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
• Secure
• Speedy
• 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:

1. Telecom operators
2. Banks
3. Merchants
4. Consumers

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.
Marketing Tools

• It all about knowing the customer
• Payment is the end point of delivering a right product
• 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:

• Demographics
• Contact details
• Gender
• Age
• Interests

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 unified face towards the customer at a competitive price.

Ravi Shankar, EVP & Country Head - Cash Management and Direct Banking, Yes Bank:
The opportunities in mobile banking are:

• Reduction in the transaction costs
• Reaching people without a bank account
• Putting through payments from customers anytime and anywhere
• For the first time they don’t have to pay for the device in the customer’s hand, network, availability

The challenge before the first 100,000 transactions are done is that there is hue and cry over who owns the customer and the network. The third thing is a telecom network is being used to execute a banking transaction so who should be the regulator.

This industry is still full of lacunae that are not being resolved collectively, there is a lot at stake, a huge business model to be developed and valuations are at stake. The customer who is the point of discussion here is changing his banks, telecom operators and handsets at will, so how can we meet the challenge of loyalty.

As a banking sector we are very confused because at the end of the day a customer is not too bothered about technology unless it delivers

Niranjan Gosavi, Chief Marketing Officer, Atom technologies Ltd: Atom technologies started about three years back with objective of creating an infrastructure whereby people can use mobile for payments. We had a huge dilemma before us with various models in front of us like:
Phone driven
SIM card driven
Telecom operator driven
Banking driven
Application driven
So we offered a secure system of making payments to a cinema hall in Mumbai where a customer could buy tickets on the mobile phone by punching in his 16-digit credit card number, the expiry date and the CVV number. To begin with we sold about 20 tickets on the first day and now we are selling ten thousand tickets on a good weekend. As of now insurance companies, cable networks and telecom operators are also using this system of payment. So as long as this system continues to have secure transactions and no charge back this system will hold.

According to our internal calculations the mobile payment industry is 500-500 crore market in the next 2-3 years. The question before us is how this industry is going to proceed, are the payments going to remain non-application driven, which is easier but not secure or become java oriented that is totally secure but a lot more complex process.

Moderator: Probir Roy, Co-founder & Director, Paymate: The common strain in this discussion has been consumer, benefit and convenience.

We talked about Ap based models, non-Ap based models as well as interoperability, the question is, are they feasible and desirable?

Suresh Anantpurkar, VP-Products, mCheck: Like everything else a start has to be made and the end goal is that each and every consumer should be part of the eco system. In order to make this happen we will have to provide different types of services to the various types of customers, so whether it is ap based model or non-Ap based model will depend on the circumstances. Mtech is making sure that every customer who has a mobile phone on the network should be able to use the application either by downloading the application or by USD or by changing the SIM card. At the back end we will have to work with the banks to make that service available. Along the way there will be learnings that will have to be taken into

If I were to say that ap based models are more elegant, more secure and have a better track record world over, how do we in the Indian scenario where high end phones are not so common and not everybody is on the GPRS can we make this model pervasive and how good are we as people to navigate on ap based user interfaces?

Niranjan Gosavi, Chief Marketing Officer, Atom technologies Ltd: When we went across all the phones we realised that every phone has different requirements and levels of integration like Blackberry, O2 phones and the window phones. So if there has to be an application on the phone it has to be supported by the manufacturer. The handset manufacturers have to come in this space through a different channel called NFC. If an application has to be ported on the phone one will have to take into account only about 30-40% of the phones. Applications depend on whether they have push registry or not, whether it is sending out only intricate data through applications and receiving the response in the inbox. So it is very difficult to create an application-based model for handsets having said that we do have an application based model too. So this is something that will take certain time to evolve.

Ravi Shankar, EVP & Country Head - Cash Management and Direct Banking, Yes Bank: I have slightly different point of view, I as a consumer want to buy through my phone Rs.500 worth of grocery from a store close to my house and second a book on the web that may cost about Rs.5000 should I use the same application or different application for these two different transactions.

The way the consumers looks at the use of money or ease of money is very different from the way technology is offered to do the transaction. So it will be interesting to see as we collaborate within the industry what kind of applications we want to put on the phones. For instance in India we have a huge number of domestic migrants who need to send money back home, today this is being done physically through couriers, if this transaction were to be transferred on to the mobile phone; how easy it will be, what mechanism will be used and for what value then just driving it through a technology platform. The banker or the consumer want to differentiate what level of technology or sophistication they are using for which end result.

Suresh Anantpurkar, VP-Products, mCheck: Regardless of the kind of handset being used by a consumer, mobile payments should be as easy and simple as making a call. Secondly when mobile services were first launched in India a call cost about Rs.16/minute but that didn’t deter the operators from pushing the service, similarly in this case the service will have to begin from top down and with scaling it will soon percolate to the masses.

In terms of regulations, firstly all banking transactions have to be as per the banking guidelines defined by RBI and the telecom operator comes under the purview of Trai, therefore the entire line of transactions will have to go through the regulatory channel with RBI and Trai at opposite ends.

Ravi Shankar, EVP & Country Head - Cash Management and Direct Banking, Yes Bank: I think regulation is important to give confidence to the customer and all the regulations that have come through RBI have basically been to protect the consumer and to define an over all participative method for banks, technology providers and any other participant in the network. Both telecom operators and handset manufacturers have a significant role to play. The whole thing has to be approached in a manner of creating an eco-system so that a consumer at the end of the day does not find that his money has disappeared. So I would say that we get the first million on board and then move on from there.

Shekher Shrivastava, Vice President - Marketing, ItzCash Card: Regulator has a very important role and the biggest challenge is to create a model. Probably the regulators can come together and define their respective roles. As far as the applications are concerned I see an OS coming in to play that would be agnostic to any handset and payment mode. These tow things are bound to happen the time taken will depend on how serious the stakeholders are in getting their regulators to push for it.