ICICI Bank announce the release of their Tap N Pay payment technology

A recent announcement in the prepaid payment technology world was that ICICI Bank, India’s largest private sector bank, have collaborated with Tech Mahindra Limited, to launch a contactless payment service that is based on the Near Field Communications (NFC) technology. This innovative new payment service which has been named ‘Tap n Pay’ will allow anyone, including non-ICICI Bank account holders to make over the counter purchases, reducing dependency on cash.

The customer will be able to use their NFC enabled mobile phone at the merchant’s point of sale device to make payments. The new innovation is a pre-paid account that allows customers from any bank to register for it and can transfer money online from any account. Customers are also able to top up their ‘Tap n Pay’ accounts by sending an SMS.

Tech Mahindra managing director and chief executive CP Gurnani stated that “The synergies between the two partners (ICICI Bank and Tech Mahindra) will bring about a new payments ecosystem, parallel to, and yet in harmony with, the existing payment networks in the country,".

The service is currently a closed end service and not a universal payment method. The announcement stated that at the moment the new technology is only for large campuses at corporate offices. For example being used at canteens or to buy meal coupons. To me this is advantageous using it less as a universal card but for certain purposes at the start and then maybe expanding. An issue that can come around with universal tap like payment systems can be unwittingly paying for things you didn’t want to.

This was a problem in London, England. The London Underground has a barrier system were the majority of users swipe their Oyster card which has a set amount on, to get through. However, people often kept the Oyster card in their wallet to swipe and their wallet often already had a tap payment card; this meant that money would sometimes be debited off that card whilst trying to swipe through the barriers. This became a serious problem and announcements were having to be made on the Tannoy public speaker systems to warn customers.

This announcement shows the ongoing advances being made in the prepaid payments industry that seeks to increase payment efficiency and to many, signals the lack of need for physical cash. The increase in these types of innovation, many also believe could mean a lack of dependency in banks. Banks will have to come up with innovations of their own to help keep up with the changing times.

About the Author: Harry Kempe, a marketing intern at IIR USA, who works on various aspects of the industry including social media, marketing analysis and media. He is a recent graduate of Newcastle University who previously worked for EMAP Ltd. and WGSN as a marketing assistant on events such as the World Architecture Festival, World Retail Congress and Global Fashion Awards. He can be reached at hkempe@IIRUSA.com

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“Progress in Prepaid” Tours India, Country of Contradictions

It’s the world’s second-largest population and 90% don’t have a debit or credit card, so why should U.S. prepaid services proceed with caution?
By Marc Dresner, IIR USA

Tour these great United States and you’re bound to find a few cultural differences at each state line. Take New York and Texas. Heck, they’re practically different countries. And California might as well be another planet.

But for one in search of genuine diversity, my destination of choice would be India.

U.S. prepaid interests appear to share my wanderlust, except not only would they like to visit; many are keen to take up residence.

The attraction is obvious: As the country with the second-largest population in the world, India is not only a rising financial superpower with a growing middle class, but it’s also the world’s largest cash economy.

In fact, according to Naveen Surya, Managing Director of ItzCash Card Ltd. – a multi-purpose prepaid card company based in Mumbai – less than 10% of India’s 1.2 billion residents have a credit or debit card! Cash only, folks. Seems like a prepaid dream!

But before you pack your bags and rush out the door, you’ll need to contend with that diversity aspect I mentioned earlier.

You see, India is also the world’s seventh-largest country, and to illustrate the extent of differences you’ll find from region to region, and state to state, this big boy boasts roughly 29 different languages, with multiple dialects particular to each language.

No single prepaid product solution can possibly accommodate India’s myriad socio-cultural particularities. There’s a massive learning curve, even for native Indians like Surya, who only speaks a “paltry” two of the country’s tongues.

In an interview for our third episode of IIR’s podcast series, “Progress in Prepaid,” Surya takes us on a tour of India from a prepaid perspective.

We’ll explore issuance and infrastructure issues, the regulatory landscape, and opportunities for closed-, semi-closed and open-loop prepaid products in a country of contradictions, where cash is king but mobile penetration is high enough that mobile prepaid could take hold within just three to four years!

To listen to our podcast click here, or to download the transcript, please click here.

Editor’s note:
Want to learn more about prepaid in India? Naveen Surya will be moderating a panel titled “India: Next Growth Destination for the Prepaid Industry," at IIR’s Prepaid Expo USA on March 9 in Orlando as part of a session track devoted to international prepaid markets.

There’s still time to register for the industry’s largest gathering for network-branded prepaid and stored-value decision makers and influencers March 6-9. Visit www.iirusa.com/prepaid for details.

About the Author/Interviewer

Marc Dresner is an IIR USA communication lead with a background in trade journalism and marketing. He is the former executive editor of Research Business Report, a confidential newsletter for the marketing research and consumer insights industry. He may be reached at mdresner@iirusa.com

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India changes rules on prepaid mobile phone cards

According to The PayPers, India has altered the way prepaid mobile phone cards can be used. They will not allow the cards to pay for anything other than mobile content. This is in an effort to stop the rise of unaccounted or black money. Only banks and finance companies will be allowed to issue prepaid cards that are accepted outside a closed group.

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Reserve Bank of India: Rs50,000 Max on Prepaid Cards

Wealthy individuals in India looking to have the convenience of a prepaid card could face problems if they try to load more than Rs50,000 onto their prepaid cards. According to TaxGuru.com, The central bank has also laid down certain exceptions in KYC requirements available only in cases wherein semi-closed system payment instruments up to Rs 1,000 may be issued subject to reporting of annual turnover or suspicious transactions. The issuer should ensure that, under no circumstance, more than one card is issued to the same person. It seems that this restriction on prepaid cards limits stems from India's fight against terrorism. Because loading cash to a prepaid card can be relatively anonymous, India may be looking to protect the country's citizens with these measures. What do you think?

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