Launched in August 2021 by Prime Minister Narendra Modi, e-RUPI is a new digital payment solution for seamless transfer of funds, without the need for any card, digital payments app, internet access or even a bank account. 

e-RUPI is a cashless and contactless payment method done through an e-voucher sent to beneficiaries via QR Codes or SMS strings, which can be redeemed/used for specific purpose only, at the service providers. It connects the sponsors of the services with the users and service providers digitally, with no physical interface required.

These vouchers will be both person and purpose/end-use specific, for ex: If they are issued by government for availing any medical service at a particular hospital, then they can be redeemed only for that. In other words, it will work as a closed system PPI.

How e-RUPI works?

e-RUPI is developed by NPCI on its UPI platform, with onboarded banks as the issuers. The government or any private corporate will approach the partner banks with the details of specific beneficiaries to whom the payments have to be made and the purpose of such payments.

Each beneficiary will be uniquely identified basis their mobile number and voucher will then be issued and delivered (in the form of QR Code/SMS) in the name of that beneficiary only. 

Objective of e-RUPI

e-RUPI is expected to serve the following objectives:

• The long-term vision of e-RUPI is to reach the unbanked population, include them into a formal financial system and reduce the digital gap in the country
• To provide an equal access to various healthcare, education, and other benefits to each citizen of the country
• Transparency in transactions, as the end-use of the funds can be easily tracked
• Will guarantee that the money is used for the purpose for which it was intended, unlike traditional bank account transfer where it is possible that the funds are used for other purposes

Further, with the government in the process of establishing a digital currency for the Central Bank, e-RUPI can be used to emphasize the flaws in the current digital payment infrastructure which is crucial for the development of digital currencies in future. 

Application of e-RUPI

Currently, this is a platform launched as a government initiative for leak-proof distribution of welfare benefits to eligible beneficiaries. It aims to provide services under various schemes of the government including Ayushman Bharat Pradhan Mantri Jan Arogya Yojana and other subsidy programs, etc. 

However, in future even private entities can use this voucher-based payment method for providing services to their employees for travel, healthcare, and other such purpose-specific expenses.

It can also be used to provide credit to first-time borrowers, where the end-use of funds is specific and thereby evolving the digital lending landscape in the country.

A move towards digitalization and introduction of Digital Currency

While e-RUPI is in itself not a digital currency, as it is still backed by Indian Rupee as the underlying asset and is purpose specific, it is definitely a move towards introducing digital currency/cryptocurrency in India.

Both e-RUPI and cryptocurrency work on similar principle of enabling end to end digital transactions and removing physical intermediaries thereby ensuring transparency, data security and overall reduction in operating costs. 

What lies ahead?

With the introduction of e-RUPI, it is clear that the government is in support of new digital initiatives, as they expect that India has tremendous potential to change the way they transact and pay for different services. This is supported by increasing adoption of digital payments for small-value transactions, especially by the non-digital customer segment in the country.

This backed by India’s high currency to GDP ratio, validates that such digital initiatives and crypto assets/digital currencies can co-exist and position India as the front runner towards forming a complete digital economy. Further, e-RUPI will encourage the use of PPIs in India for better channelization & monitoring of funds, providing an opportunity for Fintechs driving digital payment solutions to design new products build around e-RUPI/digital currencies and such kind of digital solutions.

Have you recently started receiving mails/SMS from various banks and service providers asking to re-register your e-mandates for automated payments such as OTT, newspaper subscriptions, etc?. This is because of the new RBI guidelines with regard to recurring transactions, coming into force from October 1, 2021. 

What are these new RBI norms?

In another step to secure digital transactions via credit/debit card, PPI or UPI, RBI has implemented the new auto debit rules. As per the new norms, all such transactions will have to be further secured with an additional factor of authentication (AFA) – 2-factor authentication. Any transaction, whether domestic or cross-border, using cards, without AFA, would be discontinued.

New rules for Automatic Payments – A Snapshot

Source: RBI

Further to this, the bank/issuer is required to take additional information such as the validity period of the e-mandate, etc at the time of registration. And if required, the facility to modify the validity period, shall also be provided.

The banks also need to send a post-debit notification to the cardholder, once the auto-debit is processed. And, finally set up a redressal mechanism to address customer grievances related to this.

What will be its impact on payments?

This move is introduced in an attempt to protect consumers with regard to safeguarding of pre-stored data relating to cards and avoiding digital frauds. And especially those consumers who hastily give their consent to unnecessary automated payments and fall prey to data breaches.

With the new guidelines coming into implementation, all such recurring payments need to be reviewed and re-registered with respective issuing banks to avoid transaction failure.

However, these will only impact standing instructions (SIs) on cards. The automated instructions under UPI Autopay, e-NACH and other SIs to banks will not be impacted.

The directive will empower card users and will give them more control over their transactions. They can now determine and set the amount, velocity, etc, thereby managing such recurring mandates efficiently.

Way forward

For end consumers

Initially, this will impact customers to some extent, as the previous payment mode was meant to provide them with a seamless experience (especially for transactions above the INR 5,000 cap in B2B usage). Also, such payments may move to other alternate modes of payment such as e-NACH, UPI, etc for a better customer experience. However, in the long run with awareness they will realize that such regulations are for their benefit as it will eventually increase the security on card transactions. 

For Businesses

These guidelines will encourage businesses particularly, small & medium sized businesses to reach out to untapped customer base and build new business models in and around subscription payments and help grow this market multi-fold in the coming years.

To sum it up, the entire payments ecosystem is going through changes due to these regulations and all stakeholders are getting impacted in one way or the other. It will require banks/card companies/fintechs in the payments space to provide such portals to comply with the new regulations. However, there is still a long way to go as not only the banks/card companies, but the merchant/merchant aggregators’ ecosystem also needs to be in a state of readiness for its successful implementation. 

India has experienced a remarkable evolution in its digital payment landscape in recent years. The swift proliferation of smartphones, internet connectivity, and government initiatives such as Digital India, Unified Payments Interface (UPI) NEFT/IMPS, Prepaid Cards/Wallets/Contactless Payments, e-RUPI, CBDC, AEPS, Open Banking/API Integration has significantly contributed to the expansion of digital payment methods throughout the nation. A strong tailwind to digital/contactless payments was provided by demonetisation and Covid-19, leading the way for a cashless economy and better tax compliance. This blog explores the latest digital payment trends reshaping India’s financial landscape.

Unified Payments Interface (UPI) Dominance

The Unified Payments Interface (UPI) has been a game-changer in the Indian payments industry. Launched in 2016 by the National Payments Corporation of India (NPCI), UPI enables users to link multiple bank accounts and execute real-time peer-to-peer transactions. UPI has witnessed exponential growth, with transaction volumes crossing the billion-mark monthly. Its success can be attributed to its simplicity, security, and interoperability across various payment apps.

IMPS/NEFT

IMPS and NEFT have revolutionised the way funds are transferred in India, providing individuals and businesses with fast, secure, and convenient payment options. Whether you need to send money urgently or make routine payments, these electronic funds transfer systems offer unparalleled accessibility and flexibility.

Prepaid Cards, wallets and Contactless Payments

Digital wallets and Prepaid cards have gained significant traction in India, allowing users to store funds digitally and make quick payments. The COVID-19 pandemic further accelerated the need for contactless transactions and contactless payments. NFC-enabled cards, QR code payments, and mobile payment solutions are increasingly prevalent, allowing consumers to make secure transactions without physical contact. Today, merchants are offering contactless payment options to provide their customers with a safer and more efficient checkout experience.

New Government Initiatives:

The Government of India has played a pivotal role in promoting digital payments through its flagship initiatives, such as Digital India, e-RUPI, CBDC and many more. Digital India aims to transform India into a digitally empowered society by promoting digital literacy and providing digital infrastructure.

o e-RUPI is a wholly cashless and no-contact electronic payment instrument that will be delivered to beneficiaries’ mobile devices (even mobile devices that are non-android or iOS) as either a QR code or an SMS-based e-voucher.

o CBDC is a digital currency issued by a central bank, rather than a commercial bank. Backed by blockchain technology, this central bank digital currency (CBDC) is an electronic version of the physical rupee, potentially representing a more secure and government-supported alternative to private digital currencies

AePS

India has witnessed rapid growth in biometric authentication for digital payments. The Aadhaar-enabled Payment System (AEPS) allows individuals to link their bank accounts with their unique Aadhaar identification number and make transactions using biometric verification. This technology has simplified payments for the underbanked population, making financial services more accessible and inclusive.

Integration of Artificial Intelligence (AI) and Machine Learning (ML)

Artificial Intelligence (AI) and Machine Learning (ML) are revolutionising the digital payments landscape in India. With AI-powered chatbots, payment service providers are enhancing customer support to address queries effectively. ML algorithms are leveraged to detect and prevent fraudulent activities, ensuring secure transactions. Moreover, personalised recommendations and targeted offers based on user behaviour are being utilised to drive customer engagement and loyalty.

Open Banking, driven by the Reserve Bank of India (RBI) guidelines, is a game-changer in the banking sector, allowing secure sharing of customer data between banks and fintech companies. Application Programming Interfaces (APIs) facilitate the seamless integration of various financial services, allowing customers to access multiple banking services through a single platform. This collaborative ecosystem encourages innovation and empowers customers with a variety of payment options.

As India moves towards a cashless economy, these trends will continue to shape the future of digital payments, driving financial inclusion and economic growth.

CARD91 is an API-led issuance Platform-as-a-Service company. It offers unparalleled technology infrastructure to banks, SMEs, corporates & fintech through its Switch and Card Management Solutions for Prepaid Cards, Multi-Currency Travel Cards and allied systems like Centralised System of Records (C-SOR) for prepaid cards, credit cards and Access Control systems (ACS)

After reading Amit’s blogpost that projects a whopping doubling of the credit card customer base within the next 4 years, I could not help but wonder which is the major segment of India’s population that could qualify as “The Aspirational Indians”. It didn’t take me a lot of effort. With the cues that the economic growth of India is throwing at us – premiumisation trend, luxury / revenge travel, rising number of entrepreneurs, etc. – I could easily conclude that it’s the Gen-Z that’s driving credit card growth.

Okay, now how do you lure this class of potential credit card customers? I remember students of top B-schools getting free credit cards from established issuers. But what about the rest of the young aspirationals? We all know there’s enough competition with some legacy Issuers who’ve got the proverbial “first-mover advantage”, but that also implies they’ve got the legacy systems! How can the next generation of Issuers work using first principles and craft a lean and superior product? We, at CARD91, will surely answer this question in the next few days to come ☺

However, for now, let’s just focus on the specific preferences, lifestyle, and spending habits of this demographic. Here are some features that I felt could be appealing:

Instant Card Issuance:

Millennials hate to wait! If an Issuer imbibes this core principle, a major advantage over legacy Issuers is already gained. Quick and easy application processes with instant card issuance for immediate use are absolutely non-negotiable for Gen Z.

Credit Card on UPI:

Although one may be new to credit card, UPI is omnipresent now! Gen Z is pretty familiar and comfortable using UPI and therefore, this is one of the must-have features to capture the market especially when the legacy issuers are still struggling to make it functional.

Reward Programs for Online Shopping, Food Delivery, Dining, and Entertainment:

Tailored rewards or cashback for online shopping on popular e-commerce platforms, special discounts on food delivery services or dining at partnered restaurants, and exclusive access to movie theatres, streaming services, music subscriptions, and live events are a must have!

Low Forex Markup for International Travel:

Unlike the previous generations, Gen Z is more keen to discover the world from an early age. Since it may still not be earning much, a LOW / ZERO FX mark-up feature on credit cards is surely a hotseller!

Travel Rewards for International or Domestic Trips:

Millennials are explorers in the true sense – domestic or international travel is always on their mind, and on the cards 🙂. Travel-related benefits such as discounts on domestic flights, hotel bookings, or holiday packages within India, exclusive lounge access, and waiver on fuel surcharge are needed in every credit card targeted at this generation.

Local Lifestyle Perks:

Millennials consider work-life balance very important in their overall well-being and are spoilt for choices when it comes to including “life” in their lifestyle! An Issuer must get into partnerships with local brands, gyms, spas, or wellness services to provide discounts or exclusive offers.

Financial Management Tools:

Millennials are eager to learn about building a large corpus. Budgeting features, spending insights, and real-time notifications to help cardholders manage their finances effectively can be a good attraction. An educational initiative on how to get maximum benefit from a credit card by being a transactor can help. Also, a tie-up with any personal finance assistant offering discounted or complimentary services is a plus point.

Customized Offers:

Millennials love personalized experiences! AI-led tailored promotions and discounts based on spending patterns and preferences can be a good draw.

Gamified Rewards:

Accelerated rewards with increasing spends and other milestones can hold this generation’s interest and drive higher card usage.

Language and Regional Support:

Although we are a large, English speaking nation, there’s an even larger chunk of population (Gen Z included) that still prefers Hindi or a local language. To create that “wow” factor, the Issuer can offer customer service and mobile app interfaces that support multiple languages and cater to regional preferences. 

Student-focused Features:

Career development is an important focus area for this generation. The Issuer that can give access to online courses, career-building resources, student discounts, or networking events to support professional growth will surely have an edge over others.

Flexible Credit Limits:

Millennials are either yet to start their professional journey or are in a very early stage. Cards that allow for flexible credit limits based on income and spending habits, giving users more control, are certainly more acceptable.

Green Initiatives:

With the increasing exposure to sustainability initiatives in academic institutions over the last few years, even my daughter teaches a lesson or two to me! Issuers offering cards manufactured in an eco-friendly manner or those with features that contribute to environmental causes will be able to emotionally connect with Gen Z millennials!

Collaborations with Local Influencers:

This generation has a far more extensive online social presence than physical presence. Partnering with popular local influencers or celebrities who are active online for exclusive offers and promotions can drive higher card usage.

Understanding the local culture, preferences, and the unique challenges faced by millennials in India is crucial to design the right credit card product that resonates with this demography. Additionally, keeping up with the rapidly evolving digital landscape and incorporating technology-driven solutions will likely appeal to the tech-savvy nature of millennials.

If you’re an Issuer, no time better than the present to launch a credit card product for this generation. 

Authored by Shailabh Kothari, Director – Sales and Alliances at CARD91

In today’s ever-evolving financial landscape, optimizing credit card management processes is imperative for sustained growth and regulatory compliance. That’s why I’m excited to introduce Optimus – an advanced credit card tech stack meticulously developed by CARD91. Optimus, derived from Latin meaning “The Best,” signifies a significant advancement in credit card life-cycle management, empowering financial institutions and raising customer service standards. 

With its customer-centric approach, Optimus enables financial institutions to meet the diverse needs of digitally savvy users. Through secure onboarding and a seamless digital journey, Optimus facilitates faster customer onboarding and improved service quality. By providing personalized rewards and streamlining processes, Optimus enhances customer satisfaction, elevating the overall customer experience and delivering added value to help institutions stand out in the rapidly growing credit card market.

Here are key features that position Optimus as a game-changer in credit card management –

Regulatory Compliance and Modernity:

Optimus is meticulously designed with a modern and modular framework to ensure strict adherence to industry regulations. This architecture provides financial institutions with a robust platform to navigate complex regulatory landscapes confidently. By upholding regulatory standards, Optimus mitigates the risk of penalties and legal issues, fostering a secure operational environment.

Configurable Credit Programs:

Optimus offers unparalleled configurability, allowing institutions to tailor credit programs to diverse customer needs and market dynamics. From setting credit limits to defining spending criteria and incentivizing usage, Optimus provides the flexibility to orchestrate credit programs seamlessly. This adaptability empowers institutions to stay agile and responsive to evolving market demands, driving innovation and maintaining competitiveness.

Customised Rewards:

Optimus enables financial institutions to offer personalized rewards tailored to individual cardholders’ preferences and spending habits. Whether it is cashback on specific categories, discounts at preferred merchants, or exclusive access to events, Optimus empowers institutions to create bespoke rewards programs that resonate with their customers, fostering stronger loyalty and engagement.

Digital-First Approach: 

Optimus offers a digital-first approach, prioritizing a user-centric experience aligned with modern expectations. By leveraging optimized digital channels and streamlined processes, Optimus enhances convenience and accessibility for cardholders, ensuring seamless interactions and efficient credit card management.

In conclusion, Optimus represents a transformative milestone in credit card management technology. With its robust regulatory compliance, configurable features, rewards program, and digital-first approach Optimus empowers financial institutions to navigate intricate regulatory environments while delivering unparalleled customer experiences.

I also extend my heartfelt congratulations to the exceptional CARD91 team for their dedication and innovation in launching Optimus. 

Ready to experience the future of credit card management? 

Reach out, and let us demonstrate the power of Optimus. Book DEMO now.

(Blog Authored By: Ajay Pandey, CEO & Co-Founder CARD91)

In today’s tech savvy world, customers want everything at the right time in the right quantity with minimal efforts and a seamless experience. Every Service provider is trying to provide financial products at the fingertip of the customer. This is a game changing opportunity for fintech to offer the unique, agile and ease to use next generation technology. 

Embedded finance is a buzz in the fintech industry and is growing at a tremendous rate. Covid-19 pandemic has accelerated the customer base and their engagements on these platforms.

What is Embedded Finance?

Embedded finance is a seamless integration of financial services with non-banking solutions. Customers can access financial products and services through mobile apps. Embedded finance can help businesses gain customer loyalty, increase customer base, better product offerings and more revenue opportunities. For Instance, Ola cabs is offering cab rides embedded with financing solutions such as wallet services (post-paid or limit based).

Embedded finance is also known as embedded banking. To provide financial services to customers. Businesses need to start exploring the opportunities of enabling embedded finance through a partner ecosystem which will significantly reduce their time of market time as well as low cost. 

In this customer centric world, embedded finance can provide significant advantages to businesses over their competitors. Previously, there was a gap between consumer requirements and the service offered by the seller. Embedded finance understands the gap and eliminates the need for a third party between consumer and seller. It is transforming the financial services distribution model and creating a revenue opportunity for businesses. 

Here are a few major manifestations of Embedded Finance:

Embedded Payments

Embedded payment means providing integrated services of payment processing within the app or platform itself. For e.g. Post-paid wallets or Payment Infrastructure offered by Ola or Amazon. While booking a cab from the Ola app, customers can easily make the payments by Ola wallet without the worries of carrying change to pay cab drivers on completion of ride.

Embedded Lending

Embedding credit offerings within the customer journey of non-financial digital apps or platforms. For Example, customers can now purchase any home appliance from the mobile app and convert the payments into easy EMI options on the same app.

Embedded Insurance

Embedded Insurance means bundling of Insurance along with the purchase of the products and services. Platforms partner with external Insurance companies to offer embedded insurance services for their customers. Online vehicle selling platforms, also enables customers to buy Car Insurance products while purchasing the vehicle.

Embedded Investment

Platforms integrate with the brokerage firm to offer investment services to their customers on their platform. Platform uses APIs of the brokerage firms for offering microservice ranging from opening an account, funding, trading, portfolio management, and market data.

Key players and their role in Embedded Finance Ecosystem

There are three main players working in the embedded finance ecosystem to offer better services and create new revenue opportunities.

Digital Platform

Customer facing digital platforms like mobile apps or desktop platforms who have a better understanding of customer needs.

Financial Institutions

Financial Institution like Bank, NBFC who provides financial services and manage all regulatory and compliance.

Embedded Finance Infrastructure Company

Fintech companies which act as a bridge between Digital platform and financial institution to offer end to end APIs, SDKs or software solutions thus enabling the embedded finance in the digital platform. With this, customers can enjoy the financial service within the same platform.

In India, UPI has transformed the payments landscape and made it simple for technology companies to become payment providers. To compete with the fast-changing digital world and rising demand for embedded finance, financial institutions are increasingly offering banking as a service (BaaS)—bundled offerings, often white-labelled or co-branded services, that nonbanks can use to serve their customers.