1. ………. The INDIA Story

2. 1.3 Billion population, 2nd most
populous nation in the world
11th largest economy in the world.
Average growth rate of 8.5% in the
preceding 8 years.
Only 100 k ATMs predominantly
located in urban areas
Solution :
Reach the unbanked 55 % of India is unbanked
population using mobile but India has 900 million mobile
phones through the
Unorganized Merchants subscribers.
&
Retail touch points.
10 million + unorganized merchants

3. TOTAL MARKET FOR PAYMENTS :$700 billion
Fraud &
Black Money
Transactions In India By Circulation
Value (2011-12) Huge Cost Inefficiencies
(handling 49
6% (Printing & billion
mutilation of currency
currency ) notes)
Cash
Payments
Card
Payments
94% PROBLEMS
Source-AT
Kearney

4. MOBILE PAYMENT : Process & Definitions
Communication Channels
SMS/USSD/WAP/Mobile Applications
KYC UID
Service Payment Payment Payment Payment
Registration Request Authorization Confirmation Report
IMPS
Mobile Payments are defined as transactions executed over a mobile phone. The steps for
enabling & executing a mobile payment are:
Enrolment and Activation of the payment instrument with the financial institution or payment provider .
Payment Request which includes transaction value and timing as parameters & initiated by customer or
merchant.
Authorization & Authentication by consumer the payment before it is processed.
Confirmation of the payment outcome is provided to the consumer.
Review by the consumer the payment that took place, at some point in the future.
Source: Mobile Payments Whitepaper Microsoft

5.  India launched mobile telephony
services in 1995.
 Mobile Payments - RECENT
PHENOMENON - Led by Banks,
Wallet solution providers & Telcos.
 Primary Use Case of mobile
payments - Urban subscribers - Utility
bill payments ticketing, Mobile &
DTH recharges. Rural-banking
services
 As the Rural mobile penetration
improves -Mobile phone becomes a
tool to bring the UNBANKED 600
million population under Financial
Inclusion.

6. REGULATION
•Setting up of NPCI
• UID cards
•Easing of RBI
norms & guidelines
COMPETITION
•Many banks along CUSTOMERS
with telcos / wallet •Urban-Convenience
solution providers •Rural-Accessibility
have jumped into this
market.
INNOVATION
•Smart Cards
•Mobile wallets
•NFC
6

7. MOBILE PAYMENTS :Current Trend
STAKEHOLER USE CASE POTENTIAL IN INDIA CURRENT USAGE(%)
Biller Utility Payment Medium 3
People (P2P) Domestic & International Very High 2
Remittances
Service Providers Mobile/DTH recharges , Very High 90
ticketing
Retailers Merchant Low 5
Payments/Shopping
Mobile Transactions Value Mobile Transactions Volume
(in INR million) 4.00 (in million)
4000
3380
3500 3.50 3.71
3000 3.00 3.44
3067 3.18 3.35
2865 3.12
2500 2.50 2.80
2346 2.84
2000
1960
2325 2.00
1500 1909
1.50
1000
Avg growth rate of 30% over Jan-July
1.00
500
Avg growth rate of 77% over Jan-July 0.50
0
0.00
Jan Feb March April May June July Jan Feb March April May June July
Source:RBI 2012 Source:RBI 2012

8. MOBILE PAYMENTS : Urban & Rural
URBAN RURAL
 Mobile payments are enabled on  Banking in Rural India is yet to take off.
many banks such as SBI, ICICI Union  BC model has managed to only reach 75 K
Bank, HDFC Axis Bank Corporation villages.
 Very little progress on well over 565 K
Bank.
villages each having less than 2000
 Total coverage is estimated at 400 population.
million bank customer base.  MOBILE WALLET will emerge as the single
 Assuming a 15% usage the most convenient and viable model for rural
potential base is over 56 million India.
and growing.  But Rural Infrastructure needs to be put in
 Transactions are mainly limited to place to create a ‘Mobile Wallet
recharges, utility payments etc. Ecosystem’ for Channelizing Savings &
Remittances.
Customer Base(in Million)
200 160
150
100 75
50 13 15 23 25
0
Axis Bank Corporation HDFC Bank ICICI Bank SBI Bank UBI Bank
Bank
Source: Bank Websites

9.  Real Potential : Mobile Wallets Is
600 MILLION UNBANKED CUSTOMER BASE
For Rural Space.
 The Need Of The Hour : Inclusive
Payment Infrastructure.
 Existing Payments Infrastructure
At Retail: Credit Cards Payments-
Serves Only 3% Of The Merchant
Universe.
 Migrants from rural India forms a
significant part of Urban India &
included in the rural count.
 In 2011-2012,Transactions:
Prepaid Instruments - $1.1 Billion
Mobile Banking - $331 Million

11. RURAL ECONOMY : India’s Future Growth Engine
720 million
customers
70 % of Indian
households RURAL
resides in CONTRIBUTION
villages. 35 % of mobile
subscribers
70 % of DTH
subscribers
RURAL
INTEGRATE Consumption
the Share
RURAL (56%)
HIGHER THAN
ECONOMY Consumption
Share
(44%)
SUSTENANCE
To sustain GDP
growth of 8-9%
the rural
RURAL
economy needs
INCOME
Addressing
42 % of
total
National
Income

12. Receiving milk payments
or purchasing cattle.
Buying seeds/fertilizers &
selling crops.
Buying & selling farm
equipment. INDIAN
GDP
12

13. Potential: PoS : Deploy a low cost GPRS Point of Sale
 HUGE UNTAPPED MARKET : G2C terminals at the village grocer which will
payments worth $ 40 billion & have connectivity to banks through NPCI
International Remittances worth $ 28 and authentication through UID .
billion is untapped in 550k unbanked
villages having population less then 2000
Pos Cum ATM: This PoS terminal then
population.
becomes a Rural Human ATM at a perhaps
Challenge
 PRESENT MODELS UNVIABLE:
fractional cost of a regular ATM with ZERO
Traditional banking infrastructure ,BC RECURRING & MAINTENANCE COST &
model, Smart Card based Rural payment Eliminating the need for cash handling
is not feasible in these locations. altogether by the banks.
LOW COST MODEL : The ATM cost can be
shared between several banks as it will save
them the cost of deploying expensive
terminals.
Current interchange rate makes it unviable.

14. INDIA: Rural vs Urban ATM Density
ATMs per million population PoS per million population
India 75 India 419
Urban 98
China China 218
1707
Brazil 643 Brazil 13515
ATMs per million
UK 1055 UK 17020
population
USA 1345 USA 19083
Rural 16
Japan 1426 Japan 24611
0 500 1000 1500 0 10000 20000 30000
0 50 100 150 200 250

15.  Rural payment infrastructure
required in 550k villages.
 High costs and servicing is a
challenge to expand ATM
network in rural.
 Most feasible option is a low
cost GPRS PoS which
becomes a Rural ATM.
 Will have connectivity to Introductory Phase
(1995-2002)
banks through NPCI and UID.
 Cost of PoS network will be a
fraction of the normal ATM
network.
Funding to village retailers is an issue but
possible to address.

16. Merchant Payment
- Rupay Card
Magnetic Swipe/Smart Card enabled
(Supporting Cash In through
Rupay/MasterCard/Visa/Amex) Aadhaar
Cash Out through
Aadhaar
Utility Services
(Recharges/Bill Pay)
Connected to IMPS & Utility Service
Merchant Payment
providers
- IMPS
Cash In through
IMPS
Cash Out through
NFC Enabled for Tap & Go payments IMPS
Merchant Payment
- MasterCard/VISA

17. INITIATIVE FEATURES STAKEHOLDERS
A New And Feature Rich Banks
•It will provide for scalability in volumes, flexibility in operations,
RTGS System Corporate Houses
better liquidity saving features.
Enterprise
National Payment
•Efficient mobile payments would require real time transfer of
Corporation of India ,
funds with adequate security.
Banks,
A New Mobile Payments
Private Wallets,
Settlement Network •This would require building a national infrastructure for mobile
Service Providers,
payments.
Consumers,
Merchants.
A Centralized Automated Banks,
•A technology and feature-rich ACH network for bulk
Clearing House (ACH) NPCI, Merchants
transactions.
Consumers
•Very low Interchange rate at 0.75% on Rupay Cards as
compared to 2.5 % charged by Visa/MasterCard Credit Cards. Merchants,
Rupay Card
Consumers,
• This will spur the growth of debit card payments at retail Banks
points.
•Defining of PPIs to 3 broad categories . Private Wallets,
New Policy on PPIs Service Providers,
•Domestic Money Transfer permissible on all 3 categories. Consumers, Merchants

18.  SARAL MONEY prepaid card for
unbanked population linked to UID
number.
 NO FRILLS BANK
ACCOUNTS($1000)
 MOBILE WALLETS :
1.Utility Wallet- $200
2.Wallet With ID Documentation
(KYC) -$1000

19.  Lack of Customer  Interoperability -
Education & Financial Between All Stakeholders-
Literacy. Banks, Telcos, Aggregators
& Service Distributors .
 High Cost Of Devices & Poor  Uniform Messaging –
Connectivity. Standards Over SMS/USSD.
 Security-
 Regulatory Issues It is A Major Perceived
Concern And There Is A
Need To Address This With
 Rural (Terrain ) Access Defining International
Uniform Standard
Protocols.

20. International
Remittances
Government worth $ 58
Subsidies Billion &
/Benefits worth $ Domestic
60 billion. Remittances
Mobile /DTH
recharges ,Bill (Government to worth $ 20
payments Consumer ) Billion.
worth $100
billion.

21. “ We’re the only company that owns the
whole widget – the hardware, the software
and the operating system.
We can take full responsibility for the user
experience.
We can do things the other guys can’t do”.
– Steve Jobs
This document is the property of Oxigen Services India Private Limited & is Confidential 21