"Evolution Of A Good Business Model Will Drive e-Payment System"

With banks and financial institutions increasingly opting for ePayment systems, the market for the electronic payment industry is growing at a rapid rate. M N Srinivasu, director, BillDesk, shares with BizTech2.0 his company’s plans to foray into this space.

Could you share your views on the present state of e-payment in India?

The electronic payment industry in India is poised for exceptional growth. The basic requirement of an e-payment marketplace is to have ’electronically-transacting’ enabled customers. Today with over 5 million Internet banking customers, over 25 million credit card holders, and over 70 million debit card holders, there is a fair customer base that can transact electronically. The degree of Internet penetration and broadband connectivity is improving. The numbers of services that can ride on or need an e-payment mechanism are on the rise; increasingly most of these services offer customers additional benefits when the transaction is completed through an e-payment mechanism. This is a huge incentive for customers to adopt ePayment mechanisms. Large corporates and institutions are discovering that they can significantly increase their sales reach, customer delivery ability and collection efficiency when customers transact electronically. Consequently, most of them are working on solutions that will result in significant shift of transactions to ePayment platforms.

What are the challenges ePayment systems face in India?

Electronic payment is an emerging industry where banks play a key role. The key challenges are customer awareness, enabling of infrastructure and investment into electronic bill payment systems and operations. Being a nascent industry, the level of customer awareness is still very low in terms of the availability, benefit and use of such mechanisms. The level of awareness needs to significantly build up for increase in service adoption rates, which require a coordinated effort by banks. In terms of the depth/quality of Internet access, broadband penetration and number of Internet banking-enabled account holders, alternate infrastructure (viz. kiosks) need to improve significantly for mass-scale adoption of ePayment services. For the e-payment industry to record substantial growth, it is critical that all the constituents make concurrent investments in their technologies to cater to such need. These investments hold the key to this industry growth.

Could you elaborate on your tie-ups with banks and other communication service providers?

BillDesk is an electronic payments service provider offering electronic payments, collections and remittance-related services to banks and various organizations. In providing these services BillDesk offers relevant technology and service management support to these entities. These services enable banks to offer comprehensive electronic payments services to their customers, focusing on the customer-facing aspects while outsourcing the technology and service management complexities to BillDesk. As an aggregator offering a unified payments platform, BillDesk serves as the single point of interaction between multiple banks and institutions across the country. Presently it manages an extensive payments processing network, offering services to about 40 large banks, including SBI, Citibank and HDFC Bank; and to leading companies such as LIC, BSNL, Hutchison-Essar, Franklin Templeton and Reliance Infocomm, Airtel, Tata Teleservices and Reliance Energy in India.

Could you elaborate on your plans to foray into the mobile payment and kiosk segment?

The mobile payments space in India is still at a very nascent stage. Given the huge mobile user base, most constituents hold the mobile payments space to be potentially very large. To an extent this is true, as the basic ‘customer-base’ is in place. However, as a market, we are still yet to hit upon a good ‘use-case’ from a customer perspective. Also, as with any electronic payment transaction there is also a need for standards in the mobile payments space. We believe that one of the key aspects that will perhaps drive and influence the industry is the evolution of a good business model acceptable to the various constituents (operator, bank and service provider). All these constituents hold the space to be critical for their own business future and therefore there will be tugs and pulls even as the industry evolves. Good collaborative models will perhaps hold the key.

Akin to its strategy on other electronic payment channels, even in the context of the mobile segment, BillDesk will look to collaborate with its partner banks and telecom players to bring convenient payment services to the mobile device. As a starting point, BillDesk partner banks can extend bill payment services on the mobile. The kiosk segment is yet to witness any significant activity, but as and when banks or other players wish to set up kiosk infrastructure, BillDesk would look to partnering with them for extending electronic payment services on that channel. BillDesk has also been working with various constituents in evolving a business model for smoother, more efficient of way of transacting in equity markets; depending on the evolution of a supportive policy environment, electronic payments in the IPO market segment and secondary market would be a key segment that BillDesk would look to address from an e-payment perspective.