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

  • The current value of the rupee does not merit market intervention

    The rupee, losing 40 paise per month against the dollar since May, is expected to remain under pressure till the calendar runs out on December 31, bef

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

Tushar Gandhi

Sustainable model for rural sanitation

Prime minister Narendra Modi has promised to build a toilet ...

Zehra Naqvi

How smells evoke strong memories

Remember that time when a passing fragrance transported you to ...

Dharmendra Khandal

Indian zoos need a fresh approach

Recently, when a man jumped in a tiger trench of ...

INTERVIEWS

William D. Green

Chairman & CEO, Accenture