Economics Prelims cum Mains

‘One Nation One Card’: PM Narendra Modi launches mobility card that would work across country

The news

  • The Prime Minister has launched the indigenously-developed National Common Mobility Card (NCMC).

 

Background

  • Public Transport is extensively used across India as the economical and convenient mode of transport for all classes of society.
  • Cash continues to be the most preferred mode of fare payments across all public transport but it is associated with multiple challenges like cash handling, revenue leakages, cash reconciliation etc.
  • In this context, efforts were made to automate & digitize the fare collection using Automatic Fare Collection System (AFC).
  • However, the Automatic Fare Collection System (AFC) faced restricted usability due to following issues-
    • It only digitized the fare collection up to a limited extent.
    • The digital adoption by customers was limited.
    • AFC systems deployed at various Metros are from foreign players which resulted in the vendor lock-in and lack of interoperable system.
  • Hence, there was a need to develop indigenous standards and AFC system under Make in India initiative.
  • In order to ensure a seamless travel, the Ministry of Housing & Urban Affairs (MoHUA) came out with the National Common Mobility Card (NCMC) Program.
  • Later, a committee was formed with an objective to develop the interoperable ecosystem for NCMC including indigenous AFC System and banking interface.
  • The committee has now developed that ecosystem.

 

 

One Nation One Card:

  • One Nation, One Card refers to a single card and supporting ecosystem that enables its use for cash withdrawal, as well as making payments across various segments including:
    • All forms of transport (metro, bus, suburban railways)
    • Tolls
    • Parking charges
    • Retail shopping
  • The National Common Mobility Card (NCMC) can be issued in the form of debit, credit or prepaid card of a partner bank. In simple terms, the RuPay card has been merged with the mobility card. 
  • Various components: The entire ecosystem of the ‘One Nation, One Card’ concept involves:
    1. NCMC Card
    2. SWEEKAR (Swachalit Kiraya) – Automatic Fare Collection System)
    3. SWAGAT (Swachalit Gate) – Automatic Fare Collection Gate

 

Significance

  • Indigenization: India joins the very few elite nations who have indigenous capacity on gate and reader production.
  • International standards: This is the first indigenous payment reader which has been manufactured by an Indian company and certified as per International standards.
  • Single card: NCMC Ecosystem offers the value proposition for customers as they need not to carry multiple cards for different usage.
  • Better experience: The super quick contactless transactions will improve the seamless experience.
  • For operators: NCMC ecosystem creates common standards for implementation without vendor lock-in.
  • Digitalisation:This will also help in higher digital payments penetration and digitization of low value payments.
  • Cost reduction: This will help in savings on card lifecycle management cost and reduce operating costs.
  • Data collection: The rich data insights collected by cards may be used by operators for business intelligence leading to efficient operation.
  • Extension of banking services: Banks will get access to segments which are highly driven by cash.

 

Section : Econo

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