NCMC – One Card Smart Card

Since the formal declaration of National Common Mobility Card (NCMC) on 4th March 2019 at Ahmedabad by Prime Minister Narendra Modi there has been renewed interest and fillip to the country’s first indigenously developed payment system. The purpose of this blog is an attempt to demystify the aura, optics and technicalities surrounding the concept based on our hands-on involvement and experience in being part of this initiative.

NCMC can be a bank-issued debit, credit or prepaid card, which in addition to the general-purpose use in retail purchase, can uniquely be used ticketing in Public Transport organisations(PTO) like metro, bus, suburban railways etc. and such other related offline use cases like toll, parking payment and so on. It is also the lynch pin of payment systems in smart city implementations of IT based system for public conveniences and services.

We at PayCraft have been at the forefront in development of NCMC specifications and subsequent application of the same in real world scenario of transit ticketing in association with Banks and Payment Schemes. Currently our payment platform supports 8 such public transport ticketing projects on NCMC specifications.

Specifications or Card?

First came NCMC specifications – which are essentially about a set of technical requirements that a payment card in the hands of a card holder and the corresponding card reader device must meet or exceed during the payment process. This requirements specification is elucidated in a document that details requirements for a system, including functional, interface, security and design requirements.

Using the above NCMC Specifications developers need to develop:

  • Contactless payment applications designed for use on a Card (NCMC Card) that an issuer like a Bank issues.
  • Payment application (Payment Kernel) on the Card Acceptance Devices that are provided by payment transaction acquirers for acceptance and processing of transactions.

NCMC card is issued – Ready to go?

Not really, if your host systems including switch, are not designed to manage offline transaction complexities and account balance synchronization between purse on card and host wallet. Banks are now working towards making changes in their issuer and acquiring systems to address this.

The exercise is of course painful and a little time consuming for issuer/acquirer banks and service providers. But then payment systems of established players in banking sector are architected basically for enterprise level applications. Why not banks and institutions then take this as a one-time opportunity, as part of digital transformation, to migrate to a contemporary payment platform? This will enable them to stay relevant and thrive in a dynamic ecosystem – where current requirements are cloud/digital enablement besides offline payment management capability indicated before.

What about ticketing systems with Public Transport Organisation systems?

As mentioned earlier, card acceptance devices are also required to be “NCMC ready” if the ticketing has to happen using NCMC cards in Public transport systems. This is a process that has already been set in motion at the behest of Ministry of Urban and Housing Affairs, Govt. of India, particularly in Metro Rail projects where they invest in the Capex with local State Govt. Looking at public convenience and reduction of operating expenses, local state/city authorities are also now ensuring the PTOs under them meet this criterion.

Technically, the ticketing devices(readers/terminals) have to be EMV contactless Level 1 certified meaning that they should meet the lower level electromagnetic and communication protocol requirements specified by for such a purpose. Such certified devices are available off-the-shelf in the market and are not difficult to procure and install by System Integrators

As indicated before, the payment application Kernel (L2) that implements the payment functionality has also to be certified by payment schemes like Rupay, VISA and Mastercard for Contactless Level 2 certification on the Level 1 certified device. What it means is that these payment schemes have to validate the software that implements the payment functionality (Payment Kernel) based on NCMC specifications.

Currently, in India, all contactless payment brands (like Mastercard/Maestro Contactless, VISA PayWave) support NCMC based Cards issuance and transaction acceptance.

There is also need to make changes to the ticketing application software (often referred to as L3 application) provided by Public transport application developers. They align well with the role that PTO has in the traditional model with transit specific certification of contactless cards and acceptance devices and this being a new challenge to them. PTOs should give due focus to achieving contactless transaction times that meet the tight passenger throughput requirements, that are so characteristic for transit, in their vendor selection processes and requirement specs.

Bottom Line…

Migrating legacy systems is a cumbersome task indeed for Banks and Public Transport organisations. However, with sufficient budget and organization-wide support, this can be accomplished. The challenge is to make changes in the existing infrastructure and integrate between transit and banking systems. Following tips/suggestions should help:

  • For issuers & acquirers of NCMC, offline special use cases like transit, toll etc. are new kind of merchant eco system. They would need good technical consultants on board in the initial phases for guiding them on having the right payment systems and integrating with such hybrid offline-online systems
  • PTOs should ensure making certification an explicit part of device procurement and vendor selection by PTOs
  • Higher involvement of payment schemes on NCMC compliant Level 2 certifications,

The benefits of NCMC implementation for Issuers, Acquirers, PTOs and Govt. versus the effort, time and cost is a subject by itself being debated for the last 5 years and having convinced that is an area not being revisited in this paper. But with the Govt. now mandating NCMC specifications for debit cards too, the scenarios have changed completely with such debates now passé.