Debit, pre-paid cards can be used for financial inclusion

Tags: News
With a high growth potential, debit and pre-paid cards can be used to accelerate financial inclusion and reaching out to rural India, a senior MasterCard Worldwide official said here today.

"These cards will be one of the electronic models for cash displacements and reduce cash and cheque-based transactions in the coming decade in the country," T V Seshadri, Global Executive for Global Products & Solutions at MasterCard World, told PTI here.

The Reserve Bank of India (RBI) estimates some 700 million Indians were still outside the banking system due to limited access in rural regions.

But Seshadri believes the accelerated way to reach this huge market would be through debit/pre-paid cards, leveraging on the pre-paid mobile/cell phone networks that have spread across the country.

RBI leads the government drive to migrate from cash-based to electronics financial transactions, according to Seshadri, who has been on a number Indian government and state programmes studying and implementing initiatives to cash-less dealing.

He highlighted the government's business correspondence scheme, which would allow small shops and mobile outlets in every village to handle electronic transactions such as the pre-paid cards.

There was a limitation in growing the banking systems in rural India with only 70,000 bank branches covering some 600,000-700,000 villages.

But small shops serving each village would be better optioned to expand its services by offering card top-up service which for mobile phones was already happening, Seshadri said.

At state level, Chattishgarh's student scholarship payments was one of the programmes that opted for card- based, safe and secure electronic system, he said.

Punjab was considering agricultural/commodity payment and settlement initiatives through card-based or cash-less electronics transactions, said Seshadri, who has been discussed such a scheme by the state government.

On the broader front, he also highlighted the Indian government's plan to introduce GIRO, an electronic bank- account deducting system for settling bills.

The Aadhar identification has incorporated electronic card based security code chip for authentification, said the Singapore-based Seshadri.

He said more such schemes would follow the government's cash displacement, financial inclusion and pre-paid mobile phone-linked transactions.

To date, debit card has appeared the most suitable product for the Indian market, as people were more wary of using a credit card, which comes with a credit line from a bank.

Post new comment

E-mail ID will not be published
CAPTCHA
This question is for testing whether you are a human visitor and to prevent automated spam submissions.

EDITORIAL OF THE DAY

  • Bureaucrats have enjoyed flying miles at taxpayer expense for too long

    The beleaguered Indian taxpayer will certainly applaud prime minister Narendra Modi’s attempt to deliver on his promise of cutting down fiscal defic

FC NEWSLETTER

Stay informed on our latest news!

INTERVIEWS

GV Nageswara Rao

MD & CEO, IDBI Federal Life

Timothy Moe

Goldman Sachs

Chander Mohan Sethi

CMD, Reckitt Benckiser India

COLUMNIST

Varun Dutt

<b>Riskfactor</b>: CHAIN REACTION

A domino effect is the cumulative effect produced when one ...

Zehra Naqvi

Rememberance and forgetting are crucial

Memories are so vital to our lives that they can ...

Dharmendra Khandal

Sandalwood may get extinct if not protected

When we talk of sandalwood, the most common usage that ...

INTERVIEWS

William D. Green

Chairman & CEO, Accenture