India’s vision to become a less-cash society is realistic: Visa India

Dataquest spoke to T R Ramachandran, Group Country Manager, Visa India & South Asia to understand how VISA plans to enhance its reach in the Indian market where digital payments are under spotlight due the demonetization drive.

Q. Do you think that the vision to make India cashless economy is possible?

tr-ramachandran-group-country-manager-india-south-asia-at-visaTR Ramachandran- Group Country Manager -India & South Asia at Visa

The vision of Digital India, the flagship program of the Government of India, is to promote digital banking to spur financial inclusion at scale. We think, India is at an inflection point in its payment digitization journey. Innovations in form factors, technology, and measures like the Bharat Bill Payment System, Payments and Small Finance Banks are all building blocks of a less-cash society helping realize this vision.

Together, with a series of interventions by the Government of India, these building blocks could accelerate the pace and scale of digitization. To transform the country into a digital nation, we all need to collectively take relevant measures to transition to a less-cash society. Achieving this goal would not only help reduce the size of the shadow economy in the country, but also lead to a significant increase in jobs.

India’s vision to become a less-cash society is definitely realistic. However, in order to achieve this lofty ambition, we need to grow the acceptance infrastructure, energize the innovation ecosystem, and encourage adoption of new products, technologies, and platforms to bolster financial participation.

Q. How can various stakeholders (government, businesses, banks, etc) of the economy adopt a technology framework that is scalable and secure for cashless transactions?

With India witnessing a steady shift from cash to a cashless social fabric, the success or failure will depend on the capability of the eco-system to collaborate and innovate secure framework. To harness benefits of digital transformation, such as inclusive and sustainable growth, improved governance, and responsive service delivery, we must work together to improve access, convenience, security and interoperability.

As the Internet of Things (IoT) continues to grow, it is changing the way we live, shop and pay by moving data and the point-of-sale to wherever the consumer wants it to be. Globally, we are driving collaboration to bring the point-of-sale everywhere by allowing businesses to introduce secure payment experiences quickly to any connected device. By 2020, IoT will consist of more than 20.4 billion devices, including phones, wearables, appliances, cars, homes, cities – each device being a potential way to pay.

Digital transformation is not a technological fix, a one-off plan, or a one-size-fits-all strategy. This is rooted in a shared vision and belief that we can securely embed payments and commerce into any device—from a watch to a ring to an appliance or a car. Its ultimate objective is to harness the global digital revolution to meet a country’s specific socio-economic priorities driven by leadership, innovation, and partnerships among government, business, and civil society.

Q. What are the security shields required to make digital transactions safer in India particularly in the light of a recent incident when the info of 3.5 million debit cards was leaked in India?

As India fast adopts digital transformation, we need to take a comprehensive approach to security that relies on multiple layers of technology, analytics, security practices, standards and PCI compliance to help protect the payment system and reduce fraud. This will not only help drive everyday innovation but also ensure security is embedded in everything we do to transform India into a hotbed of innovation.

Payment ecosystem must work towards protecting data systems from cyber threats and shield sensitive payment data from compromise. Encryption, tokenization, biometrics are critical tools in securing data in transit. Devaluing sensitive payment transaction data will ensure that stored information can’t be used to commit fraud, reducing the incentive for criminals to hack into systems. Investing in predictive analytics and insights will help prevent fraudulent activity even before it happens.

It is vital to empower consumers because those actively monitoring their accounts are less impacted by fraud. We provide tools like consumer transaction controls to cardholders of participating financial institutions so they can be a part of the solution. We must innovate, collaborate and co-create to secure our connected world. It is important that we protect data, devalue data, harness data and most importantly empower consumers. We are constantly striving towards evolving a smarter world.

Q. What is Tokenization System from Visa? What does it boast to do and at what cost?

The Visa Token Service (VTS), a novel security technology from Visa, replaces sensitive account information, such as the 16-digit primary account number, with a unique digital identifier called a token. The token allows payments to be processed without exposing actual account details that could potentially be compromised. Issuers, merchants, and wallet providers can deliver secure mobile payment applications, gain access to third-party digital payment experiences, or securely maintain cards on file in order to offer their customers safe ways to shop online and with mobile devices.

This provides the payment ecosystem with a flexible and scalable way to securely provision and manage digital credentials/tokens across remote (e-Commerce and m-Commerce) and mobile contactless form factors. In order for payment tokens to provide improved protection against misuse, the token is limited to use in a specific domain, such as token requester, mobile device, merchant, transaction type, or channel. These capabilities are made available and complemented through a common set of Visa APIs.

While speed and ease of use are the major advantages of mobile payments over cash, payment security plays a crucial role in ensuring that the consumers feel confident when they reach for their phones to pay. This is where Visa Token Service adds value to the mobile payments experience by protecting consumers’ payment data during transactions. We will continue to work with merchants to integrate tokens with Visa Checkout, Visa’s wallet service, and tokenize card-on-files to deliver a seamless experience.

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