Consumers need to analyse data usage, and get control on spending

Digital consumer payments is a $2-trillion market. There is no single player having more than 50 per cent market share, there are limited entry barriers and skilled tech talent is abundant in India. The government has been actively supporting the sector with its strategic announcements. It is projected there would be 300 million smartphone users in the country. In other words, it is a good time to be present in the industry today.

The biggest contributor to the mobile payments market is the recharge of telecom services, such as prepaid mobile and direct-to-home (DTH) services, and postpaid bill payments.

Currently, there is a huge disconnect between mobile service plans or packs available with the telecom operator and the plan consumers use. To identify a suitable plan, consumers need to analyse their usage of voice and data, and get more control on their spending.

Balance Hero has made an appreciable effort with its product True Balance. It not only provides a payments interface to recharge prepaid SIMs but also acts as a complete guide for optimising mobile plans according to usage analysis. Identifying patterns based on user spend history and usage, customised notifications to users would enable them have a greater control over their billing and payments, along with convenience and cost efficiency.

However, one of the biggest challenges facing the revenue models based on recharge commission and ads is their viability at a much larger scale. The average Indian consumer is easily lured by new user/first-time discounts. But, retaining customers is not only imperative but also challenging. Consumers become profitable at a unit economics level only when they use your platform on a continuous basis. This, in turn, depends on how wide the range of solutions you are giving to your customer. True Balance would need to make quick forays into the entire payment ecosystem to become truly relevant for the consumer, including tying up with all utility payment billers such as DTH, power, water, etc., and promoting themselves to as many merchants as possible. Until then, its consumer stickiness would witness a lot of ups, plateaus and downs. As foray in this space deepens, the resources and accompanying costs go up significantly.

While saying there are limited entry barriers, it is worth mentioning the compliance requirements are stringent and are expected to go deeper. The challenge of introducing new tech innovations and at the same time letting go of aspirational products that are not creating value to the consumer is inevitable. The consumer internet space is extremely dynamic, and any player aspiring to stay relevant needs to have processes which are continuously improved and in sync with the market offerings. Sometimes products/offers that involved a lot of effort are to be discontinued if they do not bring in value in revenue generation or customer engagement. The path to profitability calls for some tough decisions.

With time and consumer history, if the app is able to efficiently provide value to the mobile payments ecosystem, it would have a competitive edge over others.