Digital Payments South Asia

Registration

Overview and Objectives
Introduction to the sessions and the objectives of Digital Payments South Asia

Keynotes and Opening Addresses
- Reserve Bank of India
- National Payments Corporation of India (NPCI)

On the Road to Interoperability
Mobile wallets in India have experienced exploding usage during demonetisation, plateauing after cash was reintroduced, a slowdown in transactions after mandatory KYC requirements, and a new upsurge since May this year. Upcoming regulatory guidelines are expected to first enable interoperability between KYC-compliant prepaid payment instruments (PPIs) including mobile wallets, and later interoperability between PPIs and banks. This session explores how these changes will impact development of mobile wallets in India’s retail payments business.

· After the up-and-down experiences and challenges faced by mobile wallet companies in India since demonetization, what is the outlook for mobile wallet transactions and sales volume?
· Mobile wallet providers have complained about the challenges of implementing mandatory KYC requirements but what would be some of the benefits for both customers and the mobile wallets?
· Why has the mobile wallet industry proposed that they be able to access merchant payments on an interoperable framework with applicable merchant discount rates and interchange fees?
· How would mobile wallet providers benefit from an interoperable framework for retail payments and the ability to settle transactions directly over the same payment network as banks?
· What would be some of the long-term benefits of introducing interoperability between mobile wallets (prepaid payments instruments - PPIs), bank accounts and cards in a phased manner?

Viewpoint 1: Speaker to be advised [~20min]
Viewpoint 2: Speaker to be advised [~20min]
Viewpoint 3: Speaker to be advised [~20min]

Discussions: A democratised operating framework for mobile wallets
Mobile wallet providers are requesting a more even footing with banks including status as payment service providers (PSPs), instead of their current prepaid (PPI) status, and to be able to access merchant payments over an interoperable network based on the same MDR and interchange framework as banks. What would be the benefits to mobile wallet companies if they become participants in the existing bank payments ecosystem? Other than full interoperability between mobile wallets, how will this benefit their customers? Will there then be “issuing mobile wallets” and “acquiring mobile wallets”, for both push and pull mobile payments? Will mandatory KYC requirements for their customer base be the only requirement that enables this opening up of retail payments interoperability for mobile wallet companies? Or will mobile wallets also face higher capital requirements for interoperability?

Refreshments

UPI - paying as fast as messaging
Unified Payments Interface (UPI) transactions increased from 2M in December 2016 to over 246M in June 2018, while the total monthly transaction amount increased nearly 60 times from Rs 700 crore to over Rs 40,000 crore (over USD5.5Bn) in the same period. An over-arching set of payment rails based on mobile-based real-time payments and providing ubiquitous interoperability between every payment system in India is proving to be a powerful proposition for driving digital payments. This session explores the many new opportunities enabled by UPI.

· UPI transactions through mobile wallets are increasing rapidly and new mobile payments services appear to be focusing on UPI payments. Is UPI the future for all mobile payments transactions?
· If UPI's low-cost, level playing field enables more organisations to launch mobile real-time consumer payments services, how will this impact the consumer payments business in India?
· With the national interoperability, pricing regulation and service uniformity provided by UPI, how can banks and mobile payments companies compete for customers based on service offerings?
· Today more than 90% of UPI transactions are P2P, which (usually) attract no fees, and UPI merchant transaction charges are low and getting lower. So where is the business model for UPI-based payments?
· Unified Payments Interface (UPI) 2.0 enables new payments services, particularly “for merchant” features. Does it go far enough to drive P2M transactions? What should be added in a future UPI release?

Viewpoint 1: Speaker to be advised [~20min]
Viewpoint 2: Speaker to be advised [~20min]
Viewpoint 3: Speaker to be advised [~20min]

Discussions: Real-time payments, mobile wallets and card-based payments
India's digital payments market is estimated to increase from about $200 billion today to $1 trillion by 2023[1]. Will that growth be driven by real-time payments, mobile wallets or card-based payments? UPI transactions are growing at a phenomenal rate but are they undermining the original objective of payments banks and mobile wallets? Most UPI transactions today are P2P - is this accurate or are many UPI transactions P2M or P2G? What strategies could assist the development of UPI transactions in the retail sector? If the number of UPI P2M transactions could be significantly increased, then will this grow the total volume of digital payments transactions? Or would growth in the number of retail UPI transactions compete with or even cannibalise card-based payments and mobile wallet payments in India?

Lunch

Bringing the underbanked into the payments business
Aadhaar has registered almost 90% of the population (1.2 Bn people). Using the program to provide access to payments services is proving to be transformative. Aadhaar-based payment solutions are designed to be easy-to-use and reduce the costs of providing financial services to the underbanked. The Aadhaar enabled payment system (AEPS), Aadhaar Pay App and Aadhaar Payment Bridge are driving simple and low-cost financial inclusion. But the future of payments banks as a channel to bring formal financial services to the underbanked appears less certain.

· India's 800M rural population is largely poor, used to cash payments, and unfamiliar with financial services. How can simple and easy-to-use payment services be made available to these citizens at a low cost?
· AePS transactions are growing but why were there only around 100M AePS transactions in 2017-2018 across 250M households in India - less than one transaction a year for each rural household?
· What are the challenges today for the micro ATM and business correspondent model that provides basic payment services to rural citizens using the Aadhaar enabled payment system (AEPS)?
· Recent discussions about the level of micro ATM interchange fees has highlighted the challenges for banks which install and manage Micro ATM devices across rural areas. Could this business model be improved?
· UPI launched on smartphones but is available on feature phones. With 50% growth in India's feature phone market would customer UPI be a better approach to financial inclusion than the BC/micro ATM approach?

Viewpoint 1: Speaker to be advised [~20min]
Viewpoint 2: Speaker to be advised [~20min]
Viewpoint 3: Speaker to be advised [~20min]

Discussions: Outlook for payments banks
Payments Banks were intended to introduce un-banked/under-banked citizens to the first tier of financial services. In a business segment with challenging profitability (no revenue stream from lending), recent government requirements for more stringent KYC have limited growth. The Jan-Dhan Yojana financial inclusion initiative provided almost every Indian household with access to a bank account, removing the unbanked market which was the original objective of payments banks. Then the Unified Payments Interface (UPI) enabled digital technology companies and full-scale banks to compete with the payments banks. They may soon face more competition from interoperable mobile wallets. A lot has now changed since the concept of payment banks was first proposed in 2013-2014. Does the payments industry believe there is still a market for payments banks and their entry-level financial services?

Refreshments

Introduction
In this session, all conference delegates will have the opportunity to participate in 1 of 3 roundtable discussions lasting 20min each, chosen from the list of roundtables below. Each roundtable discussion will be assisted by experts who will facilitate, but not lead each roundtable. The objective is to provide an informal opportunity for all delegates to join discussions and get their questions answered.

1 - Accelerating Mobile Wallet Adoption and Usage
Average mobile wallet transactions are low compared to other e-payment modes such as cards. How can mobile wallet companies entice their customers to spend more - but without the cost of cashbacks offers and discounts?  

2 - The Business Model for Consumer Payments in India
The payments industry supports the objective to expand e-payments acceptance and usage but with MDR capped for all card payments and low or zero fees for real-time payments, where is the retail payments business model in India?

3 - The Commercial Proposition for Financial Inclusion
Commercial opportunities usually drive innovation and create results. Can we create improved outcomes for financial inclusion by aligning our commercial interests with long-term well-being of people who most need financial services?

Close of day one

Review and objectives
Recap of day one discussions and introduction to day two of Digital Payments South Asia

Government of India Perspectives on NCMC
The MoHUA presents an update on latest developments in the National Common Mobility Card (NCMC) initiative and their perspectives on lessons learned so far, benefits for stakeholders and the road ahead for implementation.

Expanding contactless acceptance and contactless payments
Adoption and usage of EMV contactless payment cards is creating convenience for consumers and business efficiencies for merchants in markets around the world. They are expanding e-payments by displacing cash for low value transactions. EMV contactless cards and NFC mobile phones that support EMV contactless are faster and easier to use than both cash and QR code mobile payments. This session looks at the outlook for contactless card-based retail payments in India where card acceptance still has a long way to go.

· Can India achieve Australia’s level of success with contactless acceptance where over 80% of payment card transactions at major retailers are now contactless?
· Markets such as Australia, UK and Poland highlight the success of contactless payments, but will they only be successful in markets where card payments are mature and does that not include India?
· What will be the impact of the Finance Ministry request that all new cards issued should support EMV contactless technology? Will this be effective without a similar request for contactless acceptance?
· What are the new low-cost EMV contactless acceptance solutions, such as PIN on Glass, that can on-board micro merchants for e-payments by accepting EMV contactless payment cards and NFC mobile phones?
· With the numerous mobile wallet companies in India, Bharat QR, and now UPI-based payments on mobile, are the “Pays” and their mobile NFC payment products likely to have much success in the Indian market?

Viewpoint 1: Speaker to be advised [~20min]
Viewpoint 2: Speaker to be advised [~20min]
Viewpoint 3: Speaker to be advised [~20min]

Discussions: The future of card payments in India
India leads the world in innovations in consumer payments. NPCI, the umbrella organisation for retail payments in India, was the first domestic payments operator to enable a nationwide interoperable real-time consumer payments scheme alongside the existing national card payments scheme. Most Indian banks are also offering UPI-based real-time mobile payments alongside EMV compliant card-based payments. Today UPI-based payments are accelerating faster than card payments. Most UPI-based payments today are P2P but with the release of UPI 2.0 the proportion of P2M payments is expected to increase. Is it likely that the volume and value of UPI-based payments will exceed that of card payments in India in the future? Will or retail payments eventually shift to the UPI platform? What is that likely to mean for the payments industry in India?

Refreshments

Open-loop payments in public transport
Contactless transit ticketing schemes that collect public transport revenue generate high volumes of low value e-payment transactions. EMV-based contactless payment cards are being introduced as a new approach to transit revenue collection and fare payment products. Transport authorities are exploring the use of bank-issued EMV open-loop contactless payment cards as ticketing media. This session explores business opportunities for banks and transport operators to collaborate and drive acceptance and usage of contactless payments in transport and retail applications.

· What are the benefits for accepting third-party EMV-based fare media and what are the commercial and practical considerations that need to be addressed by both the public transport operators and the banks?
· EMV-based National Common Mobility Card (NCMC) schemes will need to issue prepaid contactless NCMC cards to customers that are unbanked or under-banked. Will PTOs or banks issue these prepaid cards?
· Initial NCMC transport card schemes were restricted to a single issuing bank. What have been the outcomes of such commercial agreements on the success of the NCMC transport ticketing schemes?
· If NCMC contactless payment cards are accepted in a public transport ticketing scheme and for open-loop retail payments, then can they be accepted by every public transport ticketing scheme in India?
· There is growing interest in using QR code mobile payments in public transport ticketing, particularly for single journey tickets. Will mobile wallet interoperability make it easier to adopt QR codes in transit?

Viewpoint 1: Speaker to be advised [~20min]
Viewpoint 2: Speaker to be advised [~20min]
Viewpoint 3: Speaker to be advised [~20min]

Discussions: Practical issues for accepting open-loop payments in transit
How will open-loop payments in transit offer new opportunities to transport authorities and operators in India? How feasible will it be to migrate to accepting bank-issued fare media when some public transport customers are unbanked or underbanked? What will be the challenges of integrating legacy transport ticketing systems with EMV devices and related architecture for both account-based and card-based ticketing? Are these challenges the responsibility of the transport authorities or their bank partners that are issuing the contactless payment cards for transport payments? Are public transport payments an opportunity to NFC mobile payments products? Or is the growth of smartphones and mobile wallets in India more likely to enable acceptance of other third-party fare media for transport payments in India, such as QR code-based mobile payments?

Lunch

New Levels of Security and Convenience
Despite the development of real-time payments and mobile wallets, the payment cards market continues to grow and issuers are offering active cardholders a variety of next-generation cards with new capabilities targeting increased security and greater convenience, including biometric EMV contactless cards. At the same time there are a growing number of e-payments companies (Paytm, Uber, Stripe) now entering the payment card issuing business. Why is the payment card market continuing to expand and what is the outlook for next-generation card payments?

· Why are biometric payment cards a good fit with the new scheme requirements for all new acceptance terminals to be EMV contactless-enabled and all new cards issued to support EMV contactless?
· How can biometric EMV contactless payment cards prevent fraud on lost and stolen cards and remove the adverse media coverage and customer concerns raised by fraudsters on stolen card spending sprees? · How will payment cards with on-card fingerprint biometrics eliminate PIN theft by fraudsters using shoulder surfing, miniature undetectable cameras near ATMs or payment terminals, or fake keyboards on ATMs.?
· Today it is challenging for cardholders to make higher value EMV contactless card payments. How will biometric on-card CVM support EMV contactless card payments of any ticket size?
· In a developing card market such as India, but with the regulator focused on customer protection, how do next-generation payment cards such as biometric cards and display cards fit into the payment card business?

Viewpoint 1: Speaker to be advised [~20min]
Viewpoint 2: Speaker to be advised [~20min]
Viewpoint 3: Speaker to be advised [~20min]

Discussions: Strategies for next-generation payment cards
How will the market for next-generation payment cards such as biometric contactless payment cards and dynamic code verification cards develop? Will on-card biometrics replace PIN as the new CVM for in-store and ATM transactions? What will be the impact of biometric cards on the contactless payment card market? Will the concept of low-value versus high-value, and contactless payment thresholds, disappear? Will the rapid uptake of e-commerce in India provide an opportunity for dynamic code verification cards and will banks need to upgrade their host systems to support these solutions? The two most challenging issues are likely to be the business model and issuing cards to customers. Are there new business models for issuers to manage the higher costs of biometric card and display card products? How should issuers manage the new challenge of customer biometric registration?

Refreshments

Introduction
In this final session, all conference delegates will have the opportunity to participate in 1 of 3 roundtable discussions lasting 20min each, chosen from the list of roundtables below. Each roundtable discussion will be assisted by experts who will facilitate, but not lead each roundtable. The objective is to provide an informal opportunity for all delegates to join discussions and get their questions answered.

1 - Accelerating e-Payments Acceptance and Usage
Both mobile QR code payments and contactless payments have been proven to expand e-payments by displacing cash for low value transactions. But which is likely to have a greater impact on the adoption of e-payments in India?

2 - Open-Loop Transport Payments in India
What will be the most successful third-party payment products accepted in public transport ticketing schemes in India and why? Domestic open-loop contactless cards, international scheme contactless cards, mobile QR code wallets?

3 - Bringing Biometrics to Card Payments
In a market where fingerprint biometrics are widely used in government applications, how will customers respond to the higher levels of convenience and security offered by biometric contactless payment cards?

Closing remarks
- National Payments Corporation of India (NPCI)
- APSCA

Close of Digital Payments South Asia