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PERSPECTIVES ON DIGITAL CURRENCY

Nov 19, 2010

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India – Bringing Banking to the Un-banked

Currently in India, the vast majority of many residents simply do not have access to basic banking services. One of the greatest challenges for the government is ensuring that all of its citizens are able to access these services—the concept of financial inclusion is a key focus and fundamental principle of the Indian government. It helps facilitate economic growth, it allows the un-banked for the first time—in many instances—to be able to effectively save, access credit, efficiently pay for goods and services (as well, in the case of merchants to be paid),  and it offers the added benefit of reducing fraud and increasing tax revenue.


One of the great services that Visa can bring to India, and other developing economies, is the ability to provide a highly efficient payments system to the wider population. One of the key programs that I am particularly excited to be involved in is delivering banking services to millions of un-banked Indians, as seen in the press release from November 11th.

Currently, the Indian government is issuing unique identification numbers to its residents and plans to register 600 million people in the next four years, with 100 million in the first year.

Once a resident has been issued with this unique number—which is linked to his or her biometric data (which is collected at the same time)—a bank can automatically issue a Visa physical or virtual payment card. To assist in this process, we have modified our systems to incorporate both our traditional payments model with the ability to process this biometric data and the identification number.

This unique system brings many benefits. It allows the un-banked easy and convenient access to government benefits; allows for the better management of funds by reducing the risks and costs associated with cash; provides basic banking services, such as access to ATMs; allows individuals to pay for goods via their Visa card; enables individuals to remit money to families and friends around the world;  and it provides the convenience to be able to book train tickets and pay for utility bills (something that should not be underestimated in India).

This is a great program and one that I am personally very proud to be involved in. It is also a great example of how Visa can work with government to provide a real and tangible benefit to society.

Posted by: Uttam Nayak, Group Country Manager, Visa Inc. on November 19, 2010 at 9:24 am