India’s Payment Corridor Towards cashless future

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IPCThe trend of paperless transactions through the Internet, cards and mobile devices is increasing among people as the ease of doing anytime payment is attracting more and more people to avoid cash transactions. But even as cashless transactions are increasing, a large part of Indian population still prefers cash payments.

With the aim to promote the cashless future, Governance Today had organized ‘India’s Payment Corridors – Towards Cashless Future’ which brought together experts from top banking and financial organization and institutions. The summit acted as a platform for discussing various financial and technical innovations that are taking the financial world by storm, and provided a stage where policy related matters, necessitated by the emergent realities. The event witnessed participation from banking as well as IT fraternity. Inaugural session was attended by Shri Vinit Goenka, Member IT Task Force, Ministries of Shipping and Road Transport and Highways who emphasized on encouraging cashless transactions as it is directly proportional to growth of the economy.

IPC-glimpsesThe participants from the banking industry included Union Bank of India, Kotak Mahindra Bank, Coastal Local Area Bank, NABARD, HDFC, Bank of India, Yes Bank, Bank of Maharashtra, DCB and many more.

When it comes to the inclusion of IT, Poorna Bolla, Head-IT of Coastal Local Area Bank stated, “We believe that IT infrastructure should be sound for any bank to stay afloat in cut throat competition.”

Prasana Lohar, Head Digital Banking of DCB stated that the bank is continuously coming up with services that pave way for cashless transactions. He added, “Our presence in the sector has been for around 84 years now and some of our customers are associated with us from very early days who still visit banks for services that can be easily access via internet. So we are trying to convert more and more branch transactions to the channels by educating our customers about the benefits of doing transactions at the comfort of their home.”

HK Behera, General Manager – Govt. Business & CRLSD, Union Bank of India, mentioned that the bank is coming up with new ways to reach out to its remote customers, especially who are not aware about the advantages of cashless transactions. He added, “We believe that there are large numbers of customers for a bank and we intend to reduce the transaction cost. In order to achieve this we intend to make a robust alternative delivery channel which will help us to handle large number of customers and in turn lower the cost.”

On IT’s inclusion in banking sector, Rajnish Khare, Head – Digital Transformation & Mobile Banking, HDFC, said, “Technology is one element that can reduce the operation cost. That is why in next decade we would witness increasing number of people talking about services on digital platform.”

S Rajgopalan, DGM-IT, Bank of Maharashtra, also think that technology is the only way to promote cashless economy but educating the customers is also important. He added, “We have still got customers who would not like to use ATM and instead come to branch for cash out of fear of fraud. But we are educating our customers by assuring them that it is safe to use ATMs and internet banking. We need collective effort from the customers as well as from the bank.”

Inextricably linked to the issue of online transaction is the prominence of cyber security. As technology becomes complicated and more pervasive, illicit and illegal activities are also on rise with rogue elements breaking into financial systems to siphon out large sums of money. Bankers and IT companies thus discussed upon trusting data with cloud technology.

As it came out with discussion, many bankers do not trust their data with cloud while some others trust cloud security.

Ruchin Kumar, Security Evangelist – India & SAARC, Gemalto, who provide their services to RBI, explains that at present many banks are not aware about the security features of cloud computing and thus are doubtful for trusting cloud for core-applications.

The summit provided an ideal platform for banking and financial institutions and IT sector to deliberate upon the opportunities as well as challenges that remain ahead for this sector.

Highlights from the Summit

Inaugural Session

The inaugural session included Shri Vinit Goenka, Member IT Task Force, Ministries of Shipping, Road Transport; Pankaj Jaiswal, MD, Dotcom Services Private Limited; and Champakaraj Gurjar, MD, Maxtone Electronics Pvt. Ltd. Networking.

The discussion centered upon the present scenario of cashless trend in the Indian economy. Pankaj Jaiswal stated the important aspects of cashless economy and how it can drive the economy to inclusive growth. During the same session, Champakaraj Gurjar focused on how cashless can reduce the cost of printing currencies and direct those resources to better use.

Shri Vinit Goenka compared India with other economies in the world and mentioned Belgium as the example where cashless transactions stand at 93 percent. He added there is a major problem of unaccounted money in India which can be tackled by bringing in more services that can promote cashless transactions.

Banking Policy for Cashless Transactions in India: Mantra for Spreading Cashless Economy?

The session discussed how the economy can seamlessly go forward with the cashless dream. HK Behera, General Manager – Govt. Business & CRLSD, Union Bank of India, mentioned that banking sector moves along with the policies set by Reserve Bank of India and thus we are working in collaboration to facilitate the same. The positive thing is that Indian government is with us and we will certainly move forward with this dream.

Tushar Trivedi, Sr. EVP – Business Solutions Group, Kotak Mahindra Bank, emphasized on the importance of educating every customer to increase the cashless penetration in remote locations which would ultimately lead to realizing the aim of PMJDY.

With internet penetration being 30 percent in India and 45 percent in China, there seems to be huge difference in cashless transactions and that is why policy makers are pushing for the approaches that would drive the digital payments.

5A’s of Cashless Dream: Availability, Accessibility, Affordability, Acceptability & Awareness

The session was focused on the challenges faced while planning to move forward with providing cashless services and how to tackle them.

Subrata Gupta, CGM-FI, NABARD, mentioned how for majority of people using cash is more convenient than digital transactions as cards are not acceptable while travelling by auto or purchasing vegetable from vendors and for other such purchases where cash is used as the medium for payments.

Butchi Burra Babu, DGM-IT, Bank of India, emphasized on the affordability of transferring payments virtually which is much lower than done otherwise. This is an important factor for those customers who want faster and 24X7 banking services.

KP Saha, MD, Senrysa, shares his experience of working in urban as well as rural areas of the country. He explains how there is no single solution which can work well in both the scenario. It is easier to implement cashless trend in urban as most of the people are aware about it. However, it is not the same in remote locations and therefore the first thing we need to do is educate our youth.

Next-Gen Payments solutions & security: Transactions to Translations

The speakers in the session included Rajendra Mhalsekar, President, Corporate Banking Technology, Yes Bank; Poorna Bolla, Head IT, Coastal Local Area Bank; Ruchin Kumar, Security Evangelist – India & SAARC, Gemalto; and Yadvendra Tyagi, Director-Business Development, Citrus Payments.

The session was focused upon technology giving rise to Next-Gen payment services. The speakers emphasized on how it has become important to introduce robust security features to attract people to undertake online transactions. It is necessary to educate and inform customers about security features as they need to be completely assured while doing e-transactions.

Promoting Digital Money – Cash to No Cash

The session was centered upon promoting cashless transactions and focusing on IT development in the banking sector. The speakers for the concluding session were S. Rajgopalan, DGM-IT, Bank of Maharashtra; Avinash Godkhindi, CEO & Director, Zaggle; Prasana Lohar, Head Digital Banking, DCB; and Ruchin Kumar, Security Evangelist – India & SAARC, Gemalto.

The discussion emphasized on the four pillars of cashless namely, government, technology & infrastructure, banking sector and customers. Every pillar has their own set of responsibilities for making virtual transactions easier, economical and most importantly secure.