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

In a world that has moved to the internet and the mobile, data privacy is paramount. This is more evident in financial services. As India embraces digital financial services, the volume of sensitive consumer data has soared. Protecting this data is essential not only for regulatory compliance but also for building and maintaining consumer trust. Robust data privacy practices prevent financial crimes such as identity theft and fraud, ensuring the integrity of financial systems, and the security of customers.

The Significance of Data Privacy in Indian Fintech

The digital transformation of financial services in India has led to an explosion in the amount of sensitive consumer data being collected, processed, and stored. Ensuring the privacy and security of this data is vital for maintaining consumer trust and preventing financial crimes such as identity theft and fraud.

Challenges in Prioritising Data Privacy While Fostering Innovation

Regulatory Compliance: The Digital Personal Data Protection Bill, 2023, aims to provide a robust framework for data protection. Fintech companies must navigate these regulations, requiring significant expertise and resources to ensure compliance without stifling innovation.

Data Security: With rising cyber threats, fintech firms must prioritise data security. Implementing advanced security measures like encryption, multi-factor authentication, and regular security audits is crucial to protect consumer data from breaches.

Transparency and Consent: Consumers are increasingly concerned about data usage. Fintech companies must ensure transparency in their practices and obtain explicit consent from users for utilising their personal information for various analysis, which can be challenging in a rapidly evolving industry.

Balancing Personalisation and Privacy: Personalisation enhances user experiences but requires access to detailed consumer data. Fintech companies must balance data utilisation for personalisation with respecting consumer privacy, ensuring that customer data is protected at all times.

Strategies for Prioritising Data Privacy at CARD91

1. Embedding Privacy into Product Development: CARD91 integrates data privacy considerations from the initial design phase of all products and services, ensuring inherent protection of consumer data.
2. Advanced Security Technologies: CARD91 deploys cutting-edge security technologies, including AI for threat detection and end-to-end encryption, to safeguard consumer data from cyber threats and breaches.
3. Regular Privacy Audits and Assessments: Frequent privacy audits and assessments help CARD91 evaluate and enhance the effectiveness of its data protection measures, identifying and addressing potential vulnerabilities promptly.
4. Employee Training and Awareness Programs: Ongoing training and awareness programs for employees foster a culture of privacy awareness, ensuring all staff members understand their role in protecting consumer data.
5. Consumer Education and Transparency: CARD91 prioritises transparency by clearly communicating its data privacy practices to consumers and providing educational resources to help them understand their rights and protection measures.
6. Robust Incident Response Plan: A comprehensive incident response plan enables swift and effective action in the event of a data breach, minimising its impact on consumers.

By focusing on these key strategies, CARD91 ensures that data privacy remains a top priority while fostering innovation in the Indian fintech market. This approach not only complies with regulatory requirements but also builds lasting trust with customers, driving long-term success.

The Role of Government and Regulatory Bodies

The Indian government and regulatory bodies, such as the Reserve Bank of India (RBI), play a pivotal role in shaping the data privacy landscape. Initiatives like the RBI’s data localisation mandate and the forthcoming Digital Personal Data Protection Bill emphasise the importance of protecting consumer data. The establishment of the Data Protection Authority (DPA) will further strengthen the regulatory framework, ensuring compliance and safeguarding consumer interests.

Conclusion

As India’s fintech sector grows, giving importance to data privacy while fostering innovation is critical. At CARD91, we are dedicated to protecting consumer data through privacy-centric practices and robust security measures, ensuring the safety and trust of our customers.

In an era where data is the new currency, excelling in data privacy is not just a legal obligation but a strategic advantage. Fintech companies that prioritise data privacy will build lasting relationships with their customers, driving long-term success in the dynamic Indian fintech landscape.

At CARD91, we are committed to creating a secure and innovative environment for financial technology in India, ensuring a sustainable and trustworthy future for the industry.

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

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

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

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.

Card industry has seen steady growth in the last two decades from EMV chip card (use a smart microchip to store data instead of mag stripe) payments to contactless payments, but security remains a big challenge for the industry. These concerns have led to innovations towards more reliable and secure technologies such as biometric card payment. Such technologies have received significant boosters during the contagious Global pandemic of COVID-19. People started preferring contactless payment methods for payments using Mobile wallets or tap and pay cards to avoid any kind contact as precautionary measures. The main concern with the current contactless payment system is the upper cap on the transaction amount. To boost the contactless payment, RBI has increased the limit from Rs 2000 to Rs 5000 during the pandemic period. However, higher transaction limits for tap and pay cards posed bigger security concerns since no second factor is being used for payment authorisation. Biometric cards do provide a ray of hope by addressing some of the challenges faced by the card industry.

Biometric Cards: Innovation for Secure Payments

What are Biometric Cards? 

Biometric cards are a unique combination which uses the payment mechanism of a regular Card, authentication mechanism of biometric based payment while maintaining the safety mechanism of contactless payment. Biometric contactless cards offer more security and seamless user experience than all the other payment modes by combining their best features and avoiding their shortcomings. Each Biometric Card has a built-in fingerprint reader hence customers do not need to remember their PIN or touch any POS terminal, as all transactions are performed by touching the fingerprint reader on the card itself. Biometric payment cards ensure the same existing EMV standards and use typical safety measures like end-to-end encryption along with tokenization with additional layer of security, by adding finger size biometric reader on the card for biometric authentication. In the case of cards Lost or Stolen, chances of replicating fingerprints or stealing data from Card for fraudulent activities is implausible. Also, personal data of cardholders is stored only on the card and is neither held on the bank server nor sent to any external database. We tech savvy people always want more personalised and high technology cards and these biometric cards are the exact solution for our requirements.

How do Biometric cards work?

• Once the biometric card is received, the cardholder can securely install the fingerprints data in the card by inserting the biometric card in the sleeve and following the simple procedure provided.

• Cardholders can also configure the fingerprints by visiting their nearest bank branch.

• Card activation is completed at the time of the first transaction at the POS terminal. 

• At the time of making the payment, customers can place the card on the POS terminal.

• The POS terminal reads the card details and requests for authentication.

• Customers can authenticate the transaction by placing their finger on a biometric reader on the card thus avoiding any direct contact with the POS terminal.

Benefits to Stakeholders

• Highly Safe, Secure and easy to use. 

• Easy and quick registration of fingerprint data on card at home or by visiting bank branch

• Instant and seamless payments authorisation.

• No need to remember the card PIN.

• Technical compatibility with the existing contactless or chip payments terminals

• No additional cost for merchants to accept payments through biometric payment.

• Self-charging – biometric sensor is powered using a terminal.

• No queue on the checkout counter because payment processing is faster with biometric cards.

The only challenge with the biometric card is that only the cardholder can use the card because transactions get completed only after the successful fingerprint authentication and biometric technology can only capture one unique identity that can never be changed.

Way Forward

Biometric cards can bridge the gap between innovation and security concerns of the current payment system. It will gain trust of banks and service providers by providing complete customer assurance and convenience to use with no additional efforts on their part than simply putting a thumb on the card. All these benefits put together make biometric cards setting the new industry standards from a security and convenience point of view in the payment industry. According to the ABI research around 2.5 Million biometric contactless cards are expected to be issued in 2021 and growth of biometric cards is expected to soar globally in the next few years.

In a country like ours which is predominantly rural and agricultural based, where the illiteracy rate is very high and remembering PIN/ Password for cards is very challenging. The benefits of Biometric cards will be a real boon for us. Biometric payment cards provide all-in-one high-end technology, convenience, usability of smartphones and security assurance with reduced effort on the customer’s part. Now is the perfect time for Indian banks to start offering biometric cards to its users and  make India a cashless and digital economy.

Recently, the word Neobanks have been thrown around quite often. This may have left you wondering many things such as; Why a neobank? Are they real banks? Where is its place in the future? In this article, we have made an attempt to address everything that we think you should know about neobanks. For those who are new to the term ‘Neobanks’, check out this article.

What do Neobanks offer?

The banking sector is built around such rigid compliances, they lag in providing superior customer-centric services. Thanks to neobanks, you can now bank with the same convenience of booking an uber – yes you heard that right – banks have moved into smartphones.

Neobank apps are slick, simple. They are designed to help you understand better& improve your saving and spending habits. Built for the digitally savvy, these apps eliminate the frustration of paperwork and other rigid compliances of a regular bank.

Why Neobanks?

Neobanks have come across as a breath of fresh air in a world where financial services are haphazard and fragmented. How is a neobank better than a regular bank?

• It’s Cheaper: Neobanking products are generally inexpensive carrying low to no maintenance fees.
• Convenient: Everything banking including opening an account can be done at the convenience of your smartphone.
• Quick process: Updated technology allows deposits and loans to process at a lightning speed.
• Loans at better rates: Generally, larger banks don’t offer small loans. But neobanks are changing that by concentrating on small loans too at better interest rates.
• Helpful insights and stats: Neobanks provide timely reports and valuable insights to their customers to help them make better financial decisions.

Are they real banks?

Well, some are while the others aren’t. The neo banking landscape is an amalgamation of non-licensed, over-the-top banks, digital initiatives of traditional banks, and licensed neobanks.

• Over-the-top banks: These are digital-only platforms without their own banking licence. Fintech startups backed by powerful AI technology, partner with the existing traditional banks to form neobanks.
• Licensed banks: Some Fintech startups that started out as an OTT, obtained a virtual banking license from the government later.  These are as much as a bank as any traditional bank.
• Digital Banks: Lately, some traditional banks have come up with their own version of digital platforms. They offer 100% digital services to their customers. Although fully digital, these do not classify as neobanks.

In India, pure digital banking has not yet regulated by the RBI. Hence, neobanks have structured themselves in a way to work in partnership with the regular banks (OTT). And aim to provide services built atop traditional bank’s offerings.

The Path Ahead

A study conducted by Bain and Company across 22 countries, found that digital channels are the preferred means of purchasing banking products. And, the share of purchases via such channels rising by 2% to 16% points since 2017. Neobanks are ever-evolving and growing popular each day. As a result, the ease of use and lower costs makes it look like this is where the world of money is headed.

Since the evolution of the human race, Finance, Economics and Banking have significantly developed. From quasi banks and grain loans of Babylonia to the establishment of modern banks – humankind has thrived in the progress of the banking sector.
However, the question here is, has the banking sector progressed since the 19th Century? Of course, technology has transformed the way banks function. But, over the years, legacy systems or Core Banking Solutions (CBS) have undergone cycles of change, to meet a wide range of requirements. Due to the complexity, switching to newer systems isn’t an easy task for the financial giants.

The Dawn of Neobanks:

While the bigger players in the financial sector have been struggling to keep up with the pace of digitization, another set of players called “Neobanks” have emerged in the fintech space. ‘Neobanks’ are 100% digital banks which offer services ranging from accounts, credits and payments without the burden of a physical network. Eg, Revolut, Monzo, Xinja etc.

Some of its key features are:

• Mobile App controlled without any storefront
• Free Debit Card with control over an App
• User-friendly interface consumer-centric
• AI-Based smart and real-time reporting
• Low-cost structure

What is so ‘Neo’ about them?

The branchless approach to banking reduces its operating costs significantly. Thus, enabling them to provide better and hassle-free services to their customers.
Some of the top-notch services offered by neobanks globally are:

• Digital Onboarding/Account Opening: Neobanks offer simple and fast online account opening in just a few clicks on their smartphone.
• Branchless Banking: All financial requirements of a customer are fulfilled digitally eliminating the need to visit a bank branch.
• International Payments/Remittances: They offer fee-less usage of their debit card in foreign countries at live exchange rates.
• Money Tracking/Account Aggregation: These banks provide an interface that helps users to spend, save, and manage their money.
• Lending/Credit Products: Neobanks can provide credit products at lower charges and interest rates compared to traditional banks due to their lower operating cost.

In addition to these banking services, some Neobanks also provide value-added services – Payment processing, invoicing and accounting support, investment/wealth management support, data analytics, etc. Neobanks have been succeeding in the international market such as the UK, Europe & the US for quite some time.  They are now being recognized in developing countries such as India also.
Now, bouncing back to our question earlier, though the banking sector has progressed the digital wave has created a need for a revolution in the field. With the rise of neobanks, a revolution has already been set ablaze.