Moderator: Probir Roy, Co-founder & Director, Paymate : Worldwide mobile penetration at the moment is 3.35 billion which is twice the amount of television and Internet penetration and in India that is the second largest mobile market, the mobile sector is far bigger than the Television, Internet ,Radio and Banking sector. So it is really a pervasive and ubiquitous technology, and it is no longer a premium item but a must have like a watch or a bicycle and the proverbial third screen of the mobile handset has become the de-facto first screen by choice for all of us.
In the last ten years we progressed from using the mobile phone as just a voice device, to an information provider, then as an entertainment device and so it is only befitting that its final evolution should be of a payment device. It is already being used in this avatar in Japan, Taiwan, Korea, Malaysia, Singapore and Indonesia. In Japan 60 million people use the Felicia system to make mobile payments for shopping at departmental stores, buying flight tickets, as identification and for downloading content.
In India as yet when we speak about mobile payments we tend to associate it with mobile banking but it is more than that; it is any transaction whether it is remote or in-stored that is executed using a mobile it does not have to be related to a bank account. One can do point purchase, buy airtime, do person to person transaction, flow funds and in context of India it is a very important way to reach out to the non banking population.
So a mobile phone can easily be a substitute for an ATM or debit card, a prepaid card or cash with a great amount of flexibility. I believe for anything to succeed it has to have relevance and benefit for the user as well as the provider
Key characteristics of mobile payment in India
- Mobile payments are a wireless, fast moving product, or service, in short a benefit or convenience. In a similar manner to search engines, lifts or escalators that involve complex technology behind them but at the end of the day are just a convenience.
- There is no template for mobile payment anywhere in the world. It is something that needs to be tailor made for countries and regions. Perhaps in the same country different mobile operators may choose different technologies.
- Technology related regulation could never keep pace with the fast pace of risk that is innovation, consumer trends and progress. Therefore regulation has to have a light touch so as not to throttle innovation and yet serve public interest. As time goes on hopefully this area would evolve and become far more enabling for the stakeholders.
- For mobile phones transacting it is important that it must be compliant with Buckley’s first law of mobile payments. This law says that if the transaction process is more complicated than using the card or cash it will never succeed.
The three key drivers for mobile payments
- Ease of use and simplicity
- Cost effective
- Time and location independence
From the consumer perspective
- For today’s harried and hard-pressed consumers it would be a boon if they could pay their fees, instalments, payments etc. by their mobile phones.
- It serves the aspirations of a life style statement, and would give us the world literally at our fingertips.
- Nearly every wage earning person either has or will soon have a mobile phone but may not have a bank account or credit and perhaps he may not even need one. But the mobile provides a solution to this by providing access to information, entertainment, communication and commerce.
Suresh Anantpurkar, VP-Products, mCheck
Mcheck is a mobile payment solutions company that has launched its product with Airtel all over India and it can be used for payments and merchant commerce.
There are a few questions that come up when we discuss mobile payments:
How to bring every mobile owner into the mobile marketing solution?
Are the payment solutions going to be niche or mass oriented?
How can we make this a cashless society?
Creating a cashless society would have its own benefits for instance the cash handling cost would reduce drastically, the circulation of cash will stop and that may help in controlling the counterfeit currency trade.
The players in this ecosystem:
- Telecom operators
A system needs to be evolved whereby all the above players stand to gain.
Shekher Shrivastava, Vice President - Marketing, ItzCash Card: if mobile marketing becomes a reality it will probably be the most interesting phase for marketing because a mobile over IP would provide one with data whereby one can map the consumer’s behaviour in real time.
- It all about knowing the customer
- The payment method has to be secure and convenient
The biggest challenge for the three stakeholders involved, the operator, the banks and the payment solution provider is to create a model for payment and the revenue model will follow.
Traditional methods of marketing were based on the following customer details:
- Contact details
Amongst the above-mentioned stakeholders it is the operator who has the maximum data and the challenge is to leverage that. The other two stakeholders use the data only for CRM purpose and there is a lot of static element in that.
So if one takes Mobile over IP as an analytic tool along with the set of data, these will become parameters in real time an operator can map and one can change the status of these parameters from true to false.
If one can target a customer why cat one complete a delivery that is the confirmation of intention to purchase the product in the same medium. Today marketers advertise in newspapers because it is a physical medium and the delivery or confirmation of a payment also happens in a physical medium, once this can be translated to the mobile medium the marketing scenario can shift from demographics to something I call dynamographics.
Mobile marketing is nothing but converting your product into information and if the consumer can pay for the information through the mobile itself then one can consider the product sold.
According to me the future marketing departments are going to employ a dynamographer with them who will analyse the data according to the place and time data that an operator can provide them with and then engineer the correct brand fit to that data.
The main challenges:
What will be the partnership models? For this we need to know the strengths that each of the three stakeholders will bring to the table. At the moment the banks cater to the moneyed population where as the mobile can reach to the unbaked population too, so perhaps somewhere in between the perfect model can be found.
There is another model that is the UPSP model, where the unbanked customer is provided a solution that he can buy over the counter and then use the SMS as the checkout. These payment solutions have security because they have limited liability card and being easily available it is accessible.
If we can provide a three pronged model that can integrate with each other on the strengths, where a bank can provide the payment solution to certain customers, the operator can reach the last mile and payment solution providers can power the last mile and also provide payment solutions to the merchant which will be much wider than the bank or the operator. They can provide a solution for VAS beyond the airtime only then we can put up a