What exactly is eCash?
eCash is basically money stored in a chip. It operates on the pre-paid card concept and therefore eliminates the risks associated with credit or debit cards. Importantly it can be used for very low value transactions as well since the processing costs are low since eCash involves only one settlement in a day for establishments.

What are the various `smart' elements that the chip will incorporate?
The core functionality of the card will be payment but there will be `pouches' that will incorporate elements like loyalty programs, utilities (payment of bills etc) and personal information. The eCash terminals will be equipped to activate all these segments. For instance if there is a new loyalty program, any terminal will update the cards. The chip also provides a high degree of security and will prevent fraudulence in the course of a transaction. The embedded software is also equipped to work offline. It can, for instance calculate what you have spent and the amount that needs to be replenished on the card.

Traditionally, it has been found that while the growth of credit cards is on the rise, they are nowhere near the potential of 40 million upper income households, why are you optimistic about eCash? There is an element of risk involved with credit cards. Credit card transactions are typically non secure and call for risk management for which bureaus can be very effective.

Information sharing and maintenance of databases between the issuing authorities is really key to minimise risk. But in eCash the real proposition is that it involves zero risk. It is prepaid - money that is already loaded in the chip which is why I think eCash will succeed.

What are the various drivers for eCash in India at this point?
Competition between retail banks is hotting up and infrastructure for automation is now available. These factors coupled with the fact that eCash addresses some of the issues that users as well as issuing authorities may have with credit and debit cards are all drivers for the growth of eCash in India.

What sort of target have you set for yourself in terms of the penetration of eCash?
It is really difficult to pinpoint the time-frame within which we can achieve the required penetration of eCash. We do however have some idea on the kind of numbers we want to do with eCash. We think there is a total potential for 250 million smart cards, about 100 million ATM and debit cards and about 40 million credit cards today.