India has been at the forefront of fintech innovation, but its benefits have not reached the common man yet. This is because most fintech companies in the market are catering only to the super-banked, while completely neglecting the underbanked and to certain extent, lesser-banked.
Mumbai-based TranServ (owner of Udio, a mobile wallet) begs to be different. This company is targeting the lesser-banked with its digital payment solutions, comprising digital wallets, prepaid cards, mobile virtual cards, co-branded wallets, and corporate expense management solutions.
The firm recently received US$15 million in Series C funding led by IDFC SPICE Fund and Micromax Informatics, along with existing investors Nirvana and Faering Capital India Evolving Fund.
e27 recently spoke to TranServ’s Co-founder and CEO to know about the company’s strategies and goals, moving forward.
While mobile wallet has been a game changer, it is yet to take off in a big way in India. Why?
India has got a problem of cash. As per a report, about 95 per cent of all personal transactions are still being done in cash. It is a huge challenge to change this user behaviour.
Mobile wallet was initially supposed to replace cash. It is not necessarily about giving highly-banked consumers another alternative for payments.
If you look at the majority of digital wallets, consumers are using existing bank debit cards and credit cards. So mobile wallet has been designed to say “hey, hang on! You are super-banked consumers and let me make your life a little bit more convenient for you.”
The challenge is how to expand the market and get convenient tool for lesser-banked users to start getting into the digital world. Mobile wallet’s future is going to be largely about giving world-class experiences and great product offering, targeting the lesser banked and lightly-banked users in India. Unfortunately, it is not happening.
How do you address this ‘cash’ problem with your products?
We are a pure fintech company. We have built payment solutions for lesser banked community. We are a prepaid payment instrument holder. We may not do the consumer acquisition in the traditional fashion.
We are a wallet company, but at the core we are fintech. As a digital payment enterprise, our specialisation spans across end-to-end payment programme management solutions, helping corporates and consumers at large engage in cash-free transactions. Our payment programmes and offerings work towards building a safe and reliable ecosystem in collaboration with major banks across India.
Our product range comprises of digital wallets, prepaid cards, mobile virtual cards, co-branded wallets, and corporate expense management solutions designed to empower individuals to make swift payments electronically.
We have a partnership with Indian handset maker Micromax to integrate our solutions. Micromax gives us access to millions of customers a year. We are integrated with Micromax and we allow multiple participants including consumers to transact over our platform. This way we provide a platform to people in the lower spectrum of the society to transact online.
A partner like Micromax distributes about one and half million phones a month.
Are you basically looking to replace traditional PoS devices?
I don’t know if replace is the right word. We are giving people an alternative way to make payment. I think in India there is so much to be done in the payment space.
I don’t want to replace anything. India needs as much as infrastructure as possible. We provide an alternative way to transact.
In an interaction with a leading fintech company last year, its CEO told us that e-wallet defeats its very own purpose and that it is not going to work here. What do you think?
Today mobile wallets are largely being used by people in the super-bank category. These are people who are extremely banked and are using debit/debit card. If you start looking at the larger market, it is still unbanked. Mobile wallet could solve this problem.
Our argument is that mobile wallets will definitely play a very significant role as money is moving to digital, but it will play a role along with all the other players and people will grab it and dowhatever they are comfortable with.
Do you regard banks as your partner or competitor?
In the financial services segment, there is nothing called competition. You are competing with cash. Banks need to be viewed as partners because you have to build a partnership model with a bank. If you really want to solve a digital problem, banks are partners in this journey rather than competitors. I have no intentions of substituting them as they are doing a great job. I think fintech companies have to build over and above what they have done.
Banks are very actively working with fintech companies. Banks have historically worked with fintech companies for their technologies.
What’s going to be the future of mobile wallets?
I think the future of mobile wallets will be in helping making money digital. Mobile wallets have to start going to a newer customer segment, I think it’s concerning me today and I started my conversation with this particular point that mobile wallets are largely being used by extremely bank consumers. And that is a good thing to make it convenient.
The question is do we want to make transactions convenient for the super banks or do we want to get a larger audience to start getting digitally active in the first place. The problem in the country is that people are focussed on making transactions convenient for a highly banked users and are not necessarily fully focussed on getting a significant chunk of a country to become digitally active in the transaction state.
In an interaction, Life.SREDA’s Vladislav Solodkiy told us that there are many hypes around fintech and a lot of bullshit too. How do you respond to this comment?
I completely agree with the view. While there is a sea change in the payment landscape, there is also a lot of untested solutions trying to find problems to solve. India is unique and market expansion is key. Understanding the consumer and addressing real needs would be critical.
How do you think new-age techs like VR, AR and AI, etc. will change the concept of fintech drastically?
AI is already playing immense role in fintech globally — right from lending products credit scoring to helping merchants minimise fraud risk to helping retailers identify their customers purchase pattern.
Authentication and checkout can be made lot simpler with AR and VR technologies.
Bitcoin and blockchain are now becoming ubiquitous. Will it change the way people transact online?
They are not becoming ubiquitous at least in this geography in the near future. However, this is an exciting space and needs to be watched closely.
What is your favourite fintech trend?
Being payment enthusiasts, we are super excited with the trend around P2P and small value P2M (person-to-merchant) payments which will change radically in the near future with new tech and analytics being thrown into the mix.