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Centralised System of Records – A New Compliance Tool

Today, banks issue various prepaid instruments like prepaid cards, digital wallets, gift cards, fastags, etc. that are mandated to comply with certain regulations, as prescribed by the regulator in its master directions. At the same time, regulated entities carry out remittances, issue forex, international debit and international credit cards governed by tax laws. Any issuer providing multiple types of instruments, or partnering with multiple technology service providers is expected to follow these regulations and laws. The prepaid instrument regulations are meant to monitor/manage the level of prepaid instrument loading and usage at an individual customer level. The tax laws focus on collecting tax at source (TCS). These compliances demand a centralised repository that takes care of the following:

Uniquely identifying the customer and rolling up based on personally identifiable information (PII) sought from the customer at the time of onboarding.

Classifying customers based on their risk-profile categorisation.

Maintaining personalised limits at the customer level.

Controlling loading and usage at the issuer level.

Intimating the Bank / Regulated Entity on TCS applicability and rates.

This is precisely what the Centralised System of Records or C-SOR offers. A centralised System of Records (C-SOR) is a centrally managed repository that maintains customer-level records for a range of instruments issued by technology service providers (TSP) on behalf of the issuer. All customer actions undertaken by the TSP are sent to C-SOR for verification and validation. This means that only C-SOR-validated customer actions are treated as valid. Given below are a few scenarios that illustrate how the Centralised System of Records could be used by issuers in the context of various businesses they undertake.

Prepaid Cards: Bank and Non-bank PPI issuers issue prepaid cards through multiple TSPs. To maintain the balances and daily/monthly/yearly transactions allowed across transaction types and KYC types, be it full KYC or small PPI, the issuing entity should be employing a centralised system of records. For instance, a customer who was onboarded via both TSP1 and TSP2 will be identified as a single customer in the C-SOR system and the usage data should be managed accordingly.

Payments Bank: Payments Bank Savings Account balances plus balances contained in PPI or other internal wallets should not cross 2 Lakh INR at EOD. The differential should be swept into its partner Scheduled Commercial Bank’s deposit account. CSOR makes sure that the aggregate balance across applicable instruments doesn’t cross the prescribed limit.

LRS Limit Maintenance: Limits under the Liberalised Remittance Scheme (250,000 USD in a fiscal year) can be maintained by the C-SOR based on usage across instruments like Credit Cards, Debit Cards, Remittance Accounts and Forex Cards. The issuer can also be notified about usage that affects the TCS charged at a customer level.

CARD91 has built a robust centralised system of records as an API-led solution which lets issuers monitor its registered customers on a real-time basis. For more information, please reach out to sales@card91.io.

Written by Praveen Varghese, Product Manager, CARD91.

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Unlocking the Power of Reward Loyalty Programs in Credit Cards: Enhancing Value-added Services

In today’s fast-paced world, credit cards have become an integral part of our financial landscape, offering convenience, security, and flexibility for seamless transactions both online and offline. However, credit cards go beyond mere payments, providing a range of value-added services that enhance the overall user experience. One such service gaining prominence is the Reward Loyalty Program.

 

Reward Loyalty Programs incentivize cardholders for their spending habits and loyalty to a particular credit card issuer. These programs offer various benefits, including differential reward points, closed-loop EMI programs, meta-data engines, and cardholder-defined actions, significantly enhancing the cardholder’s experience.

 

Differential Rewards Points:

A key feature of Reward Loyalty Programs is the differential rewards points system, allowing credit card issuers to offer rewards based on cardholders’ spending patterns. This feature goes beyond Merchant Category Codes (MCC) or Transaction Identification (TID), allowing customization based on parameters such as pin code, duration, or specific MCC for particular dates. For instance, cardholders may receive 5x reward points during special occasions like birthdays or wedding anniversaries, adding a personalized touch to the rewards program.

 

Meta Data Engine:

The Meta Data Engine enhances portfolio management for credit card issuers by efficiently processing vast amounts of data for better decision-making. This tool empowers portfolio and product teams to collaborate effectively, enabling them to identify new opportunities and convert potential customers into cardholders.

 

Card Holder Defined Actions:

The Card Holder Defined Actions feature empowers cardholders to take various actions through mobile applications, such as increasing credit limits or using reward points as per their preferences. Integration with aggregator EUROP Assistance enables cardholders to redeem rewards across various industries and companies, enhancing flexibility and utility.

 

In conclusion, Reward Loyalty Programs in credit cards offer a holistic approach to enhancing the cardholder experience, particularly appealing to the millennial demographic. By offering personalized rewards, affordability through EMI options, efficient data management, and user-defined actions, credit card issuers can differentiate themselves and add significant value to their customers’ financial journeys, aligning with the evolving preferences of the millennial generation.

 

Authored by Deepak Bhatt, Director of Sales at CARD91

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CARD91 introduces Optimus – Credit Card Issuance: REDEFINED

In today’s ever-evolving financial landscape, optimizing credit card management processes is imperative for sustained growth and regulatory compliance. That’s why I’m excited to introduce Optimus – an advanced credit card tech stack meticulously developed by CARD91. Optimus, derived from Latin meaning “The Best,” signifies a significant advancement in credit card life-cycle management, empowering financial institutions and raising customer service standards. 

 

With its customer-centric approach, Optimus enables financial institutions to meet the diverse needs of digitally savvy users. Through secure onboarding and a seamless digital journey, Optimus facilitates faster customer onboarding and improved service quality. By providing personalized rewards and streamlining processes, Optimus enhances customer satisfaction, elevating the overall customer experience and delivering added value to help institutions stand out in the rapidly growing credit card market.

 

Here are key features that position Optimus as a game-changer in credit card management

 

Regulatory Compliance and Modernity:

Optimus is meticulously designed with a modern and modular framework to ensure strict adherence to industry regulations. This architecture provides financial institutions with a robust platform to navigate complex regulatory landscapes confidently. By upholding regulatory standards, Optimus mitigates the risk of penalties and legal issues, fostering a secure operational environment.

 

Configurable Credit Programs:

Optimus offers unparalleled configurability, allowing institutions to tailor credit programs to diverse customer needs and market dynamics. From setting credit limits to defining spending criteria and incentivizing usage, Optimus provides the flexibility to orchestrate credit programs seamlessly. This adaptability empowers institutions to stay agile and responsive to evolving market demands, driving innovation and maintaining competitiveness.

 

Customised Rewards:

Optimus enables financial institutions to offer personalized rewards tailored to individual cardholders’ preferences and spending habits. Whether it is cashback on specific categories, discounts at preferred merchants, or exclusive access to events, Optimus empowers institutions to create bespoke rewards programs that resonate with their customers, fostering stronger loyalty and engagement.

 

Digital-First Approach: 

Optimus offers a digital-first approach, prioritizing a user-centric experience aligned with modern expectations. By leveraging optimized digital channels and streamlined processes, Optimus enhances convenience and accessibility for cardholders, ensuring seamless interactions and efficient credit card management.

 

In conclusion, Optimus represents a transformative milestone in credit card management technology. With its robust regulatory compliance, configurable features, rewards program, and digital-first approach Optimus empowers financial institutions to navigate intricate regulatory environments while delivering unparalleled customer experiences.

 

I also extend my heartfelt congratulations to the exceptional CARD91 team for their dedication and innovation in launching Optimus

 

Ready to experience the future of credit card management? 

Reach out, and let us demonstrate the power of Optimus. Book DEMO now.

 

(Blog Authored By: Ajay Pandey, CEO & Co-Founder CARD91)

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Design Thinking in Credit Card Stack Development: Creating User-Centric Experiences

In today’s rapidly evolving financial landscape, where customer expectations are continually shifting, developing credit card stacks requires a strategic approach that places users at the center. Design thinking emerges as a powerful methodology for crafting credit card solutions that not only meet but exceed user expectations. Let’s explore how design thinking principles can be applied to create credit card stacks that resonate with modern consumers, leveraging the elements provided below:

 

 

1. Empowering Credit Card Issuance: A Unified Approach with One-Stop TSP Full Stack

A cohesive credit card issuance ecosystem is essential for seamless operations. By adopting a One-Stop Technology Service Provider (TSP) approach, integrating components like switch/processor, CCMS, UPI, ACS for 3DS, NCMC, Bank portal, co-brand portal, and a cardholder Mobile App, financial institutions can streamline processes and enhance user experiences. This consolidation enhances efficiency and provides a unified experience for both customers and financial institutions.

 

2. Modular Flexibility: Tailoring Solutions to Specific Needs

Every bank has unique requirements when it comes to credit card offerings. Modular flexibility allows banks to cherry-pick modules according to their needs, whether it’s a Rewards Engine, Instalment Plan/EMI module, NPA Management, or the entire stack. This approach ensures that the credit card solution aligns perfectly with the bank’s objectives and target market.

 

3. Highly Configurable for Diverse Credit Card Programs

Credit card programs cater to different customer segments and needs. They also work with different cobrand partners to power different use cases. A highly configurable credit card stack enables banks to orchestrate diverse programs seamlessly. Whether it’s secured/unsecured, retail/business/corporate, or charge/credit cards, the stack can adapt to different program requirements. This configurability empowers financial institutions to offer tailored solutions that resonate with their target audience.

 

4. Delivering a Fintech-Like User Experience

In today’s digital era, user experience is paramount. A customer-centric approach to mobile app design and user journey is essential for success. From DIY features to 100% digital onboarding, the mobile app must be intuitive, seamless, and user-friendly. By prioritizing user experience, banks can enhance engagement, loyalty, and satisfaction among their customers, setting themselves apart in a crowded market.

 

5. Rapid Implementation and Seamless Integration

Time is of the essence in credit card stack deployment. Banks need solutions that offer faster implementation, customization, and integration with minimal manual intervention. A well-designed stack should seamlessly integrate with existing systems like CBS, CRM, IVR, FRM, Collections System, Mobile Banking App, and Net Banking portal. This integration ensures operational efficiency and a cohesive user experience across all channels.

 

6. Rule-Based Operations: Ensuring Compliance and Personalisation

Compliance and personalization are two cornerstones of credit card operations. Rule-based systems within the credit card stack facilitate validations for regulatory compliance, including co-branding arrangements. Moreover, these systems allow for personalized actions at both aggregate and single-account levels, along with event-based notifications for consent and alerts, ensuring transparency and proactive communication with users.

 

7. Leveraging ML/AI for Real-Time Actions

Integrating machine learning and artificial intelligence enhances the capabilities of credit card stacks. Real-time actions such as fraud risk management and personalization of rewards/offers become more effective and efficient with ML/AI algorithms. By leveraging data analytics, banks can promptly detect fraudulent activities while delivering targeted offers that resonate with individual users, thereby increasing engagement and satisfaction.

 

8. Future Compatibility and Innovation

Anticipating future innovations and regulatory changes is crucial in the ever-evolving landscape of finance. A well-designed credit card stack is built from first principles, with scalability and adaptability to accommodate future advancements. For example, customization to support emerging technologies like Credit Line Management on UPI ensures that the stack remains future-proof, enabling banks to stay ahead of the curve while minimising costs.

 

In conclusion, design thinking offers a holistic approach to credit card stack development, emphasizing user-centricity, innovation, and efficiency. By embracing modular flexibility, configurability, and advanced technologies, financial institutions can create credit card solutions that not only meet the demands of today’s consumers but also adapt seamlessly to upcoming demand.

 

Authored by Astha Bishnoi, Manager – Partnership & Sales at CARD91

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Revolutionising Credit Offerings Through Credit Line on UPI

UPI has emerged as India’s preferred payment method, constituting >75%* of the nation’s digital payment by volume. So far, UPI transactions were supported by various funding accounts like savings accounts, overdraft accounts, prepaid wallets, and Rupay Credit Cards. Now, a new addition has entered the UPI ecosystem.

 

Effective April 6th, 2023, the RBI has authorised Scheduled Commercial Banks to facilitate UPI payments using pre-sanctioned credit lines. According to the circular, “It is now proposed to expand the scope of UPI by enabling transfer to / from pre-sanctioned credit lines at banks, in addition to deposit accounts. In other words, UPI network will facilitate payments financed by credit from banks. This can reduce the cost of such offerings and help in development of unique products for Indian markets.” ** 


Credit Line on UPI gives the retail banking customer access to credit in the most convenient fashion – no long-drawn onboarding process, no learning curve and doesn’t take up space in their wallet. In short, a pre-sanctioned credit line simply works like the extension of an existing banking relationship. Coupled with UPI which is the most accessible, powerful, and easy-to-use payment channel in the country, it provides a seamless and efficient way to perform transactions that is sure to bring more citizens into the fold of credit.

For the banks, this presents a new business avenue by unlocking an additional revenue stream with better unit economics, thanks to lower operational overhead. However, for the banks, taking Credit Line on UPI functionality live is not without challenges – the existing Loan Management Systems do not necessarily allow management of Revolving Limit, customising Credit Card Management System to suit the needs of the Credit Line product can be cumbersome and the existing Core Banking System for Overdraft might not be able to handle the required throughput.

This is why banks need a modern, modular, scalable and highly configurable solution that supports a variety of credit line product types. CARD91’s Credit Line Management System offers everything your bank needs to take Credit Line on UPI live for your customers.



Our Credit Line Management System is guided by three principles:
  1. Highly Configurability: CARD91’s highly configurable CLMS platform enables issuers to design and customise credit schemes, supporting various product types including interest-free, interest-bearing, fixed-term loans, and revolving credit to cater to diverse target segments.
  2. Modularity: Our modular framework empowers issuers to effortlessly customise, expand, and integrate features, ensuring a solution that can evolve with your dynamic business requirements.
  3. Regulatorily Compliance: CARD91’s CLMS platform is compliant with the regulator’s guidelines pertaining to digital lending. Our configurable setup makes adapting to new regulations a breeze. 

 

What’s more?

 

> Easily integrate with your banking systems: CARD91’s CLMS allows seamless incorporation of Credit Line on UPI workflows into your existing banking processes. This includes easy management of credit lines through your issuer portal and seamless integration of CARD91’s SDKs with your mobile app/net banking.

 

> Certified for UPI 2.0: Our UPI switch is NPCI-certified for UPI 2.0 and is pre-integrated with CARD91’s credit line management system. If the bank already uses a UPI switch, it can be seamlessly integrated with our CLMS.

 

This is how your bank can go live with Credit Line on UPI in three simple steps using CARD91’s Credit Line Management System:

 

 

  1. Create Credit Scheme

Create a credit scheme on the CLMS portal by defining the credit line product type, account type, and associated templates for fees, billing, EMI, etc.


2. Define Pre-sanctioned Credit Limits

Assign pre-sanctioned credit limits for customers via Bulk Upload / APIs and seek consent before the customer can avail the credit line.

 

3. Allow discovery of credit line accounts via APIs

Our Account Management APIs facilitate comprehensive credit line lifecycle management, encompassing the discovery, activation, and usage of Credit Line on UPI.

 

In embracing Credit Line on UPI, banks can leverage the transformative shift happening in India’s digital payment landscape. The potential impact this can bring about is three-fold:

 

  1. CL on UPI can open up access to credit in rural India through sachet credit line offerings, thereby creating a new wave of financial inclusion.
  2. ETB customers who are non-users of any credit facility, but uses UPI can now be nudged to use Credit Line on UPI, given how simple and effortless the shift is.
  3. Through purpose-based lending that Credit Line on UPI offers (powered by CARD91’s CLMS Transaction Control Module), banks can ensure that the credit usage happens for the intended purpose.

 

By leveraging UPI’s widespread adoption and integrating pre-sanctioned credit lines seamlessly into everyday transactions, banks not only enhance customer convenience but also unlock new avenues for revenue growth.

 

CARD91’s Credit Line Management System offers a robust framework to Issuer Banks to navigate these complexities brought about in managing Pre-sanctioned Credit Lines as per board policy and empower them to pioneer this next evolution in retail banking.

 

Sources:

* https://redseer.com/newsletters/trends-reshaping-indias-payment-landscape/

** https://www.rbi.org.in/Scripts/BS_PressReleaseDisplay.aspx?prid=55473 and https://www.rbi.org.in/Scripts/NotificationUser.aspx?Id=12532&Mode=0

 

Authored by Praveen Varghese, Product Manager at CARD91



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The Future of Credit Card Transactions in India: Embracing the Contactless Revolution

As India advances in its digital transformation journey, the payments landscape is rapidly evolving. Over the past decade, driven by smartphones and government initiatives like Digital India, the financial ecosystem has seen significant shifts. One of the most notable changes is the increasing adoption of contactless payments, especially in credit card transactions. Unified Payments Interface (UPI), mobile wallets, and contactless payments are at the forefront of this revolution.

 

Contactless payment methods such as tapping cards at POS terminals (up to ₹5000), National Common Mobility Cards (NCMC) for transit, and mobile wallets like Google Pay and Apple Pay have made transactions faster and more convenient. Globally, this trend is gaining traction across sectors like retail and public transport, further enhancing the payment experience.

 

The Benefits of Contactless Payments

 

 

Benefits of contactless payments

  1. Speed and Convenience: Faster transaction times improve the shopping experience, especially in busy cities.
  2. Enhanced Security: Each transaction uses encrypted, unique codes to reduce fraud risk.
  3. Hygiene and Safety: Less physical contact promotes hygiene, particularly important post-pandemic.
  4. Mobile Wallet Integration: Contactless cards easily integrate with mobile wallets, adding flexibility to payments.

 

Adoption in India

 

In cities like Mumbai, Delhi, and Bengaluru, contactless payments are gaining momentum, with retailers and public transportation adopting NFC-enabled terminals. While rural uptake is slower, government-led digital literacy and financial inclusion initiatives are helping drive adoption in underserved areas.

 

Safety and Security Perceptions

 

The Reserve Bank of India (RBI) has implemented guidelines to enhance contactless payment security, such as setting transaction limits and mandating two-factor authentication for higher amounts. Financial institutions and payment providers are actively educating consumers on encryption and tokenization to ensure their financial data is secure. Additionally, advancements like biometric authentication and dynamic CVV codes further bolster the security of these transactions.

 

The Future Outlook

 

The Future Outlook

 

  1. Widespread Adoption: Contactless payments will continue to grow in popularity across both urban and rural areas.
  2. Security Innovation: New technologies and stricter regulations will strengthen the safety of these transactions.
  3. Integration with Emerging Tech: Contactless payments will merge with technologies like blockchain and IoT, enhancing their functionality.
  4. Sustainability: The industry is adopting eco-friendly practices, from digital receipts to green card materials.
  5. Credit Line on UPI: An emerging trend is the integration of credit lines with UPI, allowing users to make UPI transactions using a pre-approved credit line without needing a physical card. CARD91’s Credit Line Management System enables banks to manage these credit lines effectively, leading the next wave in digital banking.

 

Conclusion

 

Contactless payments are set to shape the future of credit card transactions in India. Their advantages—speed, convenience, and security—are well-suited to the needs of modern consumers. As the digital payments ecosystem evolves, embracing contactless methods will contribute to a safer and more efficient financial landscape, making the future of credit card transactions both seamless and secure.

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