India Post, the country’s post office, is
awaiting regulatory approval for a nationwide prepaid card-based
remittance system.
According to someone familiar with the plan,
IndiaPost wants to offer MasterCard-branded prepaid cards to speed
up its remittance services at more than 155,000 branches across
India.
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The programme will be administered by three
banks, HSBC, ICICI and IDBI. Atos-owned Indian processor Venture
Infotek will provide processing services.
The remittance card product is aimed at
India’s internal money transfer market, valued in gross dollar
volume at $2.2 billion per year. A significant portion of the
population in India’s major cities – Mumbai, Delhi, Bangalore,
Kolkata and Chennai – have moved from rural areas to urban centres
to find better paid jobs.
These workers use the post office’s existing
programme to remit funds back to families in rural areas – but the
process is administered manually in branches and can take up to 10
days for funds to clear.
When up-and-running, the MasterCard-branded
prepaid card scheme should allow funds to be transferred from
cities to rural areas on a same day or next day basis. Users of the
service will be issued two cards – a parent and beneficiary card –
one of which is kept with the remitter and the other sent to the
recipient.
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By GlobalDataBoth cards will be fully functional open-loop
prepaid cards, allowing ATM withdrawals at bank and post office
branches and point of sale spending. They can be loaded at India
Post branches.
Three pilot programmes are to be launched for
the service initially, with India divided into three zones. HSBC
will administer the programme with the post office in the west of
the country – including India’s main business city Mumbai. ICICI,
India’s largest private sector bank, will run the scheme with post
offices in the south of the country. State-owned IDBI Bank will run
the programme in the north and east.
The banks will provide settlement and
administration services with MasterCard and will also retain the
float – funds loaded onto the cards that have not been spent – an
important source of prepaid card revenue.
“Currently India Post is rolling the programme
with three banks,” said the source.
“There are three banks participating, HSBC,
ICICI, IDBI Bank. These three banks are participating and they are
piloting the project with around 10,000 post offices to begin
with.
