Chennai (India), April 09, 2014:
Polaris Financial Technology recently announced the launch of its NACH-ready India Payments solution. The solution is compliant with major payments systems in the country including National Automated Clearing House(NACH), Next-Generation Real Time Gross Settlement(NG-RTGS) and National Electronic Funds Transfer System (NEFT).
K Srinivasan, Executive Vice President, Growth Markets India & Subcontinent, Middle East, Africa (IMEA) shares with Information Week, the impact he foresees on the ecosystem, and the opportunities for the newly launched solution
What was the rationale behind NPCI’s strategic decision to consolidate multiple Electronic Clearing Systems (ECS)? How will this impact the ecosystem and what do you envisage are the major benefits?
ECS systems are all regional where the settlements or consolidation happen on T+1 basis. Issues with respect to collections, returns, fraud still remain. NEFT was the first step towards centralization and NACH is a logical better extension and for the first time adhering to Global Standards using the ISO 20022 Format for domestic payments. NPCI has done an incredible job in establishing itself as a Pan India payment organisation. NACH initiative is the equivalent of BankServ, South Africa or the Faster payments initiative of UK. NACH's central mandate management extends its coverage to 82,000+ bank branches across India, provides a unique mandate reference number which is maintained throughout the transaction's life cycle, accelerated on boarding of billers within 48 hours and same day settlement. It is all about bank customers having access to funds near real time, the process getting more efficient and quick. Mandates will be more accessible and managed at a centralised level; there will be better control on the maturity dates, no. of installments that can be exercised etc. NACH will ensure that returns are reduced and so also the disputes regarding debit of customer accounts post or pre maturity dates. With reference to an ecosystem creation, banks can actually custom design products to address the specific needs of their corporate customers.
You have said that Polaris’ India Payment solution is compliant with major payments systems in the country? Can you briefly explain who are your key target customers and how will this solution help them?
Polaris' INTELLECT NACH-ready Payments Services Hub is arguably the only solution that is compliant with NG-RTGS, NEFT & NACH. In terms of coverage it extends to Bank Branches, Back Offices, Customer Case and Channels initiated by Customers. The service offers its customers a complete transaction life cycle management on a single platform, supporting mandate management, payments and collections. The comprehensive solution integrates mandate management as part of the transaction processing life cycle, geared towards a Long Term investment. The solution is bench marked to process 64 million transactions.
There is no solution of this kind in the market and hence we are launching this formally in Mumbai this week. Few banks have shown interest in the solution as it addresses their requirement in totality and our offering is not a short term fix. It is about enabling banks to make their payments business viable and differentiated
Can you give us a brief overview of how NACH unlocks India’s potential in the payment ecosystem
NACH will create a fully automated process with the use of open standards and best industry practices. This will provide a single set of best practices and standards across all the participants in the ecosystem and support financial inclusion policies initiated by the government like support for Aadhar-based transactions.
Polaris’ NACH Payment service introduces a new dimension of effective e-collections that span utility bill payments and collections. It leverages on a pan-India footprint and is expected to cover the entire core banking enabled bank branches throughout the country irrespective of the location of a bank branch. It is a web-based solution for banks & financial institutions to facilitate bulk electronic transactions for utility payments and collections consolidates multiple ECS systems to provide a pan-India coverage thus removing regional barriers.