4Cs of Paymate

8/4/2019 4Cs of Paymate

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PayMate to provide Mobile Banking Solutionsto major Indian Banks

PayMate, India’s leading mobile commerce company, has partnered with

Syndicate Bank, one of India’s leading nationalized banks, to provide mobile banking

solutions to their customers across over 2000 branches. This is PayMate’s first

foray into the lucrative Mobile Banking solution space. While PayMate has till date

tied up with 22 leading banks and provided them with its mobile payment services &

applications, PayMate will now also be offering holistic mobile banking applications

which will include non-financial transactions as well.

Syndicate Bank customers will be able to download a mobile banking application

on their GPRS enabled cell phones and this application will allow them to carry

out their daily banking functions like funds transfer, stop-cheque, balance enquiry,

cheque book request etc. Additionally, they will also be able to use their mobile to

ISSUE - JULY 2009l

...contd. on back page

Where are we in Mobile Payments? The RBI Mobile

Banking Guidelines was out last year (October 2008).

More than 19 banks have received approval to launchsome kind of Mobile Banking service for their customer

base. PayMate itself is live with eight deployments in

India (SBI, IDBI Bank, Corporation Bank, Stanchart,

ABN-Amro, Lakshmi Vilas Bank, South Indian Bank,

Union Bank), and two overseas banks (RBB Nepal &

Bank of Ceylon) and has a dozen plus in various stages

of implementation within the Indian-Subcontinent,

West Africa and Middle East.

Clearly the core value proposition of Mobile Payments

is Convenience or taking away the pain from day to dayfinancial (and non financial) transactions viz bills from

various utility services or shopping & ticketing or money

transfer, gifting and alerts, etc. The convenience factor

tips the balance for adoption, when security of doing the

transaction is adequate - and benefit is seen as greater than

perceived risk. Its essence is what lends itself to ease of

use, anytime anywhere nature and speed of transaction.

The 4 C’sof Mobile Banking


Mobile Banking makes things easier


Lakshmi Vilas Bank, one of South India’s premiere private

banks, has tied up with PayMate, India’s leading mobile commerce

company, to provide mobile payment solutions to its customersacross over 200 branches. With this partnership LVB will be

joining a select group of large public sector as well as private &

MNC banks that have embraced the potential of mobile banking

and payments.

Speaking on the association Mr. B.M.Nair, CTO, Lakshmi VilasBank said “As a heritage bank with a rich history, what differentiates

us from others is our relationship with our customers and the value

Lakshmi Vilas Bank inks partnership with PayMate for Mobilepayment solution



The $5bn MMT opportunity

The World Bank quantifies the current remittances market at $318bn,

with informal transactions taking the total to close to $600bn. Domestic

money transfers are typically 10 times as frequent. Revenues derived from

domestic and international MMT services will exceed $5bn globally by 2013.

The same analyst, from Juniper Research, also found that 70% of mobile

payment initiatives announced in the last 6 months have been in MMT.

Mobile money is a competitive necessity for MNOs, particularly inemerging markets. For example, Safaricom’s M-PESA has secured 5 million

loyal customers in under 2 years, and has recently broken even. Mobile

money offers the chance to extend financial services to the unbanked – it

costs around $400 to equip a mobile money agent. It costs around $250,000

to set up a branch, $10,000 to set up an ATM - mobile money will be the key

to bringing financial services to rural areas.

However, many mobile money initiatives fail. You need to engage with a

diverse and complex ecosystem of partners and competitors. The MMT project

management roadmap requires tackling many obstacles, from defining a

business model that satisfies multiple regulators (who may not have defined their

regulations yet!) to selecting technology partners, developing an agent network,

setting your fees and commissions, piloting and launching the service.

“The world’s population will look back in ten years time and acknowledgethat mobile money transfer was the product of the decade” – Michael

Joseph, CEO, Safaricom.

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Mobile banking uptake risesGrowing desire among consumers to keep closer tabs on finances

is driving the trend, says research. The uptake of mobile banking

services is increasing as consumers seek to better monitor theirfinances, according to research. More than half (52 per cent) of 1,000UK consumers polled by Monilink and The Future Foundation are

checking their bank balances via their mobile phone more often – ausage increase of 10 per cent since October 2008. But mobile bankingis still only used by five per cent of UK bank customers, says the

study, which represents growth of 25 per cent over the same period.“As the recession continues we are seeing consumers adapting their

behavior to help them get better control of their money, with people

checking balances more often,” said Barry Clark, research directorat the Future Foundation. “Furthermore, having tracked behavior over

the past six months we can see how money awareness has becomeincreasingly ingrained into consumers’ minds,” said Clark.The rise in consumer use of mobile banking services indicates

technology is “part of the solution” in times of financial instability,

said Monilink’s managing director, John Milliken. “However, we seethis flight to technology as a long-term trend as people increasinglychoose fast, convenient and secure ways to manage their financial

affairs,” he said.

Security main concern for USCustomers

A survey by KPMG has revealed

that most people in the US are

uncomfortable with mobile banking,

mostly citing concerns about

security as a main reason. Most US

respondents (91 percent) said theyhad never tried banking through a

mobile device, and similar levels were reported for mobile payments: 95

percent of U.S. respondents said they never made a purchase from a vending

machine using their mobile device and 95 percent said they never made a

purchase using a mobile device through a retailer’s mobile website.

Two thirds of respondents said they weren’t comfortable using their

mobile device for financial transactions, and of those respondents who had

not done any mobile banking 48 percent cited security and privacy as the

primary reason. There’s not much flip side – only 19 percent of respondents

said they are at least “somewhat likely” to use their mobile device for online

banking in the next 12 months, with 7 percent saying they were willing to

pay a nominal fee to do so. More people may be interested if they can be

convinced that mobile banking is secure, and if they become aware of theservices that are offered. About 68 percent of respondents said that their

current bank does not offer mobile banking. “The fact that the majority of

U.S. consumers are not aware that their current banks offer mobile banking

is clearly more perception than reality,” said Carl Carande, a principal in

KPMG LLP’s Advisory and Banking and Finance practices, adding that

banks would have to work on increasing awareness of the service.

MTN launches MobileMoney offering in Ghana

African operator MTN Ghana

has launched its Mobile Money

service in Ghana. The serviceallows mobile owners to store

and transfer money, and pay

for goods, without needing a

bank account. The group has

also launched the service to

subscribers in Uganda and

its West and Central Africa

(WECA) operations including

Cote d’Ivoire and Nigeria following successful pilots in 2008.

MTN Ghana launched Mobile Money ahead of its competitors in

partnership with nine banks including CAL Bank, Ecobank, Fidelity Bank,

GTBank, Intercontinental Bank, Merchant Bank, UBA, Stanbic and Zenith

Bank. The service would enable Ghanaians to perform a range of basicfinancial transactions using their handsets without the need of a bank

account, and provide access to money beyond banking hours.

Mr. Brett Goschen, MTN Ghana CEO, said: “The introduction of

MTN Mobile Money which is convenient, accessible, safe and easy

demonstrates the company’s commitment to bring world class

mobile services to subscribers in all parts of the country. The secured

system and processes conforms to best practices in the industry and

highly regulated by relevant authorities.”



Mr. B. Murali Nair, Chief Technology Officer, Lakshmi Vilas Bank

1. What are your plans for Mobile Banking and Mobile Payments?

Lakshmi Vilas Bank has an aggressive plan for rolling out Banking and

Payment services through mobile. We will be rolling out the services in the

coming days. Our objective is to move our customers to this platform and

reduce transaction costs.

2. Which technology is planned or in place by you for financial and

non-financial mobile banking transactions?

Technically most of these services can be deployed using more than one channel.We shall be using the IVR, SMS and WAP technology to deliver the mobile services.

Stand alone Mobile applications like J2ME applications are also being evaluated.

3. What synergy do you see between Mobile Banking and

Phone Banking?

Frankly I do not see any synergy. Phone Banking has been in use for quite some

time and has not become popular. I am afraid it will die a natural death. On the

other hand mobile based banking has been a huge success in countries like South

Korea where it has been able to even drive the sales of mobile phones. It has the

same potential as what e mail did to internet. It can have a tremendous impact on

the m-commerce space also.

4. What challenges do you expect to face as you bring mobile banking to

your customers?

For one thing, it will not be able to support the entire gamut of banking services.

The compatibility of the mobile operator with the handset, there being plenty of

models and makes in the market may also be an issue. Security also still remains a

concern and service providers are yet to give comfort on this front.

5. How will you encourage your customer segments to utilize mobile banking/

payment services?

We will try a combination of methods consisting of incentivizing, awareness

drive and the awareness about the ease of usage besides the normal marketing

techniques like publicity campaigns, press advertisements etc.

6. What trends do you foresee in the Mobile Commerce space?

If the trends in other Asian countries are any indication, I feel that mobile commerce

holds great potential. With more maturing of technology, banks will try to reach

out to more number of customers. Banks see the advantage of reducing the cost

of transaction while being able to cross sell and up sell their products though this

medium. With the growth of mobile population increasing at a very fast pace, the

prospects of customer acquisition also increases dramatically.

Mr. DK Kundu, AGM,Information Technology, Syndicate Bank

1. What are your plans for Mobile Banking and Mobile Payments?

Syndicate Bank is already in the process of implementing the Mobile

Payment and m-Commerce solution. Funds transfer will be thus on the

finger tips of the customer.

It will facilitate availability of funds to dear ones. Sending gifts on

various occasions will be easier now. To take it further, we may think

of the Mobile as a part of Cash Payment System through ATM or POS

machines, thus facilitating the customers to get payments anytime and

anywhere instantly.

2. Which technology is planned or in place by you for financial and

non-financial mobile banking transactions?

Syndicate Bank has chosen the ASP model of providing Mobile Payment

and m-Commerce solution. Paymate India has been chosen as a partne

to this project.

3. What synergy do you see between Mobile Banking and

Phone Banking?

In addition to payments, mobile Banking is used for sending information

to the customers such as alerts, warnings of any unwanted transaction

taking place etc thus in effect acting as a tool of authentication. Traditiona

Phone Banking did not have any such facility.

4. What challenges do you expect to face as you bring mobile banking

to your customers?

Security is a challenge. However the same can be mitigated by pre-

emptive response to the issues. Syndicate Bank has robust Security

processes in place.

5. How will you encourage your customer segments to utilize mobile

banking/payment services?

A mobile phone is already in the hands of most of our customers. The only

effort that it requires for popularizing the service is to provide them the

information about the utility and the ease of the service.

6. What trends do you foresee in the Mobile Commerce space?

This is going to be the most favored mode of funds transfer and commercia

transaction. The usage will be across the country. Mobility has already

penetrated into the rural areas of India and because of this reach we

anticipate that the usage of mobile for payment will be crossing all limits

in near future.

Mobile Banking and Payments: Prospects of customeracquisition increases dramatically

The edit team spoke to Mr. B. Murali Nair , Chief Technology Officer, Lakshmi Vilas Bank, and Mr. DK Kundu , AGM, Information Technology, Syndicate Bank for their views

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It must also cater to three distinct consumer needs (a) address “pain point”

for today’s harried time pressed customers in their daily rush to manage their

lives and work. Paying bills, premiums, installments, fees etc. (b) serve as an

aspirational need, one - of making a lifestyle statement of being able to buy

tickets, gifts, holidays, hotels, cars, restaurant etc while on the move and (c)

being in command, without complex intermediaries or processes, having theworld literally at your fingertips.

Communication towards creation of awareness (need) of the concept and

benefits as outlined above are key. Stoking interest and desire would be first steps,

leading to action and usage. In this all stakeholders have to play a role. If Banks

are the front facing entity providing this service under their overall brand, then the

onus is primarily on them to drive this. In the recent past several Banks have made

announcements with ads in the top business newspapers, TV ads and various Out

of Home media (ATL). Others have embarked upon below the line (BTL) activity by

way of SMS, e flyers, online ads, messages on statements & ATM screen & slips,

signage, etc. Both methods are needed. One to create awareness and desire, the

other to induce and action. Perhaps in the ratio of 20:80.

The third ‘C’ is Customer Adoption. How fast or which customer segment is

the low hanging fruit and how to ‘board’ them into the service? The challengeis to get this TG to sample and experiment with the service, and then make

them regular users. This could be a 3 stage cycle, firstly board the i-banking

& e-commerce customers (the immediately relevant TG) – these are the ear

adopters and electronically savvy base. They tend to be the evangelists and for

the core of potential word of mouth. Second, some banks have embarked upo

incentivizing registration and subsequent usage by running special promotion

offers. A program which has been very successful is movie ticket offers, with on

ticket free or 25/50 % off. And third, every new customer is given the option obecoming a mobile payment user at the time of opening of an account. The en

game is to focus on converting at least 10 percent of the i-banking & e-commerc

base into a regular mobile payment transacting user base within 12 months! N

doubt this is the slowest part of the journey, but something which has to be don

by the service provider.

The last ‘C’ is Concern on security, speed, privacy and risk. This is a genuin

issue, albeit a perception issue. Every consumer electronic payments channe

has had to perforce run the gauntlet of misuse or safety perceptions- whethe

that is credit card, ATM, debit card, online banking or telephone banking. S

neither will the mobile payments channel be exempt from this. It will have t

jump through the same consumer education hoops. This again will need to b

primarily addressed by good (focused) marketing communication, viral and

minimal critical mass of good user experience.

Probir Roy, Co-founder and Director, PayMa

pay for mobile recharge, utility bills, movie & flight tickets and other online &

retail purchases at over 15,000 PayMate registered merchants across India.

Speaking on the association Ajay Adiseshann, MD and Founder, PayMate

says, “The high penetration of mobile phones is the definitive indication of the

growth potential of m-commerce in India. With this technology we plan to

offer Syndicate Bank customers an all new banking experience whereby they

can conduct their banking and non-banking transactions through their mobi

phones anytime anywhere.”

PayMate’s selection as the developer for Syndicate Bank’s mobi

banking initiative has come after a tough selection process where-in a tot

of 9 companies including Obopay, FSS, Unicell & NGPay participated in th

bidding process.

Contact us : PayMate India Pvt Ltd. 111, A Wing, Sundervilla, S.V. Road, Santacruz (West), Mumbai - 400054 Tel: 022-26616170 Email: [email protected]

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2. We do not accept any responsibility or liability for the accuracy or contents of the newsletter. These are reports based on public information.

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we offer them. We always strive to bring the best of banking convenience

to our customers whether it is through improved services over the years

or through technologies that enable them to do more. Our partnership with

PayMate will enable us to do both with an exciting mobile payment solution

for our customers”.

Ajay Adiseshann, MD and Founder, PayMate says, “Our alliance with

Lakshmi Vilas Bank will further bolster our payments ecosystem. Further, we

are excited to bring mobile payments to LVB’s customers and are confident

that the sheer convenience of using their phones to make payments will

drive the uptake and enhance customer satisfaction, loyalty and stickiness”With PayMate, Lakshmi Vilas Bank customers will be able to use their

mobile to pay for mobile recharge, utility bills, movie & flight tickets, onlin

purchase, retail shopping and so much more at over 15,000 merchants

India registered with PayMate.

How PayMate works:

• Once the customer chooses to pay via PayMate at the merchant, he / sh

shares the registered mobile number and the merchant triggers an IVR ca

to the customers mobile.

• The customer punches in his 4 digit mPIN to authorise the payment.

• A confirmation of the transaction status is sent to both the custome

(via SMS) and the merchant (through the PayMate interface) within few seconds.

PayMate to provide Mobile Banking... contd. from front page

Lakshmi Vilas Bank inks... contd. from front page

The 4 C’sof Mobile Banking... contd. from front page

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4Cs of Paymate