PAYMENT SYSTEMS – 3rd Annual Summit

Innovative, Inclusive and Integrated

Approach for Payment Systems

Biju J. John

HEAD, BANKING AND FINANCIAL SERVICES

HCL INFOSYSTEMS LTD

Payments system impacts

Payments System

PCI DSS

PA-DSS

EM

V

Internet

Co

ntactless

Sch

eme

Man

dates

Gif

t C

ard

s

Technology

platforms

Pre-P

aid

MobileBanking

MobilePayments

ATM

Kiosk

s

Instant

Issuing

1:1Marketing

Loyalty

Cross border

Profitabilityimprovement

and CostReduction

Payment Systems and IT

Payment systems to be supportive of strong inclusive, functionally diverse, efficient and

flexible, financial system. Global standards required.

All are expected to DO MORE WITH LESS. With the insight of how cost, profit and value

are created, organizations can allocate resources more efficiently, earn profit and

maximize value.

Innovation and Integration is the major focus of E-Payments.

Information has long been a leader's most valued tool.

Analysed information helps avoid squandering valuable resources and using it with a

decision making framework requires great skill and investment; but it can deliver vast

rewards and reach you to your goal.

IT has brought seamless access to global resources and thinning of the branch and

connecting globally distributed back offices seamlessly

Efficiency and cost-effectiveness, making a 24/7 Customer experience possible

E-Banking reduces paper usage and storage costs

Green Banking – Energy reduction and usage of Energy Management

India - Facts

Second fastest growing economy, hotbed of technological advances

Worlds Largest Democracy; a sound legal and judicial system

20 million potential employees available to the IT industry alone

India has the 2nd largest pool of scientists and engineers

54% of Indians less than 25 years old – Youngest country

3rd Largest English speaking country in the world

Mobile phone subscriber base nearing 5 million, talking nation

$ 1031 annual per capita nominal GDP Ranked 139/180; among poorest

Among top 5 countries when it comes to number of billionaires

We owe a lot to the Indians who taught us to count without which no

worthwhile scientific discovery could have been made. - Albert Einstein

The Future

No Innovation, No Integration = No Efficiency

Evolution of Payments

Core Payment Products

• Bank Transfers• Credit Cards• Debit (international and

domestic) cards• Stored value accounts

(SVA)

• Physical channel: contactless proximity technologies

• Online channel – bank transfers, cards or SVA accounts

• Mobile channel – proximity or remote payments; all payment products

• Critical mass for:• Online payments• Contactless payments• Mobile payments (open

and interoperable)• Mobile / online convergence

Channel / Technology Innovations

Point of Arrival – Advanced Payments

Payments relating to Online Commerce (B2C) and Online Personal (P2P) payments. These are made with payment cards, bank transfers, or stored value accounts

Payments made at points of sale (POS) – card equipped with RFID functionality. Expected to be used for low value transactions at locations where speed of payment is important

Mobile payments and other financial services transactions that are initiated using a handheld mobile communications device. This covers both remote or NFC based proximity payments

ONLINE COMMERCEONLINE COMMERCE MOBILE PAYMENTS(REMOTE, NFC)MOBILE PAYMENTS(REMOTE, NFC)CONTACTLESSCONTACTLESS

Key trends in three core areas of payments

A D V A N C E D P A Y M E N T SA D V A N C E D P A Y M E N T S

Mobile phone : most successful communication device

• Over a million new subscribers a day

1 billion+ subscribers1 billion+ subscribers

2 billion subscribers2 billion subscribers

3.5 billion subscribers3.5 billion subscribers

0

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000

4,500

5,000

2003 2004 2005 2006 2007 2008 2009 2010 2011

Glo

bal

mo

bile

su

bsc

rib

ers

(mill

ion

s)

Actual Projected

Estimated 5 billion subscribersEstimated 5 billion subscribers

• Many developed countries over 100% penetration

• Rising fast in developing countries

• 615 million mobile wallets in 2011, growing to 1.4 B by 2015

$

Domestic Cross-Border

Remittances

Informational Transactional

Proximity (Contactless) Remote (Digital or

Physical Delivery)

Mobile Money Transfers (P2P)Mobile Money Transfers (P2P)

Mobile Banking Mobile Banking

MobilePayments / M Commerce (P2B)

MobilePayments / M Commerce (P2B)

Mobile based Financial Services - opportunities.

Each area offers opportunities to generate direct / indirect revenues

Mobile Financial ServicesMobile Financial Services

$0

$500

$1,000

$1,500

$2,000

$2,500

$3,000

2010 2011 2012 2013 2014 2015

Bill

ions

Domination of Online payments will continue

Global Advanced Payment Forecasts – Relative Payment Volumes in $

Mobile $510 B

Contactless Cards $395 B

Online $1,842 B

Source: Edgar, Dunn & Company Forecasts 2009 – Advanced Payments Report 2009

ATM - Trends and current scenario

HCL Infosystems In Payments

HCL Infosystems works with leading providers of integrated solutions for self-service banking and payment processing. The same solution serves over 1,500 customers in more than 50 countries.

Drives self-service financial transactions and payments, including advanced transactions such as prepay, through Internet access points, ATMs, POS terminals, and phones. More than 100,000 ATMs and 380,000 POS terminals worldwide run on this solution.

Built on open systems, the solutions provide consolidated management information, card management, 3DES and EMV enablement, and loyalty management.

Complies with new regulations and security enhancements, such as the Payment Card Industry Data Security Standard (PCI DSS). Complies to Visa’s Payment Application Best Practices (PABP)

We can help customers achieve compliance with the latest data security standards developed by the payment card industry.

Current scenario in Inclusive Banking

What India is trying to do in FINANCIAL INCLUSION has

great lessons for the entire world

Innovative technology applications to bring down the

cost of transaction as well as making it easy to use.

The next billion dollar banking technology opportunity through cost-

effective and convenient means for people whose transaction sizes

would be low.

Involves access side technologies smart card-based, mobile-based

and biometrics-based solutions for non-cash transactions and micro

ATMs or similar devices for cash-based transactions.

Why no progress in FI : Few System Integrators, Absence of Reach,

Coverage; No proper delivery mechanism; Transactions low

HCL Infosystems in Financial Inclusion

HCL’s Offerings for Financial Inclusion

Innovations in Hardware

VOICE ENABLEDTOUCH SCREEN KIOSKS FOR NREGAPROJECTS

KIOSKS FOR CHEQUE DEPOSIT, PASSBOOK PRINTING, INFO & NON CASH TRANSACTIONS

FI ENROLLMENT KIT HCLS HHT

HCLs BANK DATA CENTRE IN A BOX

DisplayColor TFT LCD with Function Key

Topper(Optional)

Power110~240Vac, 50/60Hz

Receipt PrinterGraphical thermal

Cash Dispenser

Security Camera For Portrait

Safe & LockUL 291 Level 1Dual Combination electronic LockDoor open sensorTemperature/Vibration sensor

Earphone jack

EPP (Encrypting PIN Pad)PCI ComplianceEncrypting PIN Pad : T-DESADA supportOptional RKT support (RSA)

Internal Speaker

Card handlingDip Smart card readerSmart card (EMV 4.0)

Option BayFingerprint Scanner

Green’novation in ATMs

IINCREASE YOUR ATMS’

ENERGY EFFICIENCY , PERFORMANCE

RELIABILITY & REDUCE TRANSACTION COST

Reduced Energy Costs

Centralized Automatic Alerts for security &

Fire (Auto SMS)

Online Power monitoring for better visibility

Monitoring controller & GPRS at central

location

Asset Management; Better Serviceability

Reduced Operation & Maintenance costs

Integrated approach

Sustainability - Going GREEN

Reduced Transaction cost for ATMs

Power Management Solutions for ATMs

For 40,000 ATMs.

440 cr of investment yields a

saving of 560 cr equivalent to

550 MT GHG emissions reduction

over a 7 year period

With Solar and Energy option

controls with an investment of

1100 cr yields a savings of 1200 cr

over a 7 year period

equivalent to

1300 MT GHG emissions reduction

over a 7 year period

Innovations in Software

CORE BANKING application for CBS/ FI with LOCAL LANGUAGE SUPPORT for very cost effective and faster penetration of Banking Services in Rural and Semi Urban Areas.

Image Service Bureau;Software and facilities for CHEQUE TRUNCATION Implementation

MOBILE BANKING Application to support all payments and technologies

PAYMENT SOLUTIONS for Cash Remittances TO & FROM Unbanked Masses – Helps to generate leads and Information of the Unbanked

WEB BASED ENQUIRY for all payment status for retail, corporate and participant Bankers at National Level

Solutions to make MERCHANT ENROLMENTS easier and faster for faster payments. Easy integration of PSO devices irrespective of brands with standard protocols

SINGLE VIEW of customer activity by keeping data in a unified database irrespective of the card type, access channel or transaction performed Accessed by a Portal making this easier to deploy and manage

CARD ISSUANCE SOLUTION with EMV chip instantly personalised in branch ; Mag-stripe instantly encoded in branch PIN management performed at time of account opening; Card printed instantly in branch

Typical Payments Platform

SI WITH TOTAL SOLUTIONS FOR BANKING

Computing & Peripherals

• Desktops

• Laptops

• Servers

• Thin Clients

• Kiosks

• Scanners

• Interactive boards

• Projectors

• Plasma screens

• MFP/MFD

• Digital Duplicators

• POS

Networking & Communication • Switches• Wi-Fi A.Ps• Routers, cabling• LL Modems• BB/ISDN Modems• VOIP Phones• DSL CPEs• EPABX + Phones• IP PBX & KTS• Soft Switches• Audio Conf.• Video Conf.• Mobiles• Fax

Security & Surveillance

• Security Appliances• Firewall• UTM device• SSL VPN• Client Security• Surveillance DVRs• Cameras• Access Control• Smart card • Biometrics• Asset tracking• RFID• Fire Suppression

Power & Consumables

• UPS• Generator• Cabling• Earthing• Consumables• Batteries• Toner • Stationery

ATMs

• Full Function ATM

• Cash Dispenser

• CD with finger-print Biometric and associated software.

• CD with UL 291 (Business Hours Safe)

• SIS Services

• Rural ATM

• BNA

IT Infrastructure & Application Services Facilities Management

HCL supports over 1.2M IT+OA assets annually across different industry segments spread over 60,000 branches

HCL Spectrum: Services & Offerings

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INDIAs Payment Systems should be on par with global industry standards and protecting our social interests and creating a difference for A BILLION INDIANS

Technology for Business Transformations

Technologies can provide great performance..

Only with…..

SSmart mart IIntegration ntegration

Smart Integration

HCL INFOSYSTEMS LTD – 505 OFFICES - DIRECT SUPPORT AN ISO 9001 14001 18001 27001 and CMM INDIAN SYSTEM INTEGRATOR - 12000 cr INDIA REVENUES

Conclusion

An Innovative, Inclusive and Integrated Solution approach allows solution scaling, cost reduction, Greener IT, and faster implementation of banking services in India

An Application provider excels in application domain but lacks the experience to cover all services. A System Integrator excels in managing and providing the complete gamut of services for Payment Systems

Thank you

biju@hcl.in

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