Behind The Tech: NPCI And RuPay’s Common Mobility Card Explained

Payment processing giant Visa announced that they are compliant with the standards mentioned for supporting the National Common Mobility Cards. This is the latest development in the forward movement of the Interoperable Fare Management System. The card is set to redefine payment for public transport systems in the Indian subcontinent. Indians are looking at a revolution in public transport and retail ease of access, at the cutting-edge of digital payments.

History Of The IFMS

In late 2010, the Indian government envisioned a scheme wherein seamless access could be granted to public transport networks. The system, which later came to be known as IMFS, aimed to let passengers to pay across different public transport systems using one system. This was created as an effort to bring together the public transport system of the country under one umbrella. By making it accessible to every individual in every city, the government aimed to increase ease of access for public transport. The project is also structured in such a way so as to include customers across a wide variety of socio-economic strata. An additional focus was also put on reducing the transaction time to the minimum, so as to make the payment experience as seamless as possible. It is also structured in such a way so as to reduce the financial risk to the stakeholders involved in the effort. It is designated as an EMV-based Open Loop Payments system.

Benefits For Everyone Involved

The project is under the purview of the Ministry of Urban Development, with the vision "One Card for all payments". With this theme, the card needed to be accepted across multiple verticals. It then made sense to take up a card which is gaining a significant amount of adoption in the contactless payment space.  RuPay, developed by the NPCI, has a focus on low value electronic payments and was developed as an incentive to switch away from cash. This platform offers benefits to almost everyone involved. For the public transport operators, they will have a higher degree of accountability for the ticketing process. It will also unite payments without the need for too much additional infrastructure to be built. Moreover, a common fare payment standard across the country also offers the benefit of economies of scale for the operators. By bringing a similar system across operators, information can be shared and common infrastructure can be developed. It also offers great ease of use among consumers, as it can be issued instantly and used offline. Without the need for online authentication, it easily serves as a substitute for cash; similar to a prepaid card. Moreover, Visa has also stepped forward to aid the effort with their next-gen account-based ticketing models. This will allow consumers to ride using their existing Visa cards, thus removing the need for a new card to be issued without sacrificing on any other features. The NCMC also extends beyond transit, with the view also being to accept it for retail payments. The list of verticals includes cabs, metro, retail shops, restaurants, retail outlets, ATM withdrawals, parking, tolls and buses. The card is optimized for merchant payments with the RuPay network, and Visa cards will also supplement the effort greatly with its vast merchant network. TR Ramachandran, Group Country Manager, India and South Asia at Visa said,

"NCMC contactless cards will trigger rapid adoption of digital payments across transit use cases. Besides being cost effective vis-à-vis cash, it will also help improve the efficiency and scale of public transit systems in the country."

How The NCMC Works

The RuPay Contactless card has 3 specific areas on it, each designated as service areas. Each area has a specific 'service ID' that refers to it, with these IDs being written on each area post the issuance of the card. In these areas, service operators such as public transport offices, retail shops, toll booths and buses can write their programs. Each area will be protected by a unique service key that protects it from tampering by external parties. The card will be at the basis of all NCMC activities, and will also have the capability of processing offline payments. This is where the balance is stored on the card itself, allowing for a much faster experience. The card can be topped up online using a debit card, Internet banking, or UPI or by using cash at a service point. The card also provides benefits for the financial institutions involved in the party. According to the NPCI,

“Since the transaction is permitted against available balance, there is no risk of any loss either to the bank or the SRTU.”

The various parties involved in the process also need to flesh out backend operations and scale their infrastructure. Those that are in charge of the in-house fare collection management must deploy the backend for automatic fare collection. Moreover, they must also procure e-ticketing machines that are compliant with the new card. There is also a general move forward towards converting closed-loop fare payment systems into an open-loop system. The new system will involve multiple banks to issue the card, making it truly accessible to every consumer. There is also the possibility of the cards being issued instantly at service delivery points, so as to allow the card to be used as a short-term option. Overall, the system is set to redefine the way retail and transport payments are made, with a long-term vision to replace cash for every day activities.