Start-up Island. Right time to ring in the mobile wallet in India and Asia-Pacific

Some months ago, Omlis, a mobile payment solutions provider revealed that while there were only 1.3 billion active credit and debit accounts across the world, there were 5 billion mobile phone accounts. Gartner had predicted earlier this year that mobile payment transactions worldwide would exceed $500 billion in 2014.

Other research in the space shows that developing markets are seeing a greater rate of increase in mobile payments than North America or West Europe. In the Asia-Pacific region, Japan and China are showing promise. Users in India are sending money to friends and relatives using their mobile wallets.

Start-ups like TranServ become key to enabling the growth of convenient consumer payment mechanisms in India and the surrounding regions. Fronted by a team of senior executives with experience in the banking sector and the payments business, the company deals in the space of prepaid cards, mobile cards and gift cards. Its business model hinges on it being a platform provider and enabler. The company has built key partnerships with e-commerce players in the FMCG and automobile sectors and among financial inclusion companies.

“We offer turnkey solutions and cater to technology requirements, product propositioning, backend operations as well as customer service for many of our partners,” explains Sandeep Ghule, Co-founder and Chief Marketing Officer, TranServ.

The TranServ platform’s interoperability means that end consumers don’t have to own too many wallets. TranServ’s strategy will be to tap further into segments such as banks, insurance and venture fund firms as well as e-commerce players and retail companies, while keenly focusing on its potential SME customer base.

Ghule elaborates, “More and more of our partners in India want to leverage the possibilities of Internet and digital commerce. We’re aiming at capturing 10 per cent of the roughly 20,000 crore card transactions per month which is a mix of credit or debit or mobile wallet payments. We’ll aim to achieve this in 18-24 months. The way we see it, our competition is not other players, but really cash and cheque payments.”

Bipin Preet Singh, Founder CEO of MobiKwik, set out with the vision to make it easy for every Indian to have a mobile wallet. This is pertinent considering the spurt in smartphone sales in India in the last few years. Singh is excited by the Indian market, considering it uniquely presents more mobile users than bank account holders. MobiKwik also has its eye on the larger South Asian region and West Asia after acquiring 8 million users in India. “Our solution takes the complexity out of mobile payments. All it takes is for the user to enter a mobile number, an OTP (one time password) and then make a payment.

We cover 2 lakh transactions a day. We’d like to get to 1 million transactions a day. We have about 5,000 merchants across India facilitating mobile payments. We will add merchants, of course, but the focus right now is to increase transaction volumes,” says Singh.

A Gartner Inc release in mid-2013 indicated that South Korea, Singapore and India will contribute to growth in global mobile transactions. It also forecast that Asia-Pacific will overtake Africa – the top region for mobile payments users – to reach $165 billion in transaction value in its forecast window of 2012-17.

The pie is there for the taking. But higher transaction volumes will be fuelled only as the deployment of required technology - Near Field Communications – spreads in many developing economies. What is important is that start-ups avoid feeding a glut of similar offerings like North America saw for a time. Differentiation while not missing the wave is the way to go.

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