The Reserve Bank of India has published Payments Systems in India - Vision 2009-12, a report that outlines several major initiatives that the bank is undertaking with respect to the payment systems in India. Among them is India Card - a domestic card initiative.

Quoting from the report: "The concept of a domestic payment card (India Card) and a PoS switch network for issuance and acceptance of payment cards would be looked into. The need for such a system arises from two major considerations (a) the high cost borne by the Indian banks for affiliation with international card associations in the absence of a domestic price setter (b) the connection with international card associations resulting in the need for routing even domestic transactions, which account for more than 90% of the total, through a switch located outside the country."

ViVOtech has announced that its NFC mobile payment wallet, Over-the-Air (OTA) provisioning, smart posters, coupon delivery and redemption technologies have been successfully deployed in Citi Tap and Pay, a pilot service that brings to India next-generation contactless credit card payments based on this emerging technology. Launched in July in the city of Bengaluru in India, Citi Tap and Pay is one of the world's largest and most comprehensive NFC mobile payment pilots.a READ MORE

India's Bharti Airtel has announced the launch of its m-Commerce service - 'mChek on Airtel´ on the voice platform. The new service provides secure use of voice (IVR) for m-Commerce transactions for all Airtel mobile customers. The mChek on Airtel service on voice will enable the 100-million-plus Airtel customers to pay Airtel mobile and fixed-line bills, recharge Airtel pre-paid and digitalTV accounts, recharge Delhi-Gurgaon expressway toll tags, pay insurance premiums, buy gifts, tickets and shop using their mobile phones. READ MORE

In February of this year, the Reserve Bank of India adopted new rules on credit and debit card transactions within India that became effective today, August 1, 2009. The rules require India's banks to support two basic capabilities:

• A system of providing for additional authentication/validation based on information not visible on the cards for all on-line card not present transactions (e.g., Verified by Visa or MasterCard SecureCode)
• A system that provides "Online Alerts" to the cardholder for all 'card not present' transactions of the value of Rs. 5,000 (about US$104) and above

Here's an example of one card issuer's approach (Barclaycard) to educating its cardholders. Note the Q&A: "Can I opt out of VBV? No, this is not optional. All online transactions will have to go through VBV process."

In an article in yesterday's edition, India's Economic Times reported that "bankers hail additional authentication for card purchases" - noting that "customers will have to register their cards from tomorrow onwards with the respective merchants--Visa or Master Card and create a security password." A followup article in tomorrow's edition of the Economic Times asks whether the new mandate goes far enough!

AcCells, a developer of contactless technology for the mobile phone industry and mChek, a provider of mobile payments in India and Sri Lanka, have announced what they're calling "a patent-pending breakthrough for Contactless Payments." According to the two companies, by "combining service initiation by AcCells mID and transaction authorization with the mChek SIM Toolkit, the solution presents a new level of user experience, transaction cost and efficiency. Most importantly the solution works with ALL existing mobile phones, does not require ANY change to infrastructure and platforms of Mobile Network Operators and/or Banking Infrastructure, and works in MNO-led or Bank-led environments." READ MORE

A report in today's Business Standard (India) titled "Consumers prefer debit cards in slowdown" notes that, according to data from the Reserve Bank of India, consumers are preferring to use debit cards over credit cards. In fact, the number of credit cards in circulation in India actually declined from 28.3 million cards a year ago to 24.6 million cards today.

India's ICICI Bank and Visa have announced a strategic relationship that will enable ICICI’s New York Branch to issue Visa Debit cards in the U.S. The bank will offer Visa Debit cards to its Global Indian Account and other checking account customers at its New York branch. The Global Indian Account service addresses the banking needs of Indians moving overseas who require access to local banking facilities in the United States. READ MORE

• India: Why bankers hate the credit card business

TSYS has announced that it has appointed Amit Sethi, a veteran of the global payments industry, as Managing Director of TSYS India and South Asia. He will be based in New Delhi and will be responsible for all business development and outsourcing activities in the region. India is the second fastest growing market for financial cards in the Asia-Pacific region. The country’s credit card base, pegged at 27 million in 2007, is growing at an annual rate of 30 to 35 percent, according to Euromonitor. READ MORE

The MobileStore, India’s largest telecom retailer, has announced it has partnered with PayMate to offer Point of Sale solutions (E-POS) across its 1,300 stores in over 200 cities that will allow customers to pay for their purchases, recharge talk-time and even buy or send gift vouchers instantly and securely via mobile. READ MORE

Global Payments Asia-Pacific Limited, a joint venture between The Hongkong and Shanghai Banking Corporation and U.S.-based Global Payments has introduced its Global HomeCurrencyPay service to merchants in India, following the earlier launch of this dynamic currency conversion service in China, Malaysia and Taiwan. READ MORE

Citibank N.A. has announced the launch of Citi Online Remit, a new online money transfer service to India.

Citi Online Remit provides Non Resident Indians (NRIs) the facility to transfer funds to India from any US Checking/Savings account or using a US Credit/Debit Card as a direct transfer into the beneficiary’s Bank account or as a draft couriered to the beneficiary’s mailing address in India.

Gemalto has announced a partnership with India-based technology partner mChek to bolster the range and choice of secured mobile banking solutions available on Gemalto SIM cards to markets in South Asia. READ MORE

As evidence that mobile payments adoption is really happening in India, Bharti Airtel has announced that more than one million users have registered for the mChek on Airtel service since its commercial launch in June 2008.

“Consumer adoption and repeat usage of the service has been extremely encouraging”, said Sanjay Swamy, CEO of mChek. “With the Reserve Bank of India’s mobile payments guidelines now in place, banks and merchants are fast adopting our open-platform to build a thriving eco-system, and a compelling suite of services for consumers.” READ MORE

India's mChek, a mobile payments and security company, has developed mobile banking and payments technology that it is applying to microfinance applications and mass banking in a pilot with Grameen Koota, a microfinance institution in India. In a series of videos, mChek introduces the service, demonstrates how it works and shares some initial results.

If you're interested in learning more about mChek's pilot results and its work with the bottom of the economic pyramid, contact Valerie Rozycki at Valerie@mchek.com. READ MORE

In an article titled "Card processing work to shift to India", India's Business Standard reports on India Pay, a new payment system planned to start next year.

Sources said over the next four to five years, processing of credit card transactions, which is so far done abroad will shift to India. Sources at the Indian Banks’ Association ... said that India Pay will handle all domestic transactions while it will work with payment networks like Visa and MasterCard for international transactions undertaken by Indian cardholders or foreigners on visit to the country."

The article also mentions National Payment Corporation of India, a new company established by nine banks to focus on "electronics payments, ATM transactions and processing of card payments."

[Editor's note: We'd love to learn more about these payment card processing initiatives in India. If you can share details, please contact me directly.]

mChek has announced it has been certified as compliant with the latest Payment Card Industry, Data Security Standard 1.2. mChek believes it is "one of the first payment products globally to be certified as PCI DSS 1.2 compliant." READ MORE

The Reserve Bank of India has updated its "Mobile Banking transactions in India - Operative Guidelines for Banks". The guidelines, relatively conservative in tone, constrain the size (both per transaction and per day) of mobile banking transactions and limit service providers to banks.

Here are commentaries from The FInancial Express - "Mobile banking may cost you dear" and The Economic TImes - "RBI lays down norms for mobile banking".

Just for fun, here's a word cloud from the guidelines (created using Wordle):

In a multi-part series, Sramana Mitra interviews mChek CEO Sanjay Swamy about his company's mobile banking and payments platform in India. Swamy comments: "It is very important to ensure there is a means of instant gratification. It may not expose you to all of the features and capabilities, but at least the customer can touch it now. That is what we had to do. We had to simplify the product and get it out there."

India's Business Standard reports that the Reserve Bank of India has asked banks "to keep their mobile payment services on hold till it issues final guidelines for such transactions." The RBI is in the midst of finalizing its Operative Guidelines for banks on mobile payments. It recently posted a draft of the guidelines and solicited comments. According to today's RBI notice, "While RBI has no objection for use of mobile channel to provide basic services such as mobile alerts for credit or debit entry, balance enquiry etc. which are in the nature of providing information, due care needs to be taken for permitting the channel for customers to initiate payment instructions."

In India, Oxigen Services Pvt Ltd has announced OxiCash - described as "a prepaid stored value wallet accessible through the mobile or PC allowing users to make payments for a host of services such as prepaid mobile & TV recharges, telephone bill payments, travel services, e-commerce sites, mobile videos, music, games and other utility/insurance bill payments." READ MORE

Satyam Computer Services has announced that it has entered into an alliance with Tyfone, a provider of mobile financial services, infrastructure and mobile payments capabilities to collaborate "to provide businesses with an even greater edge when competing in the mobile financial services sector. The alliance combines Satyam's deep domain expertise and system integration experience with Tyfone's complete mobile financial services infrastructure, and will provide institutions with enhanced solutions and technology." READ MORE

Mukul Singhal blogs about the Reserve Bank of India's recent issuance of draft guidelines for mobile banking and payments in India. He also links to a useful paper by Mahil Carr titled "Mobile Payment Systems and Services: An Introduction" .

The Reserve Bank of India has published a "Draft Operating Guidelines for Mobile Payments in India".

"With the rapid growth in the number of mobile phone subscribers in India banks have been exploring the feasibility of using mobile phones as an alternative channel of delivery of banking services. A few banks have started offering information based services like balance enquiry, stop payment instruction of cheques, record of last five transactions, location of nearest ATM/branch etc. Acceptance of transfer of funds instruction for credit to beneficiaries of same/or another bank in favour of pre-registered beneficiaries have also commenced in a few banks. Considering that the technology is relatively new and due care needs to be taken on security of financial transactions, the Reserve Bank of India has felt the need for a set of operating guidelines that can be adopted by banks. "

Read more about the new mobile banking guidelines in this article in India's Economic Times.

PayMate India has announced the closing a $9 million second round financing led by Mayfield Fund with participation from existing investors Kleiner Perkins Caufield & Buyers and Sherpalo Ventures. READ MORE

MSN India reports on mobile wallets and payments in India saying that "current payment players in India are mChek, Obopay and PayMate." The article notes that the Reserve Bank of India is currently formulating the regulatory guidelines for mobile payments with the final draft expected by June 2008.

In an article titled "RBI to regulate MasterCard, Visa and Western Union", India's Economic Times reports on a draft proposal posted to the Reserve Bank of India's website today implementing provisions of India's Payment and Settlement Systems Act of 2007 that would require "every person desirous of commencing or carrying on a payment system ... [to] submit an application to the Reserve Bank for authorization." READ MORE

India's PayMate has announced it is expanding the reach of GiftMate, its mobile gift voucher program, 'to non-resident Indians in North America who can now send GiftMate mobile gift vouchers to their friends and family, anywhere in India.'

Airtel has announced the launch of range of Mobile Commerce solutions including Mobile Money Transfer (MMT), Postpaid Bill Payment and Prepaid Recharge on the mobile phone. Airtel is partnering with ICICI bank, HDFC bank, SBI, Corporation bank and VISA to enable these payments using a solution that has been developed by mChek.

In an article titled 'Villagers across 12 states to benefit from mobile banking', Leslie D`Monte writes for India's Business Standard about mobile banking and how government is helping increase adoption.