Recently the Prime Minister has launched the indigenously-developed National Common Mobility Card (NCMC).
Dubbed as ‘One Nation One Card’, the inter-operable transport card would enable the holders to pay for their travel expenses (bus, metro, railways), toll taxes, parking charges, retail shopping and even withdraw money across the country.
This type of system already exists in various developed countries like UK, Singapore, etc. and now it will be used in India too.
What are the salient features of NCMC?
- It consists of
- NCMC card,
- SWEEKAR (Swachalit Kiraya: Automatic Fare Collection System or AFC),
- SWAGAT (Swachalit Gate – a gate and card-reader system).
- These three facilities will allow the use of national mobility card across the country without any conflict with current point-of-sale (PoS) machines.
- NCMC runs on RuPay card to enable both money transactions and manage travel expenses.
- The stored value on the card supports offline transaction for all travel needs with minimal financial risk to involved stakeholders.
- All public and private banks can issue the cards just like the way credit, debit and prepaid cards are issued. NCMC has partnered with 25 banks for this initiative. The list includes SBI and the Punjab National Bank. In addition to this, payTM payment bank can also issue the card.
- Along with a swipe-to-pay option, NCMC will also be a contactless card = allow quick payments.
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Which agencies are involved?
- NCMC is an initiative of the Ministry of Housing & Urban Affairs (MoHUA).
- Specifications for card & terminal: by NPCI (National Payments Corporation of India).
- Specifications for Automatic Fare Collection (AFC) System with Bank interface: by C-DAC (Centre for Development of Advanced Computing) and NPCI.
- Gates & card-reader system: Bharat Electronics Limited (BEL).
What is the need/significance of NCMC?
Problems with cash transactions:
- Public transport is extensively used across the country as an economical and convenient mode of transport by all sections of society.
- Although cash is the most preferred payment mode, there are several associated challenges like cash handling, revenue leakages, cash reconciliation, etc. = need for digitization of fare collection.
Problems with foreign technologies:
- Considering the cash transaction challenges, the transit operators implemented several initiatives for digitizing the fare collection using Automatic Fare Collection (AFC) system (gates, readers/validators, backend infrastructure, etc.)
- However, the primary challenge associated with the implementation of the AFC system in India is the absence of an indigenous solution provider.
- Until now, the AFC system implemented at different Metros in India is from foreign players which comes with the issues of vendor lock-in and lack of interoperable system.
- Thus there was a need to create indigenous standards and AFC system under the Make in India initiative.
- Note- In economics, vendor lock-in, also known as proprietary lock-in or customer lock-in, refers to the situation where a customer is completely dependent on a vendor for products and services & unable to use another vendor without considerably switching costs.
Indigenous: NCMC is India’s first indigenously developed payment eco-system for transport.
- This is the first gate and the reader manufactured by an Indian company.
- This is also the first indigenous payment reader which has been certified as per International standards.
- With this, India joins the very few elite nations who have indigenous capacity on gate and reader production.
- Thus the country no longer needs to be dependent on foreign technology.
Works across the country: In some cases, travel cards issued in a particular city did not function in a different city or state. This newly launched card will eliminate this issue and will be usable across the country.
High cost-benefit: due to savings on closed loop card lifecycle management cost and reduced operating cost.
Digitization of payments: NCMC Ecosystem will further help the government in digitization of low-value payments and reduced cost for the entire ecosystem.
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