Sunday, March 1, 2015

Incentivise credit or debit card transactions in India – Simple not complicated process required

Taking a leaf from other countries strategies to boost CashLess transactions, Shri Jaitley said the following while presenting the Indian Union Budget 2015.

One way to curb the flow of black money is to discourage transactions in cash. Now that a majority of Indians has or can have, a RuPay debit card, I, therefore, propose to introduce soon several measures that will incentivise credit or debit card transactions, and disincentivise cash transactions.”

Briefly the following are a few examples on nation's journey in the CashLess path.

Thailand: During the last quarter of 2012, the apex bank of Thailand observerd that the number of transactions through debit cards was on the increase. On a detialed analysis, it was observed that the majority of the transactions were for cash withdrawal and not for goods and service purchases.

To shift the transactions from cash mode to goods/services purchases , Bank of Thailand embarked on a major publicity drive. This strategy has paid off and slowly but steadily the share of good/services purchases via Debit/Prepaid Cards is on the increase.

Korea: Korea adopted a different strategy to boost goods/services purchases through eTransaction modes especially credit/debit/prepaid cards. The strategy has been so successful that it is referred to most nations who want to reap the benefits of CashLess transactions.

To reduce the chances of credit card traps i.e over purchasing/impulsive buys, Korean government reduced tax deductions on credit card transactions and increased tax deductions for debit and prepaid cards.

CashLess in Korea account for 70% of the value of all consumer payments. Korea's journey to the CashLess society begun 20 years ago.

United States of America: In USA, the Internal Revenue Service (IRS) has specific tax rules to encourage payment of taxes electronically, especially credit cards.

These rules are applicable to both individuals and businesses. For example, one can deduct credit and debit card fees incurred if you paid your individual federal income taxes electronically. Another deduction is available if a credit card company imposes fees on a business for the service of processing charged sales. If there is business credit card, there are qualifications for deductions based on annual fees and late fees charged by your provider.

The deductions were necessary as the credit/debit card issuance institutions or aggregators charge for the services provided. The Internal Revenue Service, or IRS, offers electronic payment systems for tax purposes, but other federal laws prohibit the IRS from directly paying any of the fees associated with debit or credit transactions. The IRS created a deduction in 2009 to offset the fee assessed by your credit card company when you make electronic tax payments. T

Sunday, February 22, 2015

Delhi Metro – Major Stress Point – Shortage of coins !!!

            A visit to Delhi is incomplete without a Metro ride.  With a network spanning over 200 kms and growing every quarter, the metro is a boon for delhities.

            The network has gone beyond the boundaries of Delhi to reach NOIDA and Ghaziabad in Uttar Pradesh and Gurgaon in Haryana.

            The average number of passengers ferried by Delhi Metro is 28,00,000 per day. On holidays and festival days, the average number goes up by another 1-2lacs.

            The lifeline of the Delhi Metro finances is its tickets collections. Apart from tickets the other sources of income are permits for film shooting in its stations/trains, advertisements and vendor outlets.

            The fare rates range from INR8 to INR42.  This means either the commuter or the ticket issuance staff should compulsory have currency coins to complete the ticket transaction.

The main challenge is collect the ticket fares with minimum fuss at the ticket issuance counters.

Ticket purchase Choices for Delhi Metro commuters: -

01) RFID Tokens:- Valid for single journey on the day of purchase.  The RFID Token has to be purchased by the commuter before beginning the journey at the Metro ticket counter. Basing on the destination station, the ticket fare is loaded into the RFID token. Entry to the travel area at the originating station is by display of the RFID token at the electronic turnstile. Exit at the destination station is by dropping the RFID token at the designated slot at the electronic turnstile.

02)Tourist Cards:  Two types of tourist cards are available. One Day tourist card costing INR 150. Three day tourist card costing INR300. These cards are suitable for unlimited travel for 1day or 3 days depending on the amount loaded into the tourist card.

03)Travel Cards: Valid for one year from the purchase date and is the preferred mode for frequent commuters.  Minimum recharge of INR 100 is mandatory with a maximum recharge of INR1000/-. As the ticket fare is pre-funded, 10% discount is offered on all the trips made on this travel card.

At present, 70% of the commuters prefer travel cards either the tourist card or the normal travel card.

      One drawback in the tourist cards is the INR50 refundable deposit. This discourages tourists from opting for tourist cards.

      The 70% figure has been achieved by consistent encouragement by Delhi Metro Staff to the commuters and it has been stagnant for quite some time now.

      The chief stress point for the Metro ticketing staff is the coins shortage at their counters.

On an average every day, Metro faces a shortfall of around "3 lakh coins".  There are situations where passengers often forgo the change amount, leading to many of them lashing out at the staff.

      After multiple brain storming sessions,  Delhi Metro on Sunday (22/02/2015)  set up an "exact change counters" across 20 busiest stations on its network to curtail queuing or waiting time for passengers.

As the name connotes, at these ‘exact change counters’, only those passengers who tender exact change can buy tokens.

"This will avoid any queuing or waiting time for passengers as they won't have to wait for return change after buying the tokens," a DMRC official said.

The stations where these counters have been made operational are - New Delhi, Chandni Chowk, Rajiv Chowk, Anand Vihar, Shahdara, HUDA City Centre, Jahangirpuri, Uttam Nagar East, Saket, Dilshad Garden, Kashmere Gate, Badarpur, AIIMS, Vaishali, Karol Bagh, Seelampur, M G Road, Noida City Centre, R K Ashram and Dwarka Mor.

At the same time to encourage the remaining 30% commuters to switch to CashLess mode, DMRC has also installed 'Point of Sale' (POS) machines at its 73 stations including all stations of the Airport Express Line to facilitate cashless transaction for passengers who wish to recharge their smart cards by using credit or debit cards.

"These machines are available at 'Customer Care Centre' of those stations and passengers can get their smart cards recharged by using their credit/debit cards thus eliminating the need for carrying cash to the counter all the time.

Saturday, February 7, 2015

HDFC Bank offers Chillr – The new APP for Instant LessCash Transactions

IMPS ecosystem enables HDFC Bank to offer “Chillr APP” for Instant LessCash Transfers.

            NPCIs IMPS (Immediate Payment Service) has spawned a new breed of entrepreneurs. These new breeds of entrepreneurs are focusing on the USP of IMPS to promote Safe CashLess transactions.

            The latest launch is the “Chillr” Mobile App by HDFC Bank.

            “Chillr”, has been developed by a Kerala startup company with the same name i.e “Chillr”. This startup company is a subsidiary of MobWE Wirless.  

            The ‘Chillr” is currently available for HDFC Bank customers only.  It is being promoted as a LessCash transaction tool amongst friends. In the coming months, merchants too will be onboarded on the “Chillr” platform.

            As it is merchants holding accounts in HDFC Bank can straight away receive funds through the “Chillr” APP. Just the sender has to add the merchants’ phone number in his/her smart phone. The funds transfer can commence straight away. However such a mode is not viable for a large number of transactions in the merchants’ bank accounts due to accounting norms. Merchants require each credit entry to be tagged to a receipt, which enable easy reconciliation.

            The channel for the funds transfer is NPCIs IMPS channel. This carrier agnostic funds transfer channel eliminates the need for expensive charges too. As IMPS works 24*7, 365 days a year, there is no fear of delayed settlement. A dispute resolution mechanism too is in place.

            Read the complete FAQs here

            The only prerequisite is that the receiver too should have a bank account. The bank account need not be in HDFC Bank but in any Bank which is on IMPS network.

              "Chillr", can be a great tool in Nashik Kumbh Mela 2015 to promote LessCash transactions. The only obstacle could be issues with network connectivity. 




Sunday, February 1, 2015

PaHal Scheme pumps in Rs3654+ crores cash into Indian economy

            The PaHal scheme as on date covers 9.75 crore LPG consumers i.e  66% of the total consumer base of 15 crore.     

PaHaL (Pratyaksha Hastaantarit Laabh) is the  Direct Benefit Transfer Scheme for LPG Subsidy.

Under PaHaL, LPG cylinders are sold at market rates and entitled consumers get the subsidy directly into their bank accounts. This is done either through an Aadhaar linkage or a bank account linkage.

An amount of Rs. 3654 crore has already been transferred into the bank accounts of LPG consumers through 9.25 crore transactions.

Overall only 1.09 lakh complaints have been received so far, which constitute a mere 0.1% of the transactions. Over 85% of the complaints have been resolved.

The success of this scheme can be attributed to a multi pronged approach to the core audience. The core audiences in PaHal scheme were the banks, lpg consumers, lpg dealers and lpg companies.

The single portal with its simple user interface was the common tool which linked the banks, consumers and the lpg dealers.

            At the same time, this portal also is an important tool in bringing transparency.
            The various options available in the portal can be better understood with the following picture

            The next step should be to digitize the payments from consumers end. The credit to the consumer’s bank account is already in electronic mode. It would be logical to roll out mobile POS terminals to collect the gas cylinders monies from the consumers.
            The benefits are manifold:

a)    Familiarize a large chunk of the population with Safe eTransactions

b)   Boost the Mobile POS market

c)    Reduce the cash handling cost

d)   Play an active role in keeping the PMJDY Rupay cards active

e)    Migrate a large number of transactions from Cash mode to CashLess mode

Sunday, January 18, 2015

India’s first Smart City-Infosys Mysore Campus

            It takes time to develop a Smart City from scratch. PM Modi has announced the development of 100 Smart Cities in India.

            Greenfield projects are few. The focus is to upgrade existing cities to Smart Cities.

Types of Smart Cities in India can be divided into the major categories:
a)    Greenfield Projects: The size of such projects will vary from 100 acres to 2000+ acres. Strictly speaking these do not fall under the term City. At best these can fall under Smart Enclaves, as all the Greenfield projects are planned within an enclosed area.
b)   Up gradation of existing towns: 

MOUD has recently released a concept paper of the approach for India’s Smart Cities.
      Across India, there are a number of players planning their contribution to the Smart Cities.
      Infosys has taken the first step towards this. Infosys has decided to upgrade their Mysore Campus into the Smart City mode by April 2015.
      Read the full news press release here. The campus will be a demonstrable model as to how a Smart City in India will look like.

      5  main advantages of this demo city:

a)    Immediate scalable.

b)   Minimal investment.

c)    Perfect model for other stakeholders.

d)   Excellent branding tool.

e) The complete suite of a Smart City i.e Energy conversation, Electronic Transactions, Waste Management, Security  etc can be showcased in one model.


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