Prime Minister Narendra Modi launched today One Nation, One Card for transport mobility at a function in Ahmedabad today. The Indigenous Automatic Fare Collection System based on One Nation One Card Model i.e. National Common Mobility Card (NCMC) is the first of its kind in India.

To address this, various initiatives have been taken by transit operators to automate and digitize the fare collection using the Automatic Fare Collection System (AFC). The AFC System (gates, readers/validators, backend infrastructure) is the core of any transit operator to automate the fare collection process.

The government says the major challenge associated with the AFC system implementation in India till now is the lack of an indigenous solution provider, as the systems deployed at various Metros are from foreign players.

Here are the key points you need to know about the ‘One Nation One Card’:

  • The mobility card can be issued in the form of debit, credit or prepaid card of a partner bank.
  • The card is similar to any RuPay debit/credit card, which will be available with more than 25 banks, including the State Bank of India (SBI).

A great dream comes with great challenges


1. India has the second-largest unbanked population in the world

While India is quite proud of adding more individuals into the formal banking system — the number of people with bank accounts grew from 53% in 2014 to 80% in 2017 — it is not enough. As many as 191 million Indians over the age of 15, are still without a bank account.

The figure places the country next only to China where roughly 224 million Chinese above the age of 15 do not have a bank account.

2. Nearly half of Indian bank accounts are rarely used

Around 48% of the country’s bank accounts have seen no transactions in the last year, the World Bank says in its Global Findex database report released last week. India has the world’s highest share of inactive accounts, about twice the average of 25% for developing economies.

Despite a big government push to sign up bank-account holders, many hurdles prevent people from using them. In an economy where 90 percent of transactions are still made using cash, visiting a bank can seem like a chore.

3. Debit card numbers are falling across India.

The number of debit cards in circulation has seen a slow but steady decline since November last year, according to the latest data from the Reserve Bank of India (RBI). While expectations ran high that the number of debit cards would cross 1 billion after hitting an all-time high of 998 million in October last year, the opposite happened. A total of 67 million debit cards went off the grid between October 2018 and January 2019.

Cash is still king RBI’s data clearly shows that the biggest use case for debit cards is cash withdrawals at ATMs.

cash is still king india.png

4. Who is going to finance the AFC system and equipment?

It took China 20 years to get one nation one card for public transportation over 80% (225) major cities in China.

Since the banks will get all the financial benefits of One Nation One Card in India, it will make it very difficult for the central government to finance the AFC systems across the nation.
To understand more about financing AFC system:

Post Author: Keith Lau

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