Brief

NXP facilitates inclusive banking

The company’s near field communication chips facilitate banking of the ‘unbanked’

NXP Semiconductors, the co-inventors of Near Field Communication (NFC) technology and A Little World, providers of the ZERO mobile platform for inclusive banking, have rolled out a next-generation solution that will enable a micro bank to be set up in every Indian village. The breakthrough pilot project has been deployed by seven major banks in over 450 villages across four states in India. The initial pilot project has brought full-featured banking services to over 45,000 rural Indian citizens right inside their villages, through Customer Service Points equipped with NFC enabled mobile phones, contact-less RFID smart cards and integrated biometrics. For participating banks, it eliminates the cost and effort to set up physical branches in rural areas, while providing full services for cash deposits, cash withdrawals, utility payments, money transfers, micro-insurance, and cashless payments.

NFC is a short-range wireless connectivity technology that enables consumers to securely exchange and store all kinds of information, simply by bringing two devices into proximity. Evolving from a combination of contact-less identification and networking technologies, NFC enables convenient short-range communication between an RFID card and an NFC mobile phone, or between two NFC devices.

Typically the smartcard stores the identity of the customer—name, address, photograph, fingerprint templates and relevant details of the savings or loan accounts held by the issuing bank. The RFID cards being used in the pilot use the same chip that is embedded in newly issued e-Passports in more than 35 countries worldwide, including the US, countries in Europe, and Singapore.

Rajeev Mehtani, Vice President and Managing Director, NXP Semiconductors India said, “According to Reserve Bank of India (RBI) figures, approximately 40 percent of Indians lack access to formal financial services and are largely ‘unbanked’. The pilot project currently being rolled out is in line with NXP’s strategy of providing its customers with banking and financial services solutions for all segments of the population.”

Anurag Gupta, CEO of A Little World said, “We are pleased to partner with NXP who have supported us closely in developing a futuristic solution—the ZERO platform—in a tight time frame. We have carried out pilot projects with the State Bank of India in villages located in some of the most inaccessible and difficult terrains of the country such as Pithoragarh in Uttarakhand, Mizoram, Meghalaya, and remote villages in Andhra Pradesh. In Warangal we have also worked with Union Bank, Axis Bank, Andhra Bank, State Bank of Hyderabad and Andhra Pradesh Grameena Vikas Bank in a collaborative project between six banks and the Government of Andhra Pradesh, being directly supervised by the RBI.”

Ashok Chandak, Director NXP Semiconductor, added, “The ZERO platform uses contact-less technology from NXP Semiconductors in an innovative way with the potential to bring about rapid deployment of IT-enabled financial inclusion in villages and to provide mainstream financial services to rural citizens through a mini core banking system right inside their villages. This will also ensure that benefits disbursed by various Governmental programs like social security pensions and wages under NREGA reach the intended beneficiaries quickly and at a lesser cost. From the point of view of a bank, the platform is simple, secure, cost-effective and has the potential to provide multiple services to the customer through a single channel.”

An NFC-enabled mobile phone acts as a branch of the bank by storing the entire database of customers in the village and neighboring areas within the phone’s memory, protected by a very high security PKI chip built into the NFC subsystem on the phone.