Asia is booming, and its India and China which are fueling its growth. During recession we are expecting our economy growth to touch at least 6%. Jobs have started coming back in market. A time when people in other countries are shifting from sedans to hatchbacks, Audi, BMW and RR are recording 100% growth in India.
CEO’s feel it’s foolish not to be in Asia at this time. The Elephant and the Dragon are back with vengeance. Home grown CEO’s are the kings now, we run world cricket market, Manchester united is looking for some Indian sponsor, F1 has a new fan club now… and we see all this during the time when the whole world is witnessing recession. This is known as Elephant walk. No patriotic person would love to see end of this period.
But the anti-national elements keep working on their mission to destabilize our growth plans and hinder our economy. The one of easiest way to hamper a country’s economy is by circulating fake currency in the market. There have many cases where our intelligence teams have reported such events in the country. We do keep inventing and implementing methods to identify fake currency, but is it really easy to identify a fake note in a bundle of notes? How can we curb this currency counterfeiting? How can we ensure our economies progress? How can we use technology to make it happen?
There was a time when our great grandparents transacted by exchanging goods in a barter system. This I feel was the safest way of transacting, as the products in exchange had its own value. A currency note has its own underlying value according to the gold reserved against it (or crude oil in case of US Dollar). But a fake note with zero underlying value can destruct the whole finance model of a country. We have tried handling these issues by developing machines which can identify fake notes, but is there a way we can curb this issue right from its roots?
Don’t you think that plastic money has helped in controlling it to certain extent? Is plastic money all about making our life easy or can this be used in helping our nation to fight anti-national activities? Imagine if we can minimize the use of actual currency, by paying from our card for almost all our transactions, and Merchant collects the Original currency from the bank (assuming banks will provide verified notes to the consumer).
But then it’s really difficult and inconvenient to swipe your visa card every time you shop or eat or travel.
Technology in Rescue…
Technology is all about making our day to day life easy and secured. We use credit/debit card just to avoid transaction with cash. Now let’s everybody start using innovative CashCard to help our nation grow strong and robust and at the same it will ease our life too.
CashCard is similar to our credit/debit card but the difference lies in the content of the card. This card ‘stores’ the amount; hence has a value of its own. We will be able to use this card on POS which will not be connected to any Mainframe network. How can technology help in making POS reach every corner of the world? How can everybody start using CashCard for transaction? Do we always need a phone/internet cable to make a transaction via card? Not really. A custom POS machine can do this for us. The job of this POS machine is to read the data present in a CashCard and deduct the amount charged from the card. At the end of the whole process, POS saves the amount in its removable data card. The amount present in the data card of POS is the total revenue generated at the end of the day.
At the end of the day or week, Merchant submits this memory card to the closest bank branch or any authorized outlet to collect his cash without any charges. Yes there shouldn’t be charges for a redeeming the data card, which is promoting safe and secure transaction. Charging small merchants for petty transaction can hamper the growth of this technology.
So all we need in a CashCard reader machine (A simpler version of POS) is memory card reader and a memory card, which should make the cost of this POS really affordable. The advancement in technology and business model used will make it cost effective, so that every small transaction will be feasible through POS. Making the POS wireless or for that matter away from any kind of network will make it feasible to be carried in public transport and remote areas too.
The CashCard will contain the amount you hold in it and your security PIN. The first time we are issued this card by bank, we will be asked to select the PIN we need as protection password. The PIN is actually saved in the card itself in an encrypted format. The moment we swipe/insert this card in a POS, the machine will read the amount present in the CashCard once you enter the correct PIN. This is something similar to viewing images from the data card of your Digital camera. The numbers present in the card will represent the amount in it and the special characters will represent PIN. When we enter PIN, software present in the POS will convert the punched in numbers to an encrypted format which will tallied with the special char in the card, hence authenticating your card without being in the network. Next you enter the amount you need to pay for transaction, which will be added to the data card of POS and deducted from your CashCard. Ultimately the POS owner can get his memory card redeemed either in an ATM or the closest bank available. This will complete the whole transaction. Your card itself acts as the server for this technology. When you are out of cash in your CashCard, all you need to do is go to an ATM and recharge your card with the cash present in your saving/current account. The card can also be recharged online or by using your mobile banking feature.
Imagine the comfort achieved through this, no more fights in fetching the right change to pay-off your bills, no worries of losing your cash as the card is PIN protected, all the features which we get from our debit/credit card today can be incorporated in this card in a much secure manner and certainly we will be able to cut down on forfeiting of currency.
Advantages of this Technology:
There are many advantages of this technology apart from safeguarding our currency. VAT, which was levied some time back will be more transparent now. As the POS will be issued to a merchant based UID or PAN card. Hence government. can keep track of the revenue generated by a person during a particular year. Collecting taxes will be easier.
Advantages of this technology can be immense, not only in urban location but in rural areas too. We can use these cards to buy our movie/bus/train tickets on the move; in fact paying to our closest grocery/ auto rickshaw fare via card is best comfort I can think of. In rural areas, where as a result of Financial Exclusion the penetration of banking services is almost negligible; this CashCard can make a big difference for the poor. Farmers can get their loan amount in this card and can pay for their medical, insurance and other expenses using this card itself in an ATM, while they can keep their saving account in a distant city branch. All banks needs to do push Financial Inclusion by either opening small outlets/ATMs in remote areas which will provide recharging and other banking facilities using this technology.
Certainly we cannot replace the use of hard currency, but by incorporating currency detector within ATMs it can be controlled.
Business Model for the Bank:
If banks charge a small annual maintenance/issuance fee to customer, it should suffice the expenses made by bank in implementing this technology. The revenue generated by these annual charges in long term can certainly be of decent profit for the banks.
To make our economy robust, we need to curb currency forfeiting. Technology can contribute to this by innovative CashCard and customized POS. This will make transactions safe and comfortable.