National Financial Switch- ATM payment gateway
The Institute for Development and Research in Banking Technology (IDRBT) is in the process of setting-up the National Financial Switch (NFS), which comprises of a National Switch to facilitate connectivity between the Bankís Switches & their ATMs, and inter-bank payment gateway for authentication & routing the payment details of various e-commerce transactions, e-government activities etc.
The hardware has already been installed & the testing is in progress, and it is expected that the pilot test with the chosen banks would be completed by the mid of August 2004. The switch is expected to start live transactions thereafter.
The installed base of ATMs in the country is estimated to be over 15,000 units and it is expected to go up to 30,000 ATMs before December 2005. New Private Banks have been the biggest deployers of ATMs and more recently Public Sector Banks and Old Private Banks have announced aggressive plans to install ATMs.
All the banks have in-principle agreed to join the IDRBTís initiative of setting-up the National Financial Switch Project.
It has also been decided that there will be a default inter-change switching fees between the banks, unless they have their own mutual agreements. The infrastructure will allow connecting directly to the individual bankís switch or through their shared ATM Network Switches. IDRBT is looking for win-win situations for all the Banks, ASPs and customers.
The Clearing Corporation of India Limited (CCIL) will be the clearing and settlement agency for the switch, which will also facilitate the disaster recovery from its premises at Mumbai.
A NFS User Group has been formed to deliberate various issues related with the procedures, fees etc., and there is also a Steering Committee of the top management of Banking industry to resolve various issues related with the National Financial Switch, which will review the charging policy from time to time.
The new initiative is expected to widen the scope of ATM network sharing and customers of several banks are expected to benefit by this initiative.