'Payment Going Mobile'

In an exclusive conversation with  SMEStreet Mr. Arjunamurthy, Founder and Managing Director of Yeldi Softcom Pvt. Ltd emphasized on evolving market trends of the mobile payment market. He also highlighted his organization's vision and key insights.

Excerpts:

What is the scope of digital payment in India?

I personally feel that the digital payments space is the most buoyant business today, just like IT and Software Development was in the late 90s. What makes it so exciting is that a digital payment product requires four super-skillsets:

• IT skills to build the backend
• Design skillsets for the frontend
• BFSI knowledge for all regulatory and compliance related aspects
• FMCG-based consumer understanding to promote the product

While the mobile wallet space is relatively new to India, it is here to stay. Just to demonstrate my point – the number of mobile digital wallets is close to 120 million and has already outgrown the number of credit cards in the country by around 6 times! What makes this segment even more exciting is the fact that over 40% of mobile wallet users are from tier 2 and 3 towns.

How NFC technology is aiding in the digital payment space?

Just about every digital payment product today, is a smartphone app. But then…why should the not so smartphone-savvy citizen not use a digital payment product? Why should a chaaiwala or a kaamwali or anybody else from the lower income group not enjoy discounts and cashbacks? Why should senior citizens not enjoy from the added convenience of cashless transactions? Just because they don’t carry smartphones?

That is exactly where Near Field Communication (NFC) comes into play. Using NFC, we can now issue prepaid products just like other app-based semi-closed wallets – but in the form factor of a Tap & Pay card. This form factor is a lot easier to use, especially in physical stores. It can be issued to people even without bank accounts – which means it has the legs to reach the most rural pockets of the country.

Furthermore...imagine paying using a payment app at a high traffic environment like a fast food counter or a toll gate! By the time you open the app and make your payment, you will cause a bottleneck and the traffic buildup behind you would become unmanageable. With NFC Tap & Pay technology, making payments in such queue-buster situations is a breeze.

YELDI has taken into account various real life market situations. The NFC Tap & Pay technology will help democratize the digital payment space in India.

How is YELDI different from other players in the digital payment market?

At YELDI – we try very hard not to be a me-too brand or a me-too product. We have the courage to ditch product ideas just because somebody else has already launched a similar product, even though there is a revenue opportunity there. So there is a world of difference between YELDI and other players in the digital payments market.

• We are a multiproduct, multi-audience company. Our core maybe the use of NFC technology for transactions. But we have conceptualized various product models to suit the diversified needs of the market. For example – our NFC prepaid cards are for just about anybody. But we also have a smartphone app for the technology savvy audiences. We have closed-group payment systems, loyalty programs and business analytics that help retailers gain more traction with their customers. We also have specialised solutions for academic institutions and corporates. We will also very soon launch a solution that will serve the security needs of just about every apartment or condominium dweller.
• Unlike most other digital products that transcend from top to bottom of the socio-economic pyramid, we follow a multi-pronged approach. We have products for every part of the pyramid and this helps bring in a faster rate of adoption.
• Our primary motto is to serve the masses. To ensure that just about everybody has a digital payment instrument that helps them save money every time they transact.

4. What are the associations and collaborations of Yeldi Softcom Pvt. Ltd.?

In the process of developing our product – we associated with various mobile handset manufacturers like NOKIA, Sagem and Philips. We realized early on that success of the ecosystem depended on hardware, more specifically hardware hosting open platforms such as Google Android. So we standardized on Google Android platform for the terminal side and chose NXP Semiconductor’s contactless ISO 14443-A chip for the cards and tags.

We also associate with banks, when it comes to our NFC prepaid cards. In India, we have collaborated with AXIS Bank – which incidentally has the highest number of mobile app transactions among private banks in India. We are also associated with National Development Bank PLC in Sri Lanka. Very soon – we will be joining hands with large banks in Philippines and Qatar. The ambition is to tie up with at least 16 banks by 2016!

Furthermore – we are in the process of forging an alliance with a device manufacturer. This is a project in progress and I will share the good news with you once we are ready.

What are the challenges in the digital payment space?

Any new product in the market will need to stand the test of time during the initial years. But here…we are talking about a whole new segment. Thankfully, the digital space will learn a lot from the other boom-segments like BFSI, Telecom and e-Commerce.

This segment will need a buy-in from all stakeholders of the payment ecosystem. Customer acceptance will be a barrier that we digital payment companies will need to overcome. To sweeten the deal for customers and accelerate adoption, we need support from retailers too. Competition and predatory pricing is also something that this segment will witness.

Being a financial product, this segment will also rely on RBI’s guidelines for growth. For example, RBI’s current guidelines state that the maximum amount that can be held in a semi-closed minimal KYC wallet is only INR 10,000 per month. This hugely limits what the wallet could be used for. If this were to be revised to INR 25,000 or even INR 1,00,000 – then we are talking about a whole new ball game.

What are the other value added services provided by Yeldi Softcom Pvt. Ltd.?

What can I say here? Each one of our products are packed with immense value!

We ensure that our B2C customers who use our prepaid cards enjoy great value as compared to cash or credit cards. We are in the process of launching our semi-closed wallet card that will offer a great deal of flexibility to the customer. More on this product later.

We also provide specific solutions to small and medium-sized retailers that help them tap the spending power of their customers. Such solutions include closed group payment ecosystems, loyalty programs, business analytics and cloud-based business services. We have several clients for this business vertical, some of them being Air India, Guardini Laundromat, Social, Vaango, Vasanta Bhavan and Club Bounce Back.

We have close to 10 more products in their pre-launch stage and each one of them will be a clutter-breaker in the market.