A celebration of Republic Day in the land of miracles


Simply put, this is an important day for me.  I would not have been around but for India’s Independence followed 3 years on by our Republic Day, now in it’s 68th glorious year. My Dad wanted to bring free kids into the world and only married once this was assured. Although I will never truly understand what it meant to the generation who made this happen for us in 1950, every year we celebrate this day is one more year India proves itself to be a land of miracles.

The sense of pride this day invokes in a billion+ hearts is hard to describe. Let me just say I am certain it evokes a certain energy and a sense of fulfilment in every Indian around the world. The sheer diversity across so many dimensions, including language, religion, tradition, occupation puts the most glorious patchwork quilt to shame. So it is truly admirable that India has won and held the mantle of largest democracy in the world over all these years.

But the amazing story of India begins way before 1000BC, making the Constitution of India a relatively recent development. The river Indus after which our country was named was home to Harappan and Mohenjo-Daro civilisations and our two epics, the Mahabarata and the Ramayana relate to events of the Epic Age which was followed by the Maurya, Gupta, Moguls and other transitions, each leaving a unique legacy.

British Rule seems miniscule in comparison to all that went before. The date for India’ Republic Day was chosen to commemorate Purna Swaraj, the Declaration of Indian Independence on 26th January 1930. The Reserve Bank of India had already been established by 1935, and in 1938 we had the issue of the first Rupee banknotes shown below.


Thanks to the work of my father’s generation, the Rupee soon received a makeover. My generation and those to follow would enjoy the sailboat, dam, Asoka, the space craft (in 1976), the Parliament House, Mahatma Gandhi and many agricultural images. There is a nice site I found that shows a Currency Gallery of India, worth going through as it speaks volumes on how the country developed.



The Rupee had to wait until 2010 to gain it’s symbol ‘₹’. An historic demonetisation of ₹500 and ₹1,000 was achieved in November 2016, with redesigned ₹500 notes and the new ₹2000 banknote put in circulation. This and other measures are required in the rebalancing as the great country that is India asserts herself on the world stage.

India has arguably achieved one of the highest rates of progress towards digital payments over the last year. Let us not fool ourselves, working towards achieving all of this has been hard work and will continue to be so. What we have to be grateful for is that all that has been achieved has been within a democratic framework. This is nothing short of a miracle and on this Republic Day we look forward to money supporting the population so effectively that it ceases to occupy so much importance and becomes just the catalyst we can take for granted, to support over a billion livelihoods and the huge future India has ahead of her.


Jai Hind!

Addressing the mysteries of the Pyramid through mobile financial services

Pyramids have fascinated civilizations for centuries, with the Great Pyramid of Khufu in Egypt today remaining the only one of the Seven Wonders of the Ancient World. While the Egyptian pyramids are most famous, Nigeria, Greece, Spain, India, China, Indonesia and even Europe and the Americas have their share. The unique design and the sheer weight of the stone ensures that the structures do not topple, and there is no question of material at the bottom ever getting displaced. Now in these and other countries mobile financial services are taking off, to address financial inclusion. I was fascinated by C. K. Prahalad’s book “The Fortune at the bottom of the Pyramid” which has been an inspiration to me over the last decade I’ve spent as a practitioner in mobile financial services.

Carol Realini’s work at Obopay has also been inspirational to me, as I had an early opportunity to meet her and follow her achievements in the US, Africa and India. I was therefore delighted when Carol shared with me about the book she and Karl Mehta were writing, “Financial Inclusion at the bottom of the pyramid”. Naturally I wanted to share her story, below – Enjoy!


Carol, great to have you here today, please could you share with us a bit about what motivated you to write this book, and what you hope to achieve?

My interest in Financial Inclusion started in 2002 while travelling in Africa after a company I founded had a successful public offering.

My eyes were opened to—

  • The wonderful entrepreneurial spirit that exists throughout developing countries
  • The lack of infrastructure for participating in global online commerce
  • The lack of infrastructure for making day-to-day living easy. Locals were standing in line all day to just pay their utility bill and small businesses were confined to operating on a cash basis with their customers and suppliers.  
  • The absolute inability of entrepreneurs to scale and grow their businesses.

I became focused on fostering entrepreneurship and the development of new technologies that would empower everyone’s life and work.

The epiphany—

I had never really thought about life without access to affordable financials services. Mobile phones were everywhere and now exceed the world’s population. I realized this could be a game changer for financial services, creating a very different future for all of us. After witnessing the overwhelming poverty and unwieldy payment systems, I knew that mobile banking would be the key to altering how people exchange money, and in turn, create access to financial services where none had ever existed.

To whom do you feel this book will be most useful and why?

Our book primarily targets two audiences: Firstly the FinTech community, as the mobile phone is a key enabler for innovation. Secondly, really I would love for it to reach all people interested in how the world could change for the better. We hope that our book entertains and informs both audiences. It delves deep enough to share new insights with the FinTech community, yet effectively explains the financial services landscape to those who are ready to learn and be inspired. So far reviews have been very positive from both groups. Having been exposed to real-life case studies that are changing the face of financial services, readers from all over are inspired by the global shift that lies in front of us.

You are yourself one of the pioneers, can you share a bit about your story?

2authorstogetherI have founded two companies within the Financial Inclusion sector and I am an active board member for several other companies working in mobility and “mass-market fintech.” My co-author, Karl Mehta founded a global payments company which was later sold to Visa. Throughout that transition he was key mobility executive and now is an active Venture Capitalist  and Founder/CEO of EdCast— a disruptive approach to higher education.

My first company, Obopay was a pioneer in Financial Inclusion and is currently one of the leading providers of mobile money in East Africa. We were early to enter the market and saw first hand the challenges when the infrastructure for identity, settlement, and communications was immature.

Mobile phones are now a mainstay all over the world and many countries in Asia and Africa have sorted out regulations to handle incoming technologies. Smart phones are also scaling very fast, creating more space for innovation.

Once the technological and regulatory landscape was primed, my second company (a US-based faster payments company) scaled quickly and was acquired in under 2 years. I am now on the board of 5 companies all working in this space and help others wherever possible.

In a nutshell, what do we need to get right, for financial inclusion @ BoP to become a reality?

Regulations and infrastructure are key to massive change. Institutional banks and investors also need to embrace innovation. Opening our eyes to including innovation from unexpected places will create more opportunity (for instance, Telcos have become the last mile to the customer for banking). Finally, considering new players in the space with disruptive models can bring a new perspective, and sometimes, a better solution to a problem.

At the end of the day, the financial needs of those at the BoP will not match those who use traditional banking. We need to create products and services that are relevant to each customer and their lifestyle. These will look and behave differently across countries, states, towns, and villages.

We hope our book helps to open the reader’s eyes to what is possible, what is currently working, and where there is opportunity for change. It proves that solutions DO exist—they are just not evenly distributed.

You give a call to action at the end of your book, could you share a bit about this?

If you are inspired to change the world, it is easy to get involved. You don’t have to quit your day job or be a “mover and shaker” within the FinTech community. If every reader made one small shift in their lives to support financial inclusion (start a group, show a preference for companies who are committed to financial inclusion, or join the conversation @SuccessatBOP), we’ll be well on our way to a better place for all.

I have found that once readers realize they already have a voice, they become inspired to create change, whether by one simple action or through massive effort. Either way, I think the book shows how important these initiatives can be. As Jeffrey D. Sachs, Director of the Earth Institute at Columbia University (and generous author of our Foreword) puts it: “The end of poverty is coming our way and this brilliant book explains how and why.”

Carol, Who are the unbanked and could you share about “Financial Nomads”, something I found very interesting when I read your book

Half the world are Financial Nomads. The world population is roughly seven billion. Of these, 4.6 billion are aged twenty or older. They comprise the pool of adults who could be regular customers of a financial services provider—a bank, savings and loan, credit union, or even Wal-Mart. Estimates suggest that of this eligible pool of 4.6 billion adults, over half—2.5 billion—do not use an established and reputable financial services provider. They are financial nomads who either have no access to financial services or use financial services on a casual basis when they need them.”

Apart from income, what are some of the other factors that have an impact on financial inclusion?

Gender, education levels, age, rural or urban life - all of these matter, but especially gender. In developing economies, forty-six percent of adult citizens have bank accounts, but only thirty-seven percent of women do—and this number includes joint accounts held by both husband and wife. In developing economies, this disparity exists at all income levels. In high-income economies, the difference is less and only approaches a four percent difference for poor women.”

Carol, how does this affect me, a middle class individual living in a developed country?

The lack of affordable and adaptable banking services is an issue that should concern everyone, not just the people who are living at the bottom of the pyramid. At its worst, a lack of banking creates a downward spiral of disenfranchisement, widens the gap between rich and poor, encourages outlaw or extralegal behaviour, and inhibits the social mobility that keeps any society vibrant and open. An accessible and reliable banking system helps to create stability and overall prosperity.

We have seen the costs to living at the bottom of the steep pyramid, and the obstacles that keep many hardworking individuals and families from making the long climb to the top. However, the goal of this book is not only to point out the challenges but to draw attention to the real-world solutions that exist today.

How far have we come so far in addressing this issue?

We’ll see that, in many cases, the future is already here; it’s just not equally distributed yet. Innovation is emerging as a patchwork. We’re entering a new era where the world will see a shift from incremental advances in financial inclusion to exponential growth. Part of the revolution in personal finance is driven by global social change: the growing empowerment of women, the rise of stable democratic governments, and the increased recognition of basic human rights. Technology is also a major force; the rise of the Smartphone, improvements in banking infrastructure, cloud computing, social networking, the management of vast amounts of real-time and archival data, mobile technology and networks, and the successful scaling of regional models to national and international scale - are all drivers of change.

Carol thanks so much for taking the time to address this important area and I wish you the very best for the success of your book and this key initiative


Carol Full Avatar

Carol Realini is co-author of “Financial Inclusion at the Bottom of the Pyramid”. An expert in financial service innovation, Carol Realini is a serial entrepreneur and globally-recognized technology pioneer. Attending the World Economic Forum, she led global discussions on alternative banking. Recognized as a top woman in Silicon Valley, she sits on boards and advises financial services and mobile companies.

Trends in Payments in India – from the eyes of the leading merchant acquirer


Today we are with Nitish Asthana of First Data, who provides insights on the fast moving payments scene in India, at this historic stage in the move towards non-cash payments. In this exclusive interview, we touch on key changes that could transform the card industry, and discuss a broad range of topics including E-tailing, Modern Retail, POS and the advent of mobile payments. Nitish shares four major trends that are transforming the way 1.2b consumers pay, as well as creating new opportunities in merchant-to-merchant payments potentially worth over $20b.

 india shopkeepers 1 so

Thanks for taking time out from your busy schedule Nitish! As context please could you share a bit about yourself and your role at First Data?

I am the VP & Head of First Data India Ventures and have also led First Data’s merchant acquiring business in India. At First Data India ventures, we focus on venture investments in POS, e-commerce, mobile commerce and digital payments.


First Data is the global leader in payment technology and services solutions, operating in over 70 countries with relationships with over 3,500 Financial Institutions and offers a range of services including POS, E-Commerce and mobile (on internet and POS).

In India we are one of the leading merchant acquirers, providing services to over 250,000 merchants. First Data operates through an alliance with ICICI Bank (India’s largest private sector bank), ICICI Merchant Services. Our two lines of business are Merchant Services and Issuing. We offer POS, online, mobile and merchant processing and settlement for a broad range of consumer and business payments. Our issuing platform business runs on VisionPLUS, a First Data product and powers our service to leading banks in India.


Nitish, from your key perspective, which market segments seem to hold the most promise?

Activity in the payments space crosses a wide range of transactions across a set of vertical and horizontal segments.

In terms of vertical segments, E-commerce and especially E-tailing (Retail Sales on the Internet) is really important for us. Travel booking on the internet is already heavily penetrated, covering almost 100% of bookings and accounting for 75%-80% of online payments but this is fast reducing to 55% as online payments for retail, telecoms, utilities, insurance and tax take off. We also talk about point-of-sale (POS) as a vertical, within which Modern Retail is progressing very well, growing from just 5% of retail to 20% by 2020.

In terms of horizontal segmentation, large merchants of the country have already progressed in electronic payment, but today we see a lot more opportunity with small stores that accept only cash.

Overall in the market today card payments is a very small market as compared to US, UK, Australia and others but we expect 25-35% growth over the next few years.


The overall economic trends are also looking up?

Certainly, if you look at GDP growth, positivity is back! We are looking at a 7.5% growth in GDP expected to be the highest in the world.

A bigger driver for electronic payments is that currently over 90% of retail payments are in cash. The Government vision for less-cash is expected to bring out specific exemptions. Some are likely to relate to tax incentives for merchants and consumers to pay electronically.

If that happens, what is expected to be a $150b card industry over next 4 years could be pushed 50% higher going up to $250b-$275b by 2020. This would be much higher than current estimates, and we would reach an inflection point sooner with this planned government intervention.


What about the progress of Aadhaar-linked bank accounts and other key enablers?

Aadhaar has been an incredible journey with millions of customers enrolled. This received a massive boost from the launch of the Pradhan Mantri Jan Dhan Yojana (Prime Minister’s Benefit Fund) launched a year ago. It has created the rails to transfer benefits from the government, for instance LPG and fertilizer subsidy. NPCI recently confirmed that over 150m bank accounts have already been linked to Aadhaar numbers. All 170m beneficiaries were to be brought under the program by June 30, 2015. Banking inclusion has been greatly enhanced.

Regarding debit card infrastructure, India now has over 560m debit cards. Credit cards have been leading in the last 25 years, but debit cards are a more recent development. 60% of payment volumes are on credit cards despite them being fewer in number. The story so far was around credit but will be around debit cards going forward. I expect the ratio to reach 75% debit to 25% credit in terms of payment volumes.

In short we have a number of key enablers working together: the Aadhaar system enrolling people into electronic id, the push to mobile banking for the unbanked, the push to bank accounts, the roll out of debit cards and new POS infrastructure.


Could you please explain India’s position on merchant infrastructure?

In terms of a high level snapshot on merchant acceptance infrastructure, India has about 15 million merchants of which only 1 million accept cards. This is why card payments traction is so low. The barrier to acceptance is that terminal infrastructure is expensive, at a cost of around $150 - $200 per terminal. At this level return on investment on new terminals is difficult to justify. We have focused on bringing down the cost of a terminal to $25-$30, through the use of mobile POS. When you look at the last 8-9m merchants, mobile to mobile payments without infrastructure is the way to go.

POGO1First Data has launched our Pogo solution in July 2014, deployed at smaller merchants. At current take up levels the price point is higher but merchants do not pay upfront, we recoup the cost from on-going payments.


Could you tell us about the new services you launched recently?

We are one of the leaders in E-Commerce payments and operate across a number of categories. To simplify customer experience we are looking to launch our revamped internet payment gateway which would also work from mobile phones. Universal payment options also cover internet banking, integration to wallets, EMI products, payment in home currency and seamless plug in to all shopping carts and a mobile optimized interface as well. We are looking to launch this in next 2-3 months.

We are also adding a number of features to our MPOS launched last year. At that level of transactions we can simplify documentation for a merchant to quickly come on board. We’re launching a product for payments and other applications such as ERP, accounting, loyalty and a hardware/software.

Essentially small sized retailers have not invested in counter top infrastructure. Some may have PCs, some may not even have that. What we want to provide is a package deal for a small player by “miniaturising” the functionality used by large merchants: ERP, bar code reader, printer and other features. We believe that addressing the needs of small merchants is of great importance.


How about merchant to merchant applications and do you have estimates on how much the India B2B market is worth?

If you look at B2B, that too is very interesting for us as we address cash and carry. In India the market includes stores such as Walmart and Metro Cash and Carry. We’ve done a prepaid program, also a credit card with limit, accepted by closed group of retailers. Other interesting opportunities are around travel, for low cost airlines to sell their inventory and enjoy more card acceptance. The third interesting area is procurement that can help both parties optimise working capital.

Our own best estimates for the size of the B2B market is $15b to $20b of available market across the country.


How has the Indian payments market changed over the last year?

The first major trend has been the move from credit to debit. In the past cards were used more for discretionary expense, now the trend is towards non-discretionary, as consumers use cards instead of cash in their wallet. Supermarkets are adopting cards and issuers have provided a lot more debit cards.

Secondly, it is contactless. We were the first to introduce contactless terminals. For small value transactions, you can now tap and go. I believe Contactless could be very important going forward.

The third trend is mobile especially through mobile internet. India has 900m mobile phones and 300m smartphones, growing to 500m. People prefer to shop on their mobile rather than using their laptops or PCs. This is higher even than the US, and considering how important the Indian market is apps are being rolled out and payment systems are evolving fast. Mobile optimised pages and plug-ins are being rolled out. We expect this market to reach $35 million.

The fourth major trend has been the growth of our local network, RuPay, similar to China UnionPay. In the past Visa and MasterCard held dominant positions in India, but issuance in the last 18 months has changed things. NPCI RuPay has issued a huge number of cards and will play a very important role as all the new bank accounts use RuPay.


How important will the physical card be in India?

I think plastic cards will continue to be very relevant in the near future. Mobile wallets have not been adopted as fast as hoped and have been around prepaid rather than card in store.

I believe however that the form of plastic will change though, with more Chip & PIN EMV cards being rolled out as we speak.


Do you have any idea of the number of contactless cards and terminals?

I’d say terminals accepting contactless cards are in the region of 20,000-25,000. Also, if you talk to top acquirers, they’re all talking of deploying a large number.

We expect pretty much all of our new deployments to be contactless this year. Over 80% of the transactions on POS are less than $30 and could qualify as contactless. Some categories would go better, for instance super-markets and transit.


Transport has not come up as much as it could, do you see this changing?

A number of metros are leading in the investment in tap and go. Toll is not yet integrated and as it is not interoperable it means that people cannot yet buy prepaid. With regard to Prepaid, services Mobikwik offers card payment service for Android and iOS users and now supports paying for Uber.

The form factor of cards will change, as this increasingly moves to Chip & PIN and contactless rather than magnetic stripe as the price of contactless terminals is not that much more.


What significant changes are likely in the way people pay in India over the near future?

We are keen to look at in particular in terms of how government participates. Deploying acceptance infrastructure and now systemic incentives will help non-cash payments to reach tipping point.

Everyone understands the cost of cash. The goal is to get people to prefer electronic payments over cash. However affinity to cash is too high and must be broken. Government incentives made available to all, including merchants, consumers, acquiring banks and others, will help to lower costs and promote adoption.


Nitish, thanks for sharing your insights with us. I wish you the very best for your initiatives as India continues to adopt non-cash payments at this unprecedented pace.


imageNitish Asthana is the VP and Head of First Data India Ventures, focused on venture investments in POS, e-commerce, mobile commerce and digital payments. He has led the merchant acquiring business for First Data- ICICI Merchant Services (ICICI MS) and had overall responsibility over ICICI MS revenue lines across the company’s POS and Ecommerce businesses, acceptance and acquiring product solutions, sales, business development and marketing.


LIviewport_india_2014 For more information on “Digital Money in India”, Shift Thought’s unique 360-degree coverage of the Indian payments scene, or to gain access our self-service portal with the latest knowledge on the ecosystem, initiatives, regulations and more,  just email us at contact@shifttthought.com.

Bill payments in India: Set to transform with the advent of NPCI BBPS


As a country of 1.2 billion people undergoes massive transformation in the way people pay, an organization central to this change is The National Payments Corporation (NPCI) . NPCI is a body promoted by RBI to play a pioneer role in creating the infrastructure and platforms to enable retail payments in India, and manages core payment systems including the instant 24*7 interbank funds transfer service IMPS, the Aadhaar Enabled Payment System (AEPS) and RuPay India’s important new card payment scheme.

I caught up with Sumeet Kohli of the NPCI to discuss some of the recent changes. In this interview we discuss a bit about the payments scene in India and in particular how people are changing the way they pay bills, as this is a very important area that is set to transform in the near future.


Sumeet, thanks for your time today. Could we start with a bit of background about NPCI and your role there?


At NPCI, we manage multiple aspects of payments in digital format. The vision of NPCI is to provide anytime, anywhere payment services which are simple, easy to use, safe, and secure, fast and also cost effective. We have multiple payments products.

To begin with RuPay is a new card payment scheme launched to fulfil RBI’s vision to offer a domestic, open-loop, multilateral system. It will allow all Indian banks and financial institutions in India to participate in electronic payments.

Secondly Immediate Payment Service (IMPS) offers an instant, 24X7, interbank electronic fund service through the internet.

Also, the ACH is launched in India under the name National Automated Clearing House for banks, financial institutions, corporates and the government. It is a web based solution to facilitate interbank, high volume, electronic transactions which are repetitive and periodic in nature.

Inter-bank ATM transactions are managed through our National Financial switch (NFS) and we  have host of other products such as the Cheque Truncation system, Aadhaar Payment bridge system and Aadhaar enabled payment system.

My role is in the business development department. I am in charge of national accounts and I engage with our customers which include corporate clients, government institutions, banks spread across India. We assist them to get on-boarded on the NPCI platform, so as to avail of our products and services.

Today the majority of banks in India are already on our platform and this helps them to reach out to end customers with a variety of payment offerings, helping them transact affordably & easily.


Could you please share about some of the opportunities and challenges you see, from your ringside view of developments in the important Indian market?


Regarding the Indian payments landscape, the buzzword is “pro-digital”.

There is a paradigm shift in how people are transacting. Interesting with over 900+ million mobile phone subscribers in the country and the advent of new age technology such as 3G and now 4G, mobile internet has reached the nooks and corners of the country.

It is a powerful tool that helps to generate traffic online and move offline payments online. Regarding utility payments that form the majority of retail payments today, over 80% are still cash, COD or cheque based. Ecommerce merchants and corporates are promoting online payment services in order to get consumers to adopt. They are offered monetary benefits, schemes and loyalty benefits to get them to make payments online. So this is creating a pull and a monetary incentive, apart from the convenience it offers.

The reason providers can pass on benefits is that offline collection is expensive in countries like India and it also delays the entire settlement cycle.

Promotions do get people online, no doubt about that. However there is a long way to go until we become completely cashless. These initiatives and the approach adopted by the government with the direct benefit transfer scheme and RBI’s vision and efforts are definitely driving India towards a less-cash society.


I saw final guidelines have recently been released by RBI for Bharat Bill Payment System (BBPS). Could you tell us a bit about this?


Yes, as per the RBI guidelines NPCI will function as the authorized Bharat Bill Payment Central Unit (BBPCU) to set the standards for BBPS processes which need to be adhered to by all operating units under the system. NPCI, as the BBPCU, will also undertake clearing and settlement activities related to the BBPS as outlined in the RBI guidelines therefore, a need for an integrated bill payment system in the country that offers interoperable and accessible bill payment services to customers through a network of agents, allows multiple payment modes, and provides instant confirmation of payment. The bill payment system should also serve as an efficient, cost effective alternative to the existing systems, thus, setting the standards for bill payments in the country, and enhance consumer confidence and experience.




The BBPS will consist of two types of entities carrying out distinct functions:

(i) Bharat Bill Payment Central Unit (BBPCU) will be the single authorized entity operating the BBPS. The BBPCU will set necessary operational, technical and business standards for the entire system and its participants, and also undertake clearing and settlement activities.

(ii) Bharat Bill Payment Operating Units (BBPOUs) will be the authorised operational units, working in adherence to the standards set by the BBPCU. The tiered structure could be further strengthened through an effective agent network/s of the BBPOUs.

While there will be a single BBPCU, there could be multiple BBPOUs operating under the BBPS.


What do you see as the biggest challenge to overcome to get this off the ground?


This is a vast ocean, with the involvement of multiple players such as the NPCI, banks, aggregators, technology vendors, service providers and billers. This is across locations and various channels which must support online bill payments as well as offline. Also there are on-us and off-us use cases and it will require huge efforts to integrate and operationalize everything. It will also require focussed marketing efforts so as to make the public aware of what’s available and the benefits of using the new services.


As more mobile phones get linked to bank accounts I expect services such as this will grow increasingly popular?


Sure. In India we have over 900 million mobile phones and thanks to the PMJDY scheme (the Government’s push for financial inclusion), bank account penetration in India increased from 35% to 53% between 2011 and 2014. NPCI sees a possibility to get many more people to link their phones to bank accounts. It will take some time but we are definitely seeing volumes going up. As the mobile phone network grows in each corner of the country this is penetrating into remote areas and into rural India.

One of NPCI’s product IMPS has now become channel agnostic and hence has been renamed to “Immediate Payment Service” instead of “Interbank Mobile Payment Service”.


That is the fundamental reason we set Shift Though up as “Digital Money” rather than “Mobile Money”, and it is how you have grown, leveraging mobile, but not just stopping at mobile phones.


Exactly, today banks offer IMPS as an instant mode for fund transfer. There is no need for customers to check if the time of transaction is within banking hours to pay for their bills or make purchases or simple transfer money. In the manual process, if the bank settlement cycle is complete you may have to wait for next cycle or may be try alternative offline payment mode. With IMPS being available 24*7*365 one doesn’t have to wait. You can go right ahead and complete your bill payment in real time, from the comfort of your home.


How do you see it going forward? In our report on India we classify it as one of the most complex markets in the world. Do you see India to be at an inflection point, about to take off?


Absolutely, both India & the Indian economy are at an inflection point of sorts, both in terms of moving to a higher growth trajectory and with respect to the shift to a sustained low inflation phase.

The main driver for any new innovation in payments is customer needs and customer behaviour which drives service offerings. Today Indian customers are set to have so many different options to support how they may want to pay.

Some customers prefer to do only mobile shopping or some do POS transactions at merchant terminals or in malls. Others do online window shopping yet make payments offline and vice versa. These are interesting dynamics.

It is the right time to be here, as customers are adapting their behaviour to new, easy and convenient options. Even in offline mode, there are so many VAS options provided like door-to-door services. For payment of bills there would be service providers whose agents will come to your door to swipe your card, collect cash/cheque and enable your payments. So we realise we must take all this into account as our payment systems evolve!


Sumeet, thanks for sharing your thoughts at this exciting time of huge change and all the best for your important work at NPCI where you play a critical role in making this happen!



Sumeet Kohli is Manager, Business Development at NPCI, India. Sumeet handles Business Development & its strategic roles for enabling Payments for National Key Accounts across Industry verticals like Banks, Insurance & Mutual Fund companies, NBFCs, Utility Companies, Telecom, Trust, NGOs, E-commerce merchants and Corporates.

His overall experience covers various payment modes including NACH, ECS, Online Payment Gateway, Direct debit, IMPS, Mobile Payments, IVRS, CTS, EBPP, NEFT/RTGS, Cheque & Cash Management.




Shift Thought’s recent 400 page report, “Digital Money in India 2014” covers all this and  more. To learn more about our report just drop us a line at contact@shiftthought.com.






Citi’s view on being a global digital bank


Today I am delighted to share highlights of my interview with Aditya Menon, Managing Director, Digital Strategy at Citi. Citi is one of the largest banks in the world and has long been at the forefront of innovation.

Aditya Menon explains why the bank, already known as the world’s leading digital bank is focusing now on simply being the best bank, backed by the power of technology. We learn of the journey over 2014 and how this is likely to further play out over 2015.




Aditya, I am excited at this opportunity to benefit from your deep knowledge on trends in global digital banking and especially delve deeper into developments in the US and India markets. Could we please start with a bit of background about your remit and the deep experience you have in payments?


As Managing Director, Global Digital Strategy at Citi I work on Citi’s global digital strategy for stakeholders in our consumer bank including card and Citi retail services in the US.

We do 3 things for our internal stakeholders. Firstly we assist them to formulate their digital strategy, particularly on payments, commerce, capability and technology. Secondly, an area in which I am most involved in is informing on the digital capability we need to grow and compete with banks and non-banks. Thirdly, we define and drive alignment around key strategic initiatives including key digital metrics and KPIs – both internally and against competitors.


Citi plays so many different roles around the world in Corporate Finance, Retail Banking, Investment Banking and more. How does your digital strategy support all these areas?


There are three key strategic imperatives for us to deliver on:

  • Firstly we must be Customer Centric and from a digital perspective this requires that we track metrics such as net promoter score, to recognise and reward the segments we want to serve with valuable personalized services.
  • Secondly this must be Globally Common. Globally, we serve approximately 200 million client accounts and operate in more than 100 countries. The challenge we address is to deliver globally common services across all these markets. For instance, taking the example of high net worth individuals, they do have certain globally common needs that we identify and help address.
  • Thirdly, it is about being Digitally Connected and creating digital partnerships. We see financial flows are digitising and we need to be in the middle of those flows, to drive greater access to our core products through digital channels and strategic partnerships.

For each of the three areas we have launched initiatives that help us to further enable our core business, go beyond the core and finally, drive innovation by creating disruption.


What led you to select this digital strategy for Citi?


At Citi we studied how digital disruptions eroded value across multiple industries including news, travel, video, music and advertising. Across these industries we found that over 10 years there could be a substantial market share shift. If we take year zero as being peak of physical manifestation of an industry, we saw a typical trend play out for each. An initial gradual decline was followed by an inflection point between year 2 to 4 and then a rapid transition from physical to digital.

In most of these industries the disruptor was not one of the incumbents. In most cases the total revenue of the entire industry declined over time due to disruption and commoditisation and revenues never really returned to the earlier peaks. This is interesting as it means that fewer players at end of year ten have to share a smaller pie and a number of incumbents make a loss.

Extrapolation to US retail banking made it clear to us what strategy we had to adopt.

We then extrapolated to see what this could mean for the US retail banking industry. We expect to see a substantial share shift over 10 years. Looking at payment and retail banking industries separately we expect retail banking to see even more disruption than payments in terms of value.

Our conclusion is that over 10 years the laggards could lose a major share of their revenues and profits, while leaders will gain moderately. So clearly it pays to be a leader, and as a laggard one could get into a vicious cycle which takes you down a point of no return.

We concluded that Citi must therefore rapidly enact a strategy that would help to best position our bank with respect to the digital disruption trends across the world.


What are some of the important ways this strategy was enabled by Citi in 2014?


Our strategy of globally common enablers has led to the launch of our award-winning retail banking mobile app that we deploy globally. In the area of corporate banking our Citi Velocity digital platform is the world leading FX trading app in terms of volume and value. We also have CitiDirect BE Mobile, which allows our corporate treasurers to use our payments infrastructure to complete payments anywhere.

With respect to driving disruptive innovation, we have brought out the Citi Wallet in partnership with MasterCard. We were also one of the first banks to launch with Apple Pay. The strategy played out in many ways across the world. For instance we launched a contextual offer and wallet platform in Hong Kong that went beyond the ordinary, to create contextual experience using location based services.


I am curious, considering Citi’s size and global footprint, how do you still manage to achieve high levels of innovation?


We place a lot of importance on innovation through a number of initiatives, of which one example is our Citi mobile challenge initiative.

Our US challenge in December was a great success and we just kicked off the same challenge in EMEA.

We have already got innovation labs set up around the world and the work there feeds into our business of crafting new services for the future. For instance our innovative work with our API opens up transformative potential through third party development.


Over 2014 what were some factors blocking the progress of money going digital?


This has continued to be a time when financial institutions must transform themselves in line with the demands of the economy and to support evolving consumer needs. This involves considerable rebalancing within the business.

Regulatory pressures and the need to balance AML requirements and security against innovation and superior consumer experience continues to make this process challenging.


From Shift Thought’s recent work in India we identify it as one of the most complex, yet promising markets for digital money. Please could you share your thoughts on this?


In the Indian market the regulator helped to create clear and transparent regulations for mobile banking, prepaid and agent banking. To my mind we have the clearest set of regulations that exist for digital payments and money anywhere in the world.

Although early services did not take off as the initial players in this space found it hard to sustain repeat usage as customers had no way to cash out But more recently, after giving banks and nonbanks a chance, what has lifted off well is the NPCI IMPS project. There has been steady growth in mobile-to-mobile payments.


What has worked well for India and what are some things the market may not have anticipated?


Perhaps one thing unique to implementation in the Indian market that was a unique requirement, but turned out to be a bit of a sticking point for adoption, is the centricity and early introduction of MMID. To my mind this could be the biggest barrier to adoption, a point I’ve raised in public forums recently.

Regarding unintended consequences, one interesting trend we’re observing is the use of the services for cash to bank account transfer. Consumers are starting to give cash to the banking agents who help to deposit this into their accounts. This use case is seeing a huge volume and value traction over NPCI rails.


What is the key development you expect in India over 2015?


Earlier in 2014, regulators asked for a new kind of institution to be created, that of a payment bank.

Alternate networks did not really work so this new type is expected to greatly help in getting subsidy programs and other important initiatives off the ground. This requires the creation of a massive number of bank accounts through a business model that works with lean 1% commissions to offer services to people who may be on or below the poverty line.

Half a dozen payment banks could be created in the near future and a number of telcos have applied for this. Under this new scheme payment banks will be permitted to operate savings and current accounts but will not be allowed to lend, thereby opening up the possibility of partnerships with scheduled commercial banks.


Aditya thanks so much for taking the time to so generously share with us your thoughts and findings. I have personally benefited so much from these discussions with you over the years and I take this opportunity to wish you every success in your plans in 2015 and beyond.


imageAditya Menon is Managing Director, Global Digital Strategy at Citi.

A pioneer in the field of payments and a true entrepreneur, Aditya has helped to shape mobile payments through his work at Obopay and Yes Bank Ltd. Aditya is hailed as a visionary leader who can inspire teams to deliver their best.




Why markets tumbled today on Global Economic Prospects report


According to the Global Economic Prospects annual report from World Bank just released, growth in 2014 was lower than expected. Global growth is expected to rise moderately to 3% in 2015, while high-income countries will see a smaller growth of 2.2%. Developing countries fare better with a 4.8% increase.


Having just studied the report I thought I should share highlights to help explain why today Asian markets sank in early trading, copper prices fell and shares plummeted across Europe. Markets reacted to the World Bank’s decision to cut its economic forecasts for this year and next, in the Global Economic Prospects report just out.

Global trade has been weak in post-crisis years, growing less than 4% a year during 2012-2014, well below pre-crisis average annual growth of around 7%.  Major forces driving global outlook include:

  • Soft commodity prices
  • Persistently low interest rates and divergent monetary policies across major economies
  • Weak world trade

Recovery in 2014 in high-income economies was uneven. As many high-income grapple with fallout of global financial crisis, USA and UK have exceeded pre-crisis output peaks. The Euro Area and Middle-income economies face structural slowdown but low income economies are expected to enjoy a more robust growth.

Since mid-2014 the sharp decline in oil prices helps oil importing developing economies but dampens growth prospects for oil-exporting countries.


In the graph below I show last year’s forecasts in the dotted lines and this years (just released today) in solid lines. It is clear from this why markets reacted badly to the latest forecasts that show lower than expected figures across both high income and developing countries. Global growth is expected to rise moderately to 3 % in 2015. However high-income countries are likely to have a smaller growth of 2.2%. Developing countries will fare better i 2015 with a 4.8% increase.




The slowdown in global trade has been driven by cyclical factors such as persistently weak import demand in high-income countries and structural factors such as the changing relationship between trade and income.


Countries show divergent growth rates

But how does this potentially impact on your market selection plans and strategy for this year? In the chart below I’ve shown the projections for key countries, with estimates for 2014-2016 annual percentage change in GDP.


To my mind this further calls into question the BRIC categorisation we use to describe emerging markets. Jim O’Neill of Goldman Sachs first used this term in 2001 to describe a group of countries that expanded rapidly in the 1990s. Today though, these countries increasingly show very different growth trajectories noted by some experts recently, and as I see exhibited in their recent economic profiles.

While in 2016 both India and China are likely to have a 7% percentage change in Real GDP, China arrives here on a decline, while India works up to this. India is expected to show a steady increase while a  “disorderly slowdown” is expected in China. Brazil faced a steep decline in growth due to declines in commodity prices, weak growth in major trading partners, severe droughts in agricultural areas, election uncertainty, and contracting investment. Recession in Russia further distances this country from the BRIC group. Activity slowed to 0.7% in 2014 with on-going tensions with Ukraine, sanctions, falling crude oil prices and structural slowdown.




Growth in Europe and Central Asia slowed to a lower-than-expected 2.4 % in 2014 due to slow recovery in the Euro Area and stagnation in the Russian Federation. In contrast, growth in Turkey exceeded expectations despite slowing to around 3.1 %.

Geopolitical tensions, currently concentrated in Eastern Europe, the Middle East, and, to a lesser extent, South East
Asia, could rise in the short- and medium-term. In low-income countries, growth remained robust at about 6 % in 2014 attributed to rising public investment, robust capital inflows, good harvests (Ethiopia, Rwanda), and improving security in a few conflict countries such as Myanmar, Central African Republic and Mali.


Remittance flows still resilient

The good news is that remittance flows are expected to continue to exhibit a much welcome upward trend. As the risk to private capital flows to developing countries increases, the relative importance of remittances continues to grow. World Bank notes that during past sudden stops, when capital flows to developing countries fell on average by 25%, remittances increased by 7 %.

The forces driving the global outlook and the foreseen risks pose complex policy challenges according to the World Bank.  Developing countries face major challenges. For one thing monetary and exchange rate policies will need to adapt as conditions return to normal. They also need to implement structural reforms to promote job creation. This is expected to help mitigate long-term adverse effects from less favourable demographics and weak global trade.


More detailed analysis of the latest economic prospects for each country and region is available in our “Digital Money in 2015” country reports. Drop me a line at contact@shiftthought.com if you’d like more information. The full Global Economic Prospects report and other resources are available at the World Bank website.

A navigation guide into one of the most complex markets for Digital Money in the world


Focus on India Series : Having recently completed our in-market analysis of the emerging payments market in India, I’m confident in saying the country represents one of the world’s most complex, yet promising, battlefields for digital money. India is poised on the brink of a huge economic transformation and making money digital is a crucial part of the solution.



Digital money has a tremendous future in India, and I see a convergence of several factors that combine to create an unstoppable wave. Yet for this country of over a billion people, of which May 2014 World Bank estimates show 179.6 million live below the poverty line, money is going digital in a variety of ways and the savvy providers need to recognise this in order to make their business models work.




India’s Demographic Dividend

Even when services are designed to appeal to the under-banked, providers cannot take their eyes off India’s rapidly growing, massive and youthful middle class. Even if one assumes only 30% of the population of India’s population of 1.2 billion is reachable, this is still a sizable 360 million, considerably larger than the 5.4 million population of Singapore and 7 million of Hong Kong, for instance. By 2015, India’s middle class is expected to be in excess of 267 million. What is more interesting is the trajectory, as the size of the middle class (monthly household income ₹ 20,000-100,000)  was a mere 25 million in 1996.


Precipitating Factors

I grew up in India, travelled around the country for the introduction of MICR and worked with RBI, SBI and several banks in India to help computerise different areas of banking, in my early work at Wipro and my own company Visionix. More recently I have personally visited the country to attempt to implement financial services since 2006. It was, to say the least, a test of endurance. However, many recent developments favour payments going non-cash and give me cause to believe that 2015 will be an important year for India.

Firstly, mobile penetration is remarkable and is aided by the September release of budget Android One smartphones that appeal to a highly price-sensitive market.

Secondly, a highly thrifty, large population desperately needs convenient ways to save and spend.

And, last but not least is the will of the government. The recent meeting between Mark Zuckerberg and Prime Minister Narendra Modi highlights the opportunity that digitally connecting remote villages presents to businesses around the world from a wide variety of perspectives.


Evidence on the ground

The cash-centric Indian economy is at last moving towards non-cash payments. By end of September 2014 more than 53 million new bank accounts were added in India to disburse benefits and social security to recipients. This is one example of initiatives from the Modi government, strongly backed by the Reserve Bank of India led by Governor Raghuram Rajan.

India’s US$4 billion e-commerce market is set to soar to US$20 billion by 2020.2 E-commerce is being driven by cheap handsets and mobile data plans that enable consumers to buy from their increasingly smart mobile devices.


Born Digital Money

As in Africa, mobile money is poised to strongly support financial inclusion goals. But there is more.

In my book “The Digital Money Game” I describe how people expect a whole package of services across online, mobile, social and local situations, creating a multitrillion-dollar industry worldwide. India’s market is a perfect example and consumers are demanding convergent financial services from the start, as opposed to the mobile-centric services that took off in Africa.

This requires, for instance, the ability to provide a service not just using mobile phones but through multiple channels and the ability to offer not just one service but many. Our research this year confirmed that this is needed to compete in emerging markets, and India is a prime example.


Reaching previously unreachable markets

Underpinning the non-cash transformation is Aadhaar, the world’s largest biometrics project that goes across all segments of the population. This paves the way for middle-class consumers to make payments to their domestic help, for instance, while also using their new wallets to pay for higher-value airline tickets, goods and services. The rise of mobile Internet access aided by smartphone penetration is bringing young and highly connected shoppers online and is creating conditions for prepaid and digital wallets to thrive.

India’s 1.25 billion people are spread across 29 states and seven union territories and, as a consequence, the complexity of the market has been likened to that of all the European markets put together. Marketing in this highly fragmented environment is challenging due to differences in regulations, income, religion and culture and, notably, the lack of government-issued identification. With just 58% of Indians registered at birth, it’s no wonder that India is the largest user of cash among all emerging countries. With little to no ability to verify their identities, unsurprisingly, just 48% of people have access to bank accounts and traditional payment cards.


The emergence of Cash-on-Delivery (COD)

Around 20% of Indians have Internet access, so online sales have only just begun to grow, but the opportunity is immense, particularly as consumers look for ways to digitize cash. So far Indian consumers have not given up their reliance on cash to shop online. Instead, cash-on-delivery (COD)—a uniquely Indian phenomenon—has penetrated many urban markets. This involves consumers ordering online and paying for the goods when they’re delivered, generally at home. Flipkart popularized this convenient way for consumers to shop online with confidence and without plastic cards, and the company has been rewarded with wave after wave of investment.


In pursuit of Cash-before-delivery

But launching truly digital money services requires that players connect the dots between the online and mobile worlds and the offline world. As the Indian e-commerce market matures, COD is giving way to CBD (cash-before-delivery). COD has caused some problems for e-commerce merchants because many consumers refuse to accept items on delivery, after the initial flush of an impulse buy has faded. To meet the demand of merchants and to fit into the increasingly mobile-centric consumer lifestyle of Indian consumers, mobile wallets and prepaid payment instruments have flooded the Indian market and challenged the prevailing COD model.


Connecting the dots

Our studies show that global e-commerce companies are busily pursuing their strategies to enter this nascent market and rub shoulders with the home-grown services, both categories of players must be mindful of competition from outside their immediate vision.

For e-commerce players, digital money solutions that incorporate CBD will be critical. The race is on between Amazon, Flipkart and Snapdeal. So far Amazon, which recently invested US$2 billion in India, spent this Diwali in hot pursuit of Flipkart consumers. Meanwhile Flipkart shut its payment gateway Payzippy within a year of launch and its recent acquisition, Ngpay, is expected to provide the next platform for its attempt to extend into digital money.

As what we term as a new “nationalised liberalisation” emerges and global players ramp up investment, taking advantage of new ease of doing business in India, Shift Thought offers a range of consulting services, research and portal access that offer timely and vital knowledge on how to navigate the still murky waters of building new brands in India.


Shift Thought offers a Navigation Guide

Recently released Shift Thought research explains why and how e-commerce strategies must evolve to compete in the new digital money industry. Our report provides facts and figures not just on the mobile wallet services that have been launched—and the unique way in which prepaid services are taking off—but on the whole set of services we term digital money. I believe that is the game that global providers will need to get right to capture the new opportunities presented by the Indian market.

Our Digital Money in India 2014 Viewport released this month explains how the competitive landscape is unfolding in India, with case studies of how providers are creating unique solutions, and this article is part of our Focus on India Series through which we share highlights of our research.

Whether you are interested in taking up the challenge of entering the market, or simply wanting to know more about what’s happening, just drop us a line today at contact@shiftthought.com and we will be delighted to talk you through some of the key trends that affect you and the various options available through which we can help.


Join us to discuss this further and add your valuable comments at my post on LinkedIn



Some parts of the blog have been published in my blog “India’s E-Commerce Boom Paves Way for Digital Money” on PAYbefore Op-Ed. 


Insights on how to succeed in Mobile Money from Gemalto, a world leader in digital security


Today I have great pleasure in speaking with Naomi Lurie, Director of Marketing for Mobile Financial Services (MFS) at Gemalto. From this key position at the world’s leader in digital security, Naomi is very well placed to share with us about GMPP (Gemalto’s mobile payments platform) and the work Gemalto is doing around the world in the extremely fast moving payments arena, both in developed and developing countries. Naomi shares with us some of the key initiatives in which Gemalto has been involved, and explains the importance of perseverance in achieving mobile money adoption goals.


Naomi could you kindly set the context for us, with a bit background on Gemalto and your leadership position in mobile financial services?

Gemalto OfficeGemalto is a leader in digital security, and a technology enabler for mobile network operators, banks, governments, enterprises and retailers. We work behind the scenes to ensure that each time their customers, employees and citizens want to transact, connect or identify themselves, they can do it safely and easily. You may not realise it, but if you put your hand in your pocket and take out your wallet or mobile phone, chances are it has a Gemalto security component – in your SIM card, your bank card, your driver’s license or your government ID.

One of our important growth areas is mobile payment services, and I look after Marketing for these solutions. Specifically I’m responsible for our Mobile Money and Cloud Based Payments offers. In our Mobile Financial Services marketing team we also offer Trusted Services solutions, including TSM and a Trusted Services Hub business service, and we are NFC experts. It’s exciting work in exciting times, especially as we are a global player with 44 sites and customers in 190 countries.

And with the coming of tokenisation there is yet more work for you?

Yes, certainly. As the leading TSM provider, we’ve been provisioning credit cards onto the mobile device for the largest mobile payments initiatives in the world. Emerging standards for cloud-based payments and tokenization require secure provisioning services for cards, tokens and keys. So, our assets and expertise in provisioning, mobile security, and authentication all come into play.

We’ve recently announced our Trusted Services Hub, a turnkey business service that enables issuers, enterprises, transport operators and digital service providers to easily deploy their value-added and mobile payment services across smartphones and mobile networks around the world. So with one connection to the Hub they gain access to over 1.5 billion mobile users worldwide already covered by our solutions.

Please give us some background on the Gemalto Mobile Payment Platform (GMPP)

GMPP is our comprehensive, field-proven, secure, flexible platform for issuers, mobile operators, retailers and banks that wish to launch mobile payment services. It supports emerging market use cases including stored value accounts, agent networks, P2P transfers, bill payment, airtime top-up, merchant payments, government payments and more. GMPP also powers developed and semi-developed market use cases relating to payments, usually from smartphone devices, such as in-store and online payments, loyalty and couponing.

We work across many different channels: USSD, STK, mobile apps, web and more, and we offer strong security across all these. We authenticate customers and manage risks relating to repudiation, fraud and more. We integrate into mobile operator, issuer and retailer environments and manage diverse requirements based on the nature of the ecosystem, which ranges from simple to very complex.

How has GMPP been used around the world?

Our platform is deployed around the globe. In Europe we work with Telefonica Spain and Telecom Italia.

India Post

India PostThe Gemalto Mobile Payment Platform is running in India with India Post for domestic remittance, since November 2012. India Post’s domestic money transfer service was a traditional paper-based service that took around 5 days to arrive at the destination. India Post wanted to modernise the service, to compete with the new mobile money systems coming from new entrants such as mobile operators. Since India Post has close to 90% of their branches in rural areas, they decided to modernize their money transfer service using mobile. It’s an interesting over-the-counter service. The agents at the post office are equipped with a mobile device that runs an app that collects information about the sender and recipient, amount and pickup location. Immediately both sender and receiver get SMS notifications about the transfer and how to pick it up. And the transfer happens in minutes!


Transfer in Mexico

Transfer1In Mexico, the GMPP is at the heart of the Transfer Service, which is brought to market by Banamex (Citi’s Mexican subsidiary), Telcel (America Movil’s Mexican mobile phone subsidiary) and Banco Inbursa. Telcel provides the channels: SMS, USSD and CRM. The banks hold the accounts and create the use cases, as well as manage network integration with Point of Sale and ATM networks. In Transfer users can get a companion card as well, to access the balance in the prepaid stored value account for POS payments. GMPP hosts all transactions and the customer wallet. The service went live in April 2012.

GMPP is also installed with NetOne in Zimbabwe, for their OneWallet mobile money service. This is your classic service, with P2P, cash in, cash out, airtime top-up and bill payment.

Gemalto provides the SIM Toolkit (STK) and Secure Access Gateway for MTN Group in Africa, Vodafone Qatar and elsewhere.

GMPP obviously solves some key needs for the unbanked. Could you please tell us what makes your implementation uniquely compelling?

I think what’s unique is the way we can address a very broad spectrum of use cases in a highly secure manner.

If we rewind to 5 years ago we thought we knew the recipe for mobile money. Just provide the standard set of expected services, follow the formula and deploy. However services have gotten more diverse. There are specific needs and requirements when we deploy in semi-developed markets. And emerging markets also have diverse customers – some with smartphones and others with very basic phones. Take Mexico for instance, the aspiration is to bank the unbanked and offer a new kind of account to the masses, but they must also appeal to urban users. There is a need for a combination of scenarios. We therefore feel well placed as we can offer the limitless combinations, while maintaining security across all the channels. That’s the strength Gemalto has.

Also we build our platforms to scale. We see mobile money as mission-critical services and can affordably scale up and ramp up as the usage grows.

What do you see as some of the challenges faced in bringing services to market?

There is no magic. You can’t just deploy technology and expect the service to be a success. It has to have all the right elements – in go-to-market, organization, and budget. You really must do your homework and take care of buyer personas, marketing strategy and back office support. You need a lot of CXO attention and need to continuously attract investment and management attention.

I think it is really important to be able to correct yourself. Of the over two hundred mobile money deployments, only a few have reached scale. If you give up and just let the offer die down, that is a waste. As in case of any product launch, it’s important to be able to correct yourself.

Another challenge can be regulation, meaning what type of services the regulator allows and what kind of limiting factors will the regulator impose. Often you need a strong lobby on both aspects.

When you look at mobile driven and bank driven initiatives which of these have a better chance of succeeding?

It seems that mobile operators (MNOs) have been more successful, but this is quite dependant on the region. MNOs seem to have the lion’s share of deployments quantitatively, but we do observe a trend for more issuer-led services.

MNOs seem to have an advantage on the marketing side; they know how to market to the unbanked masses, while banks are more comfortable marketing to their traditional clients. To launch a service for the unbanked requires a real transformation for the banks. However, in semi-developed and developed markets where most of the population is banked, the banks are at an advantage.

What are the major changes you’ve seen in the last year?

One change in the emerging market space is the launch of more consortium-led initiatives, and also Central Bank led initiatives. There are some new models coming up along these lines, with an attempt to put the entire set of domestic transactions on a single platform. Within that setup, individual service providers can offer branded services and compete with each other. These types of initiatives aim to address the question of interoperability from day one.

We also observe a much higher interest in enabling payments – in-store and POS payments in addition to mobile P2P between buyer and seller.

What major goals do you look forward to in terms of 2015?

Our goal is to continue to be the trusted partner of our clients and to help them operate successful mobile payment services. We aim to help our clients bring their mobile business strategy to life, while providing all parties confidence in the robustness and security of the service. It promises to be quite an exciting year with the advent of emerging tokenization standards, the new Gemalto Trusted Services Hub, the launch of major new initiatives, and the evolution of existing services.

Naomi thanks for sharing the very interesting work you do around the world and I wish you and Gemalto the very best of success for the future!



Naomi has a proven record of driving product and market excellence for products in the mobile, financial, retail and enterprise sectors.

Naomi joined Gemalto in 2010, where she drives marketing and strategy for the company’s mobile payment and mobile wallet solutions. She is an expert on the mobile money use cases emerging across the globe and is involved in some of the most ambitious and large-scale mCommerce services in both developed and developing markets.

Previously, Naomi was a product manager at Verint, which specializes in enterprise and security intelligence. Naomi was responsible for the global introduction of analytic software solutions for workforce-enterprise optimization, as well as the execution of product launch and rollout plans to sales, support and professional services.

Digital Money in India – a path to better governance

This article is part of our Focus on India Series through which we share our findings from our recent research in India. Our studies lead us to believe India to be the most complex and promising market for Digital Money in the world. Our Digital Money in India 2014 Viewport was published this week, to reflect our latest findings. In this post, I highlight a few of my own thoughts from my visit to India and my assistance in preparing the report.

   india shopkeepers 2 so

Going online in a labour-rich environment

India is the second most populous nation on Earth, but unlike many other large nations it still has a strong population growth rate. Finding work for such a large and growing population has led to a rather unique model of business in India. The labour intensity of almost any form of business in India is considerable compared to economies of the West. The degree to which this reflects on financial services as they go digital was one of the most noteworthy findings from our market visits to India in 2014.

The combination of relatively low labour costs and the desire to deliver a highly personal service has led to a distinctive form of labour intensive business practices in India. A good example of can be found in the ‘cash on delivery’ model offered by the online retailer FlipKart. This model allows FlipKart to serve consumers who do not have access to payment cards or other online payment methods. This allows buyers to change their minds after physically inspecting the goods rather than simply trusting the supplier. These features are extremely attractive in an economy that lacks widespread participation in the banking system and that is yet to completely trust online retailers. On the other hand, FlipKart must contend with the drawbacks of this scheme, in the form of high labour costs, in order to deliver goods and collect payment and incurs the risk that some buyers will refuse to accept and pay for goods once the initial impulse that motivated their purchase has faded.

Another good example of labour intensity is that of MobiCash India. They use a phone call to an operator as part of their login process as shown in the figure below.




It is not a unique feature of India that high employment by a firm leads to better relations with both the public and the government, but it is nonetheless a strong motivator for businesses to employ more people than they might otherwise choose to. Finding productive work for these employees has led to many of the models of business we see today.

The consequence of this for firms entering the Indian market is that they have access to an entirely new degree of freedom, since the availability and cost of labour is so low. This can be a great advantage if done correctly, but it may pose a problem for many Western firms. These firms have spent decades attempting to reduce the labour intensity of their operations, and finding innovative new ways of increasing employment while still making a larger profit may be difficult given their traditional mind-set.


Digital Money in the fight against corruption

The other feature of doing business in India that I would like to highlight is the continuing struggle against corruption. India is currently the 94th most corrupt nation on Earth. The growing middle classes and the freedom of the press in recent years has fortunately brought corruption more and more under the spotlight, and politically the reduction of corruption is high on the agenda of the Modi government.

Nevertheless, corrupt and rent-seeking behaviour is still rife in the country compared to many other major economies. The relationship between corruption and digital money is an interesting one. By using digital money methods such as online payment, mobile payment and cards, transactions become visible to the wider economy. This runs contrary to the cash-based ‘dark’ economy that corrupt and criminal elements prefer. When transactions go unrecorded, it is much easier to evade taxation or arrest.

Consequently, transforming the economy into one that is predominantly non-cash could improve governance by making corruption and criminal money transfers more visible and easier to punish. Recent progress towards a non-cash economy in India has been good. A noteworthy effort is the Pradhan Mantri Jan Dhan Yojana (PJMDY), which resulted in the addition of over 53 million new accounts by end September 2014.

We saw unique services that now cross online, mobile and offline environments. But the distinct “Assisted Model” of service through which services are developing seemed to us to be a double-edged sword. On the one hand it has the potential to build more secure and convenient services and guide consumers in using these for the first time.  On the other hand, these human checkpoints could potentially be subverted if certain risks are not anticipated from the very start.

Looking ahead 

The move away from cash holds a great deal of promise for India’s future. At the same time it is important that the new systems put in place in countries such as India are architected to be resilient against any possibility of the emergence of a parallel, informal digital economy. Such developments would subvert the existing achievements in digital money. The bullying practices of the past that result in corruption or criminal activity could be replicated in the new digital world if sufficient safeguards are not put in place. Digital transactions must also be encouraged to become an everyday part of people’s lives. People who get access to the new mobile-enable bank accounts must have a reason to use  the money online, rather than cashing their receipts and allowing accounts to go dormant.

This combination of responsible oversight and public interaction will make it harder to conceal illicit activities. There may also be a backlash against the spread of digital money in India by corrupt or criminal elements. These will not be the only objectors to the changes that moving towards a digital money economy will attract, but due to their powerful positions in the current economy, these elements may be better placed to disrupt the activities of businesses and users, especially in isolated or rural areas.


In summary, firms looking to enter the digital money market in India face a unique business environment, in which labour is cheap but high employment is necessary and where digital money is in demand but could find itself in conflict with powerful opponents. The promise of India lies in its vast and growing population, but accessing this market will require inventive solutions to inimitably Indian problems.



We invite you to join us in our campaign to celebrate India’s progress in going non-cash. To learn more, register on our portal or just drop us a line at contact@shiftthought.com.

Neeraj Oak

Chief Analyst, Digital Money


Co-author of The Digital Money Game, Author of Virtual Currencies – From Secrecy to Safety

clip_image008 clip_image010

Join us to explore ideas at The Digital Money Group on LinkedIn

Amazon makes strategic moves in the Indian market in time for the Diwali online shopping boom

The Indian $2-$4 billion market for E-Commerce heats up with new launch from Amazon

In the run up to Diwali Amazon has just made some major moves in their race to win over Indian consumers from the Cash on Delivery (COD) model to the Cash Before Delivery (CBD) model.


Launch of Pay with Amazon

A year after their payment processing service first launched in the US, Amazon has extended ‘Pay with Amazon’ to India this month, as the intense competition with Flipkart and snapdeal intensifies in the rapidly growing Indian E-Commerce market.

This allows Indian customers to store their card details and delivery address details for use on Amazon partner sites. This payment method is now available for Amazon, Junglee.com, Fommy.co.un, Shopyourworld.com and will be available at more e-retailers shortly.

Merchants pay a fee of 1.95% for credit cards and net banking, and a lower 0.75%-1% for debit cards.

However with India experiencing some of the highest online fraud threats, I believe Amazon will need to build in checks and counter checks of a far superior nature to anything they would have used before. Barely a year after launch Flipkart withdrew it’s Payzippy, no doubt in preparation for a more robust service that I expect we may hear more about soon.

Sell with Amazon


While a lot is being said about how Amazon is trying to get people to buy,  what is less understood but very important according to me is what they are doing to allow the 1.2 billion Indian population to sell in an easy way. This Diwali, Amazon has announced contests to win over sellers, offering rewards for Super Sellers and Star Sellers.


Partnership with Biyani’s Future Group

While the small merchants will come on board over time, some big partnerships are having a more immediate effect this season. Kishore Biyani is known as the father of India retail. His Future Group controls some of the largest retail chains in India: Big Bazaar, eZone, Home Town, Brand Factory and more. Now online retailing of the 40 brands are to be exclusively through Amazon, launched in India in June 2013 and now engaged in head-to-head competition with Flipkart and Snapdeal.com, the top 2 incumbents in the Indian market.


It’s all happening in India! In celebration of what we expect to be the largest move to non-cash anywhere in the world, we’re launching our FOCUS ON INDIA SERIES . In it we share our latest research on India through Webinars, whitepapers and more. Make sure you don’t miss out! Our unique Digital Money in India 2014 Viewport has just undergone it’s fourth revision this year, with inputs from our 3 market visits. Drop me a note at contact@shiftthought.com to find out how you can get immediate access to it, and to our portal that so perfectly complements it, or to sign up to our free research.