1. Payments & Transaction Processing Systems Global and Indian Overview

2. AGENDA Introduction Global regulatory framework Regulatory framework in India How banks transact? How customers transact? Specialized companies operating in each area Market share Critical success factors Risks

3. AGENDA Introduction Global regulatory framework Regulatory framework in India How banks transact? How customers transact? Specialized companies operating in each area Market share Critical success factors Risks

4. INTRODUCTION Payment Systems: A configuration of institutions supported by a technology infrastructure and driven by processes to facilitate financial transfers between payer and beneficiary Bank B Bank A Messaging and Routing Platform Securities Clearing & Settlement Large Value Clearing & Settlement Retail Clearing & Settlement

5. AGENDA Introduction Global regulatory framework Regulatory framework in India How banks transact? How customers transact? Specialized companies operating in each area Market share Critical success factors Risks

6. BIS-CPSS – Standards set by PSDG via World Bank Source: World Bank

8. Large value payments in a year - more than 50 times global GDP

9. Growth in total amounts settled by RTGS - 86% between 2002 and 2006 and 82% of the value of total payments

10. Safe PRSS Mitigate Risks in Financial Markets

11. Financial market crises reflect first in payment systems

12. Interbank money market relies heavily on ability to transmit funds

13. Efficient PRSS Lead Countries to Huge Savings

14. Progressive shift from paper-based to electronic payments can produce a potential saving to the country of 0.7% of the GDP per year

15. PRSS are Key in Developing More Inclusive Financial Systems

16. Enhances access to financial services

17. Retail payments services first entry point of underserved into financial sectorSource: World Bank

18. AGENDA Introduction Global regulatory framework Regulatory framework in India How banks transact? How customers transact? Specialized companies operating in each area Market share Critical success factors Risks

20. Board for Regulation and Supervision of Payments and Settlement Systems Regulations, 2008

22. Size and shape of instructions

23. Timings to be maintained by payment systems

24. Manner of funds transfer

25. Criteria for membership Source: Reserve Bank of India

26. AGENDA Introduction Global regulatory framework Regulatory framework in India How banks transact? How customers transact? Specialized companies operating in each area Market share Critical success factors Risks

30. Processing and final settlement can take place continuously

31. Real time settlement transactions are final once they take place

32. Ability to limit system risks. Reduces the duration of credit and liquidity exposures

34. Batch programs run at definite points on a business day

35. Transactions are bunched and sent over to the other banks

36. Typically low value and high volume transactions

38. The majority of international interbank messages use the SWIFT network. As of September 2010, SWIFT linked more than 9,000 financial institutions in 209 countries and territories, who were exchanging an average of over 15 million messages per day

39. SWIFT established common standards for financial transactions and a shared data processing system and worldwide communications networkSource: SWIFT

40. AGENDA Introduction Global regulatory framework Regulatory framework in India How banks transact? How customers transact? Specialized companies operating in each area Market share Critical success factors Risks

43. The Buyer has A/C with Bank A & Seller with Bank B

44. In the above scenario be a payment gateway will be hosted by an intermediary

46. Future Payment Options – UID + Mobile Banking

49. All these countries have one thing in common, the largest operator (>60 per cent market share) has in some form tied up with a large national bank to offer mobile banking services. This kind of a relationship provides sufficient leverage in creation, distribution and maintenance of services.

50. Goods purchase through mobile phone. The payments are either debited from their pre paid cards or charged to the customer in their post paid bills.

51. Usage of talk time as currency

52. Focus on Banking

53. Focus on TransactionsServices offered Source: Obopay

54. AGENDA Introduction Global regulatory framework Regulatory framework in India How banks transact? How customers transact? Specialized companies operating in each area Market share Critical success factors Risks

55. Companies in the Industry Source: Wikipedia

56. Companies in the Industry Source: Wikipedia

57. AGENDA Introduction Global regulatory framework Regulatory framework in India How banks transact? How customers transact? Specialized companies operating in each area Market share Critical success factors Risks

58. Market Share of Customer Payment Modes Source: Reserve Bank of India

59. Market Share of Each Payment Mode – Macro Economic Level - India Source: Reserve Bank of India

60. AGENDA Introduction Global regulatory framework Regulatory framework in India How banks transact? How customers transact? Specialized companies operating in each area Market share Critical success factors Risks

61. Critical Success Factors of Payment Systems

62. AGENDA Introduction Global regulatory framework Regulatory framework in India How banks transact? How customers transact? Specialized companies operating in each area Market share Critical success factors Risks

63. Risks in Payment Systems

64. Akshay Kaul Nitesh Chadha Pradeep Ravichandran