The presentation provides an basic overview on the payment card industry from history to future technology adoption. Work in progress for in-depth presentation.

1. PaymentCardsIndustry
Overview, Technology and Business
The presentation covers an basic overview on the payment card industry, introduction to cards, history, process,
segmentation and future technology adoption.

2. What is Payment?
ATM and
POS Mobile Online Branch
Cash Withdrawal
Cash Deposit
Balance Enquiry
Bill Payment
Shopping
Wallets
Payment Apps
Mobile Banking
Loan Payment
Bill Payment
Remittance
Shopping
Statement
Transfers
Remittance
Time Deposit
Purchasing
Account Opening
KYC Process
Cheque Payment
Loan/Cards Application
A payment is the financial transaction from one party to another for the purchase of goods,
or services through any of below channel.

3. Cards
Payment Cards can be distinguished using the various distinguished features.
Credit Card
- Linked to Line of Credit
- Primarily for Shopping
- Part Payment with interest
allowed.
- Most Popular among cards
- Has many features
Debit Card
- Linked to one’s account.
- Known as ATM Card
- Mainly used for Cash
Withdrawal at ATM
- Purchases at POS.
Prepaid Card
- Has open and closed loop
cards
- Amount is preloaded into
cards
- Gift Cards is a type of prepaid
cards
Charge Cards
- Full balance to the paid
shown in statement
- No Interest charged
- If not paid then future
transactions are reduced or
cancelled

4. Dinners
Club
Credit
Cards
American
Express
issues cards
Barclay
issues
creditcard
in UK
EMV is
launched
First movie
ticket
purchased
through
mobile
Google
Wallet
Launched
with NFC
Wearable
payment
launched
1050 1958 1966 1994 1999 2011 2017
Payment Card Timeline

5. Payment Card Evolution
EMV launched Chip Cards
EMV Cards
Using RFID Smart Card
Contactless Smart
Cards
Both EMV and Magstipe features
within same cards
Dual Interface Cards
Wearable, e-Wallets
NFC Communication
Start
Success Continues
Started Originally as
magstripe cards
MagStripe Cards
Alipay, Bharat QR code
QR Payment

6. What are various features in a card
There are two classification of cards – EMV and Magstripe
EMV – Europay Mastercard Visa.
Data stored in chip and more secured
Magstripe
Data stored in Magnetic stripe behind the cards

7. Payment Brands

8. Payment Card Stakeholder
Acquirer bank
Provides platform to
merchants and earns
fee for this
Clearing Network
Earn membership fee
and commissions.
Issuer Bank
Issues cards to
customer and earns
fee, cross selling so
on.
Regulatory Standards
PCI, SWIFT, ISO 8583
Customer purchases a product or services
Merchants sells product or services

9. Prepaid CardTypes
Open Loop
Closed Loop
Single Use Cards
Cards are reloadable and can be
used as long as funds are
available
Can be used with specific
retailer such metro, transit or
hospital
These are single use cards
and mostly a retailer gift
card
03
02
01

10. Will use card mostly as the interest will be on entertainment
Look for cards to spend on movies, restaurants, gadgets
Age – 18 to 25
Will look for cards for aspirational reasons.
Look for cards to spend on entrainment, travel, and personal needs.
Interested in getting rewards and loyalty bonus
Age – 26 to 40
Will be mostly saving for future and planning for future.
Look to spend on family, entrainment, dining, travel so on
Interested in getting rewards and loyalty.
Age – 40+
01
02
03
Retail Customer Segmentation

11. 04
Business Customer Segmentation
Cards can be distributed from the retail outlet.
Retail Partner Distribution
Prepaid cards can be used to load money before you start travel especially whilst
travelling abroad helping travellers are free from carrying cash.
Fleet owners could issue prepaid cards.
Travel
Prepaid cards can be issued and used for transactions at - Tolls, Metros, Citizen
Benefits, Student, Security Agencies.
Government
01
02
03
The Prepaid Cards could be issues for third party processors, micro finance institutions,
e-wallet companies, rewards companies, insurance companies.
Financial Institutions

12. Political Economical Social Technology Environment Legal
Political stability leading
to steady supply chain
and sales.
Indian economy is
growing at a faster rate.
Government and Red
tape can be a big
problem.
India still has difficult
laws and restrictions on
Foreign Direct
Investments.
Payment Industry had
maintained impressive
growth.
Payment industry is
expected to be 500
billion by 2021.
Payment industry is
predicted to have
grown to 8 to 13% of
India GDP.
An increase in
disposable income will
boost consumer
confidence resulting in
increased sales.
Changing consumer
preferences are going to
have a deep impact
rural sector.
Customer wants more
personalized service.
More focus shall be on
customer engagement.
Better use of
technology to enrich
customer experience.
A number of new
technologies like AI and
cognitive intelligence
are going to change the
landscape in the coming
years.
Even cloud computing,
IoT and Distributed
intelligence are going to
have a deep impact on
the sector.
Investment needed a
lot in reducing carbon
footprint and in
renewable energy.
Driving improvement in
packaging sustainability
across the entire supply
chain will be a key
factor.
Focus should be
achieving 100%
renewable energy
usage in the long term.
Overall, the legal
scenario is quite
complex and retailers
have to be cautious
since any violation can
result in big fines.
Favourable government
and central bank policy.
Various other
regulatory policies.
PESTEL Analysis

13. Card Growth Over 5 years
Year Credit Debit
2014-15 20 554
2015-16 24 680
2016-17 29 790
2017-18 38 890
2018-19 47 925
PoS Terminal Growth
Year PoS
2014-15 1.4
2015-16 1.5
2016-17 2.4
2017-18 2.8
2018-19 3.9
UPI Transaction
Year UPI
2016-17 0
2017-18 900
2018-19 5300
2019-20 9000
PPI Transaction Growth
Year Prepaid
2014-15 400
2015-16 800
2016-17 2000
2017-18 3500
2018-19 4700
Credit Card grown at a CAGR of 18%
Debit Card grown at a CAGR of 10% PoS Terminal has grown at CAGR of 23% PPI has grown at CAGR of 64% UPI Grown from 0 to 1 at CAGR of 874%
400
500
600
700
800
900
1,000
10
20
30
40
50
2014-15 2015-16 2016-17 2017-18 2018-19
Credit Debit
0
1
2
3
4
0
1000
2000
3000
4000
5000
0
2000
4000
6000
8000
10000
In millions
In millions In millions In millions
Payment Card Industry Analysis - India

14. Back End Operation Function
Account
Setup
- Customer ID
- Account No
- Credit Card 1
- Credit Card 2
Card
Production
- Card Production
Standards
- Card Production
Scheduling
- Security
standard
- Embossing /
Encoding
- PIN Production
Payment
Processing
- Collect sales
draft from
merchant
- Acquiring Bank
will send the
details to issuing
bank for
settlement and
reconciliation
Statement
Production
- Generate
statements
- Send end of
month statements
- Statement will
have all customer
and transaction
for billing cycle
Recovery
and
Collection
- Collection
- Credit Card Frauds
- Legal issues
- Recovery process

15. General Card Payment Flow
Card holder
Issuer Bank
Payment Network
Merchant
Acquirer Bank
Payment Made
Product or Service Delivered
Interchange Fee
Fund Settlement
Invoice Payment
Service
Fee
Funds
SettlementAdhere to rules defined. Act as
switch and router between Issuer
and Acquirer

16. Few Type of Prepaid Cards Fee
Load/Reload Fee Bill Payment Fee
On-us/Other Network Usage Fee Cash Withdrawal Fee
Balance Inquiry Fee Card Replacement Fee
Statement Fee Additional Card Fee
Transfer Fee Transaction Fee
Above are few fees that could be applied to cards but not limited to.

17. Use Cases
Use Case 1
Credit Card
Money Transfer Fulfillment Reconcile and Settlement
Customer swipes a Citi
Bank card at a HPCL in
HDFC POS via Visa
Payment Network
HPCL fills the tank and
completes
transactions
Citi bank Issuer
reconciles with Visa
and HDFC settles
funds with Visa.
Use Case 2
Debit Card
SBI Debit Card holder
BESCOM bill payment
BESCOM flags
customer as paid
SBI reconciles with
BESCOM and settles
funds
Use Case 3
Credit Card
Ecommerce
payment
ICICI MC Credit Card
Holder purchases MI
Note in Amazon using
PAYTM Wallet
Amazon delivers the
Phone to customer
ICICI reconcile with
MC and PAYTM. ICICI
settles fund with
Amazon.

18. Prepaid Card Market Analysis
Global Volume Increase
at 25%
Global Prepaid Market size
$ 3.6 Trillion by 2025
India accounts for 8% of
the Asian market
Global Annual CAGR 22%
India market to grow at
37% Annual CAGR

19. Future of Payments – Cash to Digital
Real time payment will be much faster and available immediately.RTP
Aid in reducing transaction cost and improve remittances.BlockChain
Voice assistants and VR will enable voice first solution.Virtual
Visa/MasterCard Free Product launched by NPCIUPI
13:55
13:55
Advanced economies adapt cashless strategyCashLess

20. Thank you !!!