‘We will sup­port ser­vice providers pro­mot­ing fi­nan­cial in­clu­sion in In­dia’

Voice&Data - - CONTENT - Kr­ishna Mukher­jee x-kr­ish­nam@cy­ber­me­dia.co.in

Voice&Data: How will mo­bile fi­nan­cial ser­vices help fi­nan­cial in­clu­sion in In­dia?

Sharath Dor­bala: First of all, many peo­ple in In­dia are un­banked, over 50% of peo­ple do not have ac­cess to bank ac­counts as of now. With mo­bile fi­nan­cial ser­vices it’s not just about ba­sic de­posits for cash in and cash out it’s about cash pay­ments, util­ity pay­ments, peer-topeer pay­ments and on top of it sav­ings, loans and cred­its.

If you have all th­ese ser­vices, then only you are talk­ing about real fi­nan­cial in­clu­sion. Oth­er­wise, you are talk­ing just about bill pay­ments ser­vices, etc. For fi­nan­cial in­clu­sion, you need to pro­vide all th­ese plethora of ser­vices. That’s when you talk about fi­nan­cial in­clu­sion and that’s what mo­bile fi­nan­cial ser­vices are all about. It’s about re­mit­tances, ba­sic bank­ing ser­vices, among oth­ers.

Voice&Data: Which are the fac­tors that would drive mo­bile fi­nan­cial ser­vices in the near fu­ture?

Sharath Dor­bala: Cur­rently, 87.5% of mo­bile money trans­ac­tions glob­ally are ei­ther air­time pur­chases or P2P trans­fers. Mov­ing ahead, the ser­vices would be used for do­mes­tic or in­ter­na­tional re­mit­tances, util­ity bill pay­ments, Air­time top-up, DTH top-up, etc.

Voice&Data: What type of ecosys­tem is

re­quired to make mo­bile fi­nan­cial ser­vices a suc­cess?

Sharath Dor­bala: In the ecosys­tem, we are a tech­nol­ogy provider, when we are talk­ing about ecosys­tem we are talk­ing about let’s say from a branch­less bank­ing to a dis­tri­bu­tion net­work, where re­tail­ers, bank­ing agents, etc are in­volved that’s one.

Then, the next level of the ecosys­tem in­volves bring­ing in cash into the sys­tem, so gov­ern­ment, em­ploy­ers or any­body who wants to put money into the sys­tem plays a role there. Then you need an ecosys­tem re­lated to merchant pay­ments.

Once the cash is there in the sys­tem, the ques­tion is what do I do with the cash? Buy milk in a ki­rana store? Then you need all stores, ki­rana stores. All th­ese guys need to be the part of the sys­tem. So, they need to adopt the ser­vice and then once you have all th­ese things and you have peo­ple trans­act­ing more and they get to know about con­sumers more then you need to pro­vide loan kind of ser­vices then you need to have cred­i­tors and credit score rat­ing agen­cies, who can use all th­ese data and pro­vide credit points and you need to have loan or NBFI (non-bank­ing fi­nan­cial in­sti­tu­tions) who can ac­tu­ally lend, so var­i­ous re­tail­ers, gov­ern­ment, credit agen­cies, mer­chants have to be­come a part of the ecosys­tem.

Voice&Data: How far is In­dia from that kind of an ecosys­tem when it comes to mo­bile fi­nan­cial ser­vices?

Sharath Dor­bala: See, credit card ex­ists be­cause credit card com­pa­nies have built that kind of an ecosys­tem in In­dia. There are about 30 mil­lion cards in the coun­try to­day. So, peo­ple understand the con­cept, just like Paytm which cre­ated one ecosys­tem just to fo­cus on bill pay­ments. So, there are pock­ets of ecosys­tem which have been built.

The one that launches the pay­ment bank it is go­ing to be ag­gre­gat­ing all of them, it is go­ing to be making them part of the net­work, it will be in­te­grat­ing with all of them. So, there are pock­ets of ecosys­tem that ex­ists. Not ev­ery re­tailer ac­cepts credit cards nei­ther ev­ery ki­rana ac­cepts it, they need to be ac­cept­ing mo­bile pay­ment, some­body do­ing trans­fers through mo­bile pay­ments so they need to ac­quire part of the net­work. So, once the pay­ments bank comes in and they are go­ing to bring the rest of the folks also into the ecosys­tem.

Voice&Data: Do you think do­ing busi­ness in In­dia is a bit chal­leng­ing, keep­ing in mind the fact that a tie up with a pub­lic sec­tor lender is manda­tory for mo­bile fi­nan­cial ser­vices, Am­docs it­self has tied up with State Bank of In­dia?

Sharath Dor­bala: The cur­rent gov- ern­ment is one of the most pro­gres­sive. All it takes is the will­ing­ness to pursue the sys­tem and in lot of cases reg­u­la­tions act in your fa­vor. The main rea­son reg­u­la­tions ex­ist is to pro­tect con­sumers like you and me and that’s their in­ter­est.

Once we launch a ser­vice our mo­tive is to make the ser­vice more ubiq­ui­tous and make it more ac­cept­able every­where we need to have some rules here and there. For ex­am­ple some re­tail­ers to­day don’t ac­cept credit card trans­ac­tions for more than $25. That’s the limit they have. So, reg­u­la­tions ba­si­cally pro­tect the ecosys­tem, there’s no such sys­tem with­out a reg­u­la­tor you need a reg­u­la­tor, who can shape the ecosys­tem in the right way to pro­tect the in­ter­est of all the par­ties. And I don’t see any prob­lem in In­dia, it is in the process of giv­ing pay­ments bank li­censes too. Voice&Data: Busi­ness Plans…

Sharath Dor­bala: Our in­ter­est is to serve those ser­vice providers who want to pro­mote fi­nan­cial in­clu­sion. We have the tech­nol­ogy and ser­vices to in­te­grate into a model to help them launch ser­vices in the mar­ket. So, any­body who is in­ter­ested to pro­vide ser­vice then we have the ca­pa­bil­ity and ex­per­tise to do that. What we are say­ing to the prospects in In­dia is you launch a ser­vice, take care of the mar­ket­ing and cus­tomer adop­tion, we can pro­vide you the IT back­bone in­fra­struc­ture sup­port as we have the know-how ca­pa­bil­i­ties to pro­vide the sup­port.

Once the pay­ments bank comes in, they are go­ing to bring the rest of the folks also into the ecosys­tem

—Sharath Dor­bala Head of Sales, Mar­ket­ing and Prod­ucts-Mo­bile Fi­nan­cial Ser­vices, Am­docs

—Sharath Dor­bala Head of Sales, Mar­ket­ing and Prod­uct­sMo­bile Fi­nan­cial Ser­vices, Am­docs

About 70% of peo­ple in APAC (Asia Pa­cific) re­gion are not us­ing mo­bile fi­nan­cial ser­vices, with over 50% in In­dia hav­ing no ac­cess to a bank ac­count. How­ever, the mo­bile pay­ment mar­ket is ex­pected to reach over 450 mil­lion users with a trans­ac­tion value of over $721 bil­lion by 2017. In an in­ter­ac­tion with Voice&Data, Sharath Dor­bala, Head of Sales, Mar­ket­ing and Prod­ucts, Mo­bile Fi­nan­cial Ser­vices, Am­docs, ex­plains what ex­actly will trig­ger the growth of mo­bile fi­nan­cial ser­vices and how they will shape fi­nan­cial in­clu­sion in In­dia.

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