Digital Payments have taken the market by storm. With market pundits predicting that digital wallets would soon replace physical card payments and the working millennial generation’s love convenient digital payments, has accelerated the exponential growth of digital payment landscape across the world. From financial big weights to Google, companies are hungry to grab a big bite from the industry.
India has embarked on the digital journey and it’s no surprise that Indians haven’t shied away from embracing digital payments. Utility bills to transfer of funds, Indian digital payment companies have been aggressively churning out offers and new features to garner better user engagement. TranServ, a Mumbai based digital payments company founded in the year 2010 has helped to create a secure payment platform for social payments and for partner merchants as well.
In an exclusive interaction with CXO Today, Anish Williams, CEO and Co-Founder, TranServ talks about the company and the digital payments landscape in the country.
What were the key trends observed in the market as digital payments were being embraced by the market from both a consumer and merchant perspective?
2015 can be said to be the landmark year as far as the evolution of the Indian digital payments industry goes. We saw a tangible shift away from the discount-centric business model that was being used by most payments service providers, and witnessed a greater focus on nurturing consumer loyalty by creating better end-user experiences and adding greater value to a consumer’s digital transaction. As such, we saw several new avenues of innovation, such as peer-to-peer transactions and mobile-based payments through native mobile applications such as messaging and contacts, being explored by the industry players.
This innovation in approach was appreciated by the consumers, who were quick to adopt these new developments into their everyday transactional behavior. Merchants, on the other hand, also welcomed these changes, as this allowed them to control the consumer’s payments experience and provided them with more channels to engage with their customers.
TranServ launched India’s first social mobile wallet “Udio” in the year 2015. How did the concept of social wallet evolve and what is the potential for social payments?
Be it going out with family for a dinner or embarking upon a fun filled trip with friends, most of our day-to-day activities involve transactions that are social in nature. However, managing these social transactions through traditional payments such as cash can often be a hassle. As we were looking to build unique and engaging payment experiences for our users with TranServ, this scope for digitization of social payments captured our imagination. This led to the conceptualization and launch of Udio, India’s first social wallet, which integrates the functionality of digital transactions with a community-driven social aspect to add greater value and convenience for users.
As far as its potential goes, the P2P payments industry is growing at an exponential rate and is already the payment option of choice for the Millennial users in developed economies such as the US and Europe. Venmo is a prime example of this growth; nearly $1 billion was transferred through the PayPal property in January 2016, demonstrating a growth of 2.5 times over the previous year’s numbers. An average Venmo user opens the app three to four times a week to check up on what their friends are spending their money on, and is increasingly using the wallet to share bills for meals and track expenses owing to its convenient usage.
The traction that we’ve received since the launch of our Udio wallet, from both consumers and businesses, underlines the market for social transactions in India. We are currently processing payments worth INR 100 crore on a monthly basis for our business partners, which include several leading businesses such as BookMyShow, Askmebazaar.com, Portea and Crownit as well as a host of smaller merchants and Facebook stores.
Moreover, in addition to our consumer-facing payments solutions such as bill-splitting, sending/requesting money and social gifting and the B2B Product Suite, we are also leveraging Udio to enable our Digital Meal Voucher programme. Aimed at eliminating the inefficiencies associated with the paper-based approach of corporate expense management, the initiative is making the process of corporate reimbursement swifter, more convenient and cost-efficient, and is finding great response from both employees and employers. With other novel developments such as native phone integrations with Micromax and cash-to-digital remittance programmes currently being developed by us, we are confident that social payments in India will witness a massive growth in their adoption in the near future.
How viable are the features like SpitzBill, social gifting when compared to other avenues available to consumers?
To gauge the viability of social payments, consider a simple scenario. Let us suppose you meet with your friends for dinner. When it comes to settling the bill, there is almost always a problem when it comes to tendering the exact share for each person, which invariably leads to someone having to cover for someone else. You have to manually keep a track of how much money you owe or is owed to you, which – to say the least – is cumbersome and full of hassle. Compared to that, through bill splitting, everyone can conveniently and instantly pay for their exact share without any hassles. Moreover, the wallet also keeps a track of how much you owe or are due to receive, and gives you timely reminders through push notifications. This convenience and ease of transaction is what makes social wallets much more viable as a medium for transaction for the end-consumer when compared to other available payments options.
What lead to TranServ’s association with Government projects such as Government Grant Disbursal and Amul Dairy Solutions. What significant value addition has TranServ been able to provide these projects?
TranServ was launched as a digital payments service provider that leveraged technology to make the end-user’s transactional experience swift, seamless and secure. Our empanelment with initiatives such as Government Grants Disbursal and Amul Dairy Solutions was secured due to the robustness and convenience of our payments platform that was being used by our banking partners.
Since these associations were meant to extend the benefits of financial inclusions to the largely unbanked population, we had to develop and implement unique payments solutions to make the initiatives successful. For the Government Grants Disbursal initiative, we launched a Skilling Card supported by a bank account for every beneficiary which allowed them to receive funds directly into their cards. A specific portion of these funds were restricted for usage only at empanelled training partners, while the rest could be used at ATMs and merchants. On the other hand, our involvement with the Amul Diary Solution saw us streamline the payments process for milk collection by equipping partner farmers with prepaid electronic cards. Funds could be loaded into the card electronically, which could then be used at ATMs and partner outlets for withdrawing cash. Moreover, we also enabled SMS alerts on funds credit and transactions, allowing farmers to receive payments on a timely basis and get them complete visibility of their transactions.
There have been speculations regarding the fate of mobile wallets. How has UPI affected the course of mobile wallet start-ups?
The perceived ‘threat’ of UPI to wallets operating in the country has been exaggerated a lot. If anything, the introduction is a promising development for mobile wallets, which are already using payments tools such as NEFT and IMPS to enable digital transactions on their platforms. UPI is an interoperable payment tool which is designed to add greater convenience to the consumer’s transactional behavior by leveraging mobility-based solutions. This is something that mobile wallets have already been doing successfully over the past decade or so. Moreover, there are certain challenges that UPI needs to overcome; achieving scale and hassle-free operations in the country the size of India could be a major challenge, while there are other factors such as a mandatory bank account which could potentially put off the unbanked population. Integrations with mobile wallets, which already have more users than credit/debit cards, will in fact probably be necessary for UPI to overcome these challenges. In the long run, we could witness UPI being leveraged by mobile wallets to enhance their service delivery and add greater value and functionality to the end-user transactions.