Towards presence-less,

paperless, and cashless service

delivery
1
125 Years of Power Generation
Edison to Now

2
125 Years of Telecom
Graham Bell to Now

3
 Layered Mass
Innovation Flourishing!

4
 eCommerce Taxi Hotel
--- ---
(Amazon) (Uber) (Airbnb)

Evolution of Payment Systems,

Payments Visa/Master, ApplePay
Security Frameworks, ...
TECH STACK

Telecommunications & Computing

Smart Phones Technologies - Hardware Android, IOS
Innovations

Large Scale Infrastructure, Private

Open APIs, Platforms Google Maps
Companies,

Fundamental Technology
TCP / IP, Internet, SMTP
Govt. Technology Innovations, Govt. Funded, Publicly
(Email), GPS
Available

Layering of Innovation 5
 Applications / Systems
Aadhaar Hourglass SIM
Finance

Architecture Healthcare
Apps
Digital Locker
Apps

UPI
DBT
● Minimal APB AEPS
● Standardized
eSign
● Simple design
● Easy to execute Aadhaar
● Easy to write a law
Biometric
Sensors

Identity as a utility, an Phones Tablets

enabler
Attendance
Allows innovation on all sides Micro ATM
Device
Amplifies ecosystem players
Devices
6
J A M - The Foundation of the India Stack

7
 Pradhan Mantri Jan Dhan Yojana
BANKING FOR ALL

Source: As on 25 Sep 2016, http://pmjdy.gov.in Nandan Nilekani, 2016

8
Accelerated by regulatory innovation

2nd Aug 2016

On Tap
49 Years, 14 New Banks +21 Banking Licenses

1969 1980 1993 2001 2014 2015 2016

+2 +2

+10
BANK
NATIONALIZATION Ushering in a new ERA
New Banks of DIFFERENTIATED
BANKING
Nandan Nilekani, 2016
 1 Billion in 5½ Years
A Ubiquitous Digital
50 M Identity Infrastructure
for a digital desh.
100 M

300 M The Aadhaar system can

600 M authenticate 100 M
950 M transactions per day, in
1064 M real time!

Source: Data from http://www.uidai.gov.in 10

 The rise of smartphones

Current sales
about 25M
smartphones
per quarter

Source: Ericsson Mobility Report 11

 The Evolution of the India Stack - Built on JAM

Digilocker
Aadhaar
AEPS Consent
eKyc
Architecture
Aadhaar
Authentication

APB UPI
eSign

2009 2010 2011 2012 2013 2014 2015 2016

JDY 100 M 190 M 250+ M

Aadhaar 600 M 950 M 1+ B

Mobile 944 M 1005 M 1+ B

Source: Ericsson Mobility Report, PMJDY, Aadhaar Web Sites 12

Name
DoB/Age
Gender
Address
Mobile/Email

1234 5678 9012

Unique
Lifetime

13
 Aadhaar
Authentication
NO MORE PHYSICAL
PRESENCE

Are you who you claim to be?

Only a yes/no answer
Anytime anywhere
14
Aadhaar
e-KYC

NO MORE PHOTOCOPIES!

Access ONLY via authentication

No more fake identities
No more paper
15
eSign - eliminating wet signature

Residents Application Service eSign Service UIDAI

needing to sign a Provider (ASP) Providers (ESP) (for Aadhaar
document eKYC)

1.Online request for 2. Request for

Digital Signature PoA/PoI Data

4. Online Instant 3. PoA/PoI

Digital Signature Through eKYC
Issued

Existing DSC non-scalable due to physical verification, paper process, and use of dongles
eSign allows all Aadhaar holders to digitally sign anytime anywhere
Open API based, allowing applications to easily integrate
 Digital Locker - eliminating fake papers

Issues Accesses Documents

Documents Digitally Online Open API based
Multi-provider
Digital Locker
Issuer Ecosystem Requestor
Ecosystem driven

Approves Digitally protected

Access

No Physical Papers
Users No Fake Documents

Source: https://digilocker.gov.in 17
Unified Payment Interface

Push & Pull Payments

Payments can be initiated by payer or payee.

Ubiquitous - Bank accounts Virtual Payment Address

Every one with a bank account can send
money to any bank account in India!
@ No need to disclose account information.
Allows account portability, enhances privacy.

Easy Immediate Payments Validation & Assurance

Real-time posting Real-time validation of the
Funds are not locked! account and balance

Timely Notification Minimal Issuer/Acquirer Cost

Immediate notifications of Smartphone replaces card and
the payment made PoS machine!!

18
Electronic consent architecture

● Structured consent artifact and log system

● User controlled data sharing, data flow, and Consent Flow

data retention Digitally signed
consent artifact

● Separation of data and consent flows CONSENT

MANAGER
● Consistent with current legal frameworks Data Data
Providers Consumers
(Banks,Telco, (Banks,Credits
Hospitals,etc) Providers etc)
Data Flow
Secure data sharing
based on consent
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 Benefits of proposed consent architecture

Allows more data sources to be used

for lending decisions
Stronger underwriting, less
likelihood for loan defaults
Data flows tracked digitally, providing
traceability
Quickly identify fraud, take early
action. Reduced data leakage,
improved security and privacy

Consent tokens are shared, not credentials

Reduced potential for misuse, leading
to improved security and privacy
Purely digital process
Instant monitoring, and reporting,
improved transparency. Regulator can
monitor defaults, risks, fraud
Real Identity is verified in the process
Reduces potential fraud, and
improves the effectiveness of
credit bureaus.
20
 COMMERCE CREDIT INVESTMENTS
SKILLS OTHERS
(GSTn) (RBI) (SEBI)

Provides a modern privacy data

CONSENT LAYER Open Personal Data Store
sharing framework
STACK

Game changing electronic payment

CASHLESS LAYER systems and transition to cashless IMPS, AEPS, APB, and UPI
economy
INDIA

Rapidly growing base of paperless Aadhaar e-KYC,

PAPERLESS LAYER systems with billions of artifacts E-sign, Digital Locker

Unique digital biometric identity

PRESENCE-LESS LAYER with open access of nearly a Billion Aadhaar Authentication
users

JAM Jan Dhan, Aadhaar, Mobile 21

 1.064 Bn 2.98 Bn
Enrolments In 6 years since launch Authentications of 470M unique ids

800K
150 Mn 339 Mn
eKYC in 3 years APB Accounts Linked
50 Mn unique ids

>1 Mn 2.5 Mn 3.7 Mn UPI VPA in

e-Sign in 15 months
>0.8 Mn unique ids
Digilocker users & Docs
15 months
Just over 1 Month

Nandan Nilekani, 2016 22

Source: UIDAI Website, Conversations with NPCI, eMudhra, Deity officials
 India Stack Ecosystem

1 Digilocker Provider
126 Banks (AEPS) 3 eSign ESPs

794 Banks (APB) 23 KSA 162 KUA

Aadhaar eKYC

25 ASA 262 AUA

20 Banks (UPI) Aadhaar Authentication

Nandan Nilekani, 2016 23

Source: UIDAI Website, Conversations with NPCI, eMudhra, Deity officials
India will go from data poor to data rich nation in 5 Years ...

Social

Commerce

Payment Machine Learning

& Algorithms

Paperless
Process

Digital
Identity … allowing data driven decision making for scale and
inclusion!
24
WHAT WHAT WHO
YOU YOU YOU
KNOW HAVE ARE

PIN / Password Card Proof of Identity

The phone will replace the card as the

‘What you Have’ authentication factor

Nandan Nilekani, 2015 25

WHAT WHAT WHO
YOU YOU YOU
KNOW HAVE ARE

Smart Phone Aadhaar

Combining Security with Convenience

Biometric smart phones enable 1-click 2-factor authentication

Nandan Nilekani, 2015 26

 The future is here!

Smartphones with integrated

Aadhaar compliant Iris
recognition available for
commercial use!

Source:http://news.samsung.com 27
Why is the India Stack disruptive?

Allows Innovation

Broad based, ubiquitous, inclusive No physical presence required

platform (reduces more costs)

Aligns market goals with

Cuts Onboarding Costs
social goals

Increases trust - allows a new

Cuts Transaction Costs business architecture to emerge

28
Providing credit without friction

29
In today’s model, Rajni can never get a loan!

Sales Cost
Customers with
the lowest
Servicing Cost default rates
have the
highest interest
No Credible Data rates
 Need
a loan
Agrees
Repays to share
loan data

Sells
Sees
loan 7 Key Steps For
Rajni to get a small
Goods offers

Accepts
intra-day loan
Receives best
loan offer

31
 Credit
marketplace
app

Payment Need a Consent

app loan Architecture
Agrees
Repays to share
loan data

Sees
Sells loan Credit
Payment
app
Goods offers
market-
place
Each step requires
Receives
loan
Accepts
best offer
a solution
Transaction paperless
a/c & app contract

32
 Aadhaar/
eKYC
digi
Credit
locker
marketplace
app
auth
UPI orization
Payment
Need a Consent api
loan Architecture
app
Repays Agrees to
loan share
data

Sells
Sees
loan
Each solution is
enabled by the
Payment offers
Credit
Goods API for
app market-
UPI loan
place

India Stack
offers
Receives Accepts
loan best offer

Transaction paperless
a/c & app contract

UPI eSign
Digilocker

33
 Feeling of Cashless &
Wellbeing Paperless

Virtuous Cycle of
Business
Growth
Digital
Footprints
Credit to the
first mile
Business
Micro-Credit

34
Credit at scale

Millions of Borrowers Thousands of Lenders

Credit
Marketplaces

Digital Footprints

Data Driven Consented Data Sharing Electronic Contracts

Algorithm Driven Enabled by Mobile Digital Payments
35
Making investments accessible

36
 Investment at scale

Low Cost, High Volume, Low Ticket Size

Source: NCAER-CMCR survey, www.openthemagazine.com, discussions with ScripBox 37

Sachet Sized Transactions!

With reduced costs, minimum ticket sizes will come down,

volumes will go up!

TXn Cost Comm. Break Even Ticket Size

Rs 50 50 bps Rs 10,000

Rs 5 50 bps Rs 1,000

Rs 2 50 bps Rs 400

38
To Increase Market Size 10x or 50x

Cost of Doing Business Must Come Down!

39
Enabling The Skills Marketplace

40
The Skills Problem

Low trust environment

Employers do not trust credentials
Training is not a differentiator
No premium for quality
No accumulation of skill credentials
Lack of mobility
41
Virtuous Cycle for Skills
Training,
Differentiated
Apprenticeship &
Earnings
Certification
Guru-Shishya Parampara
Ecosystem of
institutes/agencies
Market places
like LinkedIn,
Babajobs, etc.

Credible Trusted
History Credentials

Aadhaar, Digital
Locker for portability
and trust
Employment
42
Skilling at scale

SKILLS

COMMERCE
EXPERIENCE

TOURISM CONSENT ARCHITECTURE

TRANSPORT DIGITAL LOCKER
COMMON IDENTITY

Networks and aggregators driving India Stack allows skill and

mass skilling in several domains experience to be portable
43
 Innovative Solutions to
India’s Hard Problems
- Commercially Viable
- Far reaching consumer impact
- Reinforces experimentation
A robust
foundation to
100s of Experiments
- Low barriers to entry
enable innovative
- Level playing field
- Aligned to national issues
- Rapid success/failure cycle solutions to
India’s hard
problems
Market Making Policy India Stack as Regulatory
via Challenge Grants Digital Infrastructure Policy 44
Thank You

45