e 01) Cash to the Unbanked 02) Withdraw Cash from ATM without an ATM Card.

Charges: Like allgood things in life, IMT is not free. There is a per transaction fee of Rs25/-(all inclusive)

There are financial limits for IMT transactions. As IMT is an emergency channel and keeping in view the AML norms, the limits have been set.
The following limits exist for IMT transactions:

Sender limits
Rs. 5,000 per transaction
Rs. 25,000 per month

Receiver limits (checked on his or her mobile number)
Rs. 5,000 per transaction
Rs. 1,00,000 in a calendar year

So, go and try Axis Bank’s (India) Instant Money Transfer

UCO Bank - India - Pre-funded Cheques

UCO Bank - India - Pre-funded Cheques

It was a pleasant surprise, to know more about a new innovative bank product.
This product was launched by UCO Bank way back in 2008.

The Pre-funded cheques seems to be unique to UCO Bank, and so far, not copied by other Indian Banks.

The salient features of the Product are :

The Pre-funded cheques have an upper limit inscribed on them. The same can be used as Gift Cheques, Travlellers Cheques or Normal Cheques.

2. Eligibility:
This is available  customers maintaining individual
SB/CA account with the Bank, i.e no Joint accounts, or other business accounts holders cannot avail this facility.

3. Service Charges
Service charges shall be levied upfront @ Rs.100/ per cheque book of 10 leaves of Rs.10000/- denomination and @Rs.50/- per cheque book of 10 leaves for Rs.5000/- and Rs.1000/- denominations. Actual Courier Charges shall also be recovered additionally.

4. Cheque Feature
The cheques are customised i.e printed as order cheques and attractively designed.
The cheques will be pre-funded i.e the account will already have funds in it.

The cheque books will be issued for a prepaid value of not exceeding Rs.10,000/- Rs.50,000/- / Rs.100000/- (i.e. cheque book containing 10 leaves - each leaf not exceeding Rs.1000/- ,Rs.5,000/- and Rs.10000/- )

Each cheque leaf shall bear a legend "Not over Rs.1000/- or Rs.5000/ or Rs.10,000/- "as the case may be.
A cheque book shall contain 10 leaves.

UCO Bank was founded in 1943, and has branches spread all over India.

Amongst the founding fathers of UCO Bank was  Ghanshyam Das Birla, the founder of Birle Group in India. During the Quit India movement of 1942, he had conceived the idea of organizing a commercial bank with Indian capital and management, and the United Commercial Bank Limited was incorporated to give shape to that idea.

The bank, along with 13 major commercial banks of India, was nationalized on 19 July 1969 by the Government of India.

Its name was changed to UCO Bank, in 1985, by an act of Indian Parliament.