Transaction ProcessingAMEERUL HASAN

COMPANY PURPOSE Card AcquiringTransaction Processing ATM Deployement & Cash ManagementMicrofinancingAadhaar Card based benefits tarnsfer No frill account Opening Fino based activities

Card Acquiring, Transaction Processing and Printing

TRANSACTION PROCESSING

Step 1• Authorizatio

n • Process

Step 2• Clearing • Process

Step 3• Settlement • Process

It’s a 3 Steps Process

STEP 1 AUTHORIZATION PROCESS

STEP 2 CLEARING PROCESS

STEP 3 SETTELMENT PROCESS

We estimate the cost of setting up the financial transaction processing switch to be Rs 800 Lacs.

We propose to setup financial processing switch at Mumbai Financial transaction processing switch is a financial message routing

system that authorises an ATM to perform atransaction. The financial transaction processing switch connects the ATM to the bank’s banking software to enableauthorisation of a withdrawal transaction and also to check balances, statements and other transactions on the ATM.

The financial transaction processing switch also connects to other banks’ similar financial transaction processing switch to process transaction of customers of other banks, performed on the host bank’s ATM.

The financial transaction switch is also used to authorise point of sale transaction.

ATM DEPLOYEMENT

ATM Installation Forecast

INSTALLATION TILL DATE

Sr. Name of the Bank Branches ATMsNo.   Rural Semi-

UrbanUrban Metrop

olitan-Total On-site Off-site Total

  Scheduled Commercial Banks

23,776

22,468

17,878

17,118

81,240

47,545

48,141

95,68

6   Public Sector Banks

22,188

17,773

14,248

13,257

67,466

34,012

24,181

58,193

  Nationalised Banks 15,606

12,154

10,744

10,132

48,636

18,277

12,773

31,05

0

Industry Overview

The first ATM’s were introduced into India by banks, also known as deployers, in 1988

However, the introduction of the first shared ATM cash network in 1997 changed the face of the industry

Cash networks allowed retail customers of individual networked banks to use an ATM of another bank

Between 1997 and 1998, ATM deployment grew at a rate of 160% and numbers almost doubled year-on-year in absolute terms

factors driving future growth

• The unabated increase in cash transactions• Reduced costs of delivering services to customers and increased

number of branches• The increasing functionality of the ATM• Evolution of offsite installations• Improvements in communications and IT• Conducive Regulatory Environment• The role of the Semi–Autonomous Independent ATM Deployer

(IAD)• Replacement cycle

2005RBI introduced

regulationstipulating that

banksmust seek

annualapproval for their threeyear ATM

deploymentplans

2008-09The eligibility

norms foropening up of

onsiteATMs wereliberalized.

April 2009Cash withdrawal

fromAutomated

TellerMachines

(ATMs) of thebanks was

made free ofcharge

June 2009RBI permitted

SCBs toinstall Off-site

ATMs atcenters/places

identifiedby them,

without havingthe need to take

permission

Overview of the Indian Retail sector

India's retail market is expected to be worth about US$ 410 billion, with 5 per cent of sales through organized retail, meaning that the opportunity in India remains immense.

Retail should continue to grow rapidly—up to US$ 535 billion in 2013, with 10 per cent coming from organised retail,

Reflecting a fast-growing middle class, demanding higher quality shopping environments and stronger brands

Around 23 million Adhaar cards linked to bank accounts: Nandan Nilekani ... About 23 million Adhaar cards have been linked to bank accounts of the users so far and the number is expected to swell to 100 million in the next few months, Unique Identification Authority of India (UIDAI) Chairman Nandan Nilekani said. 600 million Aadhaar card by 2014

Key facts

FINO CASE STUDY

KISAN CREDIT CARD

AADHAAR LINK DEBIT CARD

Canara Bank has launched ‘Aadhaar Samruddhi Card’, an innovative Debit Card for customers who have Aadhaar number seeded in their accouns, during the 3742nd branch opening occasion at Mysore district. The card can be used at alternative channels like ATM, POS machine, with Rupay logo. This is an exam-ple of the use of Aadhaar, for getting the payment through Micro ATMs by bio-metrics authentication.

MARKET DATA

National Financial Switch (NFS), the flagship product of NPCI, has made a history by recording

the highest approved volume of transactions with crossing 210 million mark in July, springing the total transactions to over 240 million.

The voluminous growth in NFS business, largely contributed by member banks, has made the distinction of achieving four times of the total number of member banks to 182 from mere 37 three years back.

NFS, which is the largest domestic ATM network today, is fast emerging as world’s best ATM network that is backed by superior technology, operational excellence and unstinted support from member banks.

The breakup of the estimated cost for setting up and deploying an ATMParticulars Unit Cost per Unit (Rs) Total Cost

(Rs)Cost of ATM 1 3,58,294.75 3,58,294.75License fee to be paid to Axis Bank

1 2,50,000.00 2,50,000.00

Total implementationservices

1 1,15,506.00 1,15,506.00

UPS 1 37,806.00 37,806.00VSAT 1 50,861.00 50,861.00Transportation Cost 1 8,000.00 8,000.00

Installation Cost 1 2,500.00 2,500.00TOTAL 8,22,967.75

The breakup of the estimated cost for setting up currency management branch offices

Particulars No of Units Cost per Unit (Rs inLacs)

Total Cost (Rs in Lacs)

Deposit 1 25.00 25.00Civil / Carpentry 1 26.07 26.07Electrical Fittings 1 8.16 8.16Cash Van 10 4.99 49.99Fabrication cost forVAN

10 1.25 12.50

Architect Cost 1 2.25 2.25Vault 15.26 15.26Camera Solution 15 0.17 4.25TOTAL 143.36

The role of the Semi–Autonomous Independent ATM Deployer (IAD):

The opening of ATM licenses by RBI has resulted in the birth of a new business avenue where an independent ATM deployer (IAD),installs, maintains and manages the ATM and its site for a bank (Partner Bank) using the partner Bank’s ATM license.

The business model works on transaction based pricing. Transaction can be of two types.Bank cards on banks ATMs and other banks cards on the Bank’s ATM .

Deployer charges the issuing bank Rs 18 for withdrawal and Rs 4 for Balance Inquiry

Opportunities

The opening of RBI licenses for off-site ATMs opened up a new business opportunity- that of semi-autonomous

IAD. We believe we are uniquely positioned to grab this opportunity and other IAD services like installation, maintenance, site build, site identification, cash replenishment, monitoring, vendor management, facility management, software support and help desk. Within 6 months of becoming a semiautonomous

The semi-autonomous IAD business is based on transaction revenues and hence the locations of ATMs are important. We believe retail stores, malls and petroleum outlets are high transaction locations for ATMs. We intend to leverage our existing relationships in retail and petroleum segment for tapping the desired ATM sites for our semi-autonomous IAD business.