India’s Digital Payments Freeway

In the process of building a movie tickets platform, the BookEazy team stumbled upon a revelation of card-less digital payments. We weren’t the only ones to come upon this discovery. And yet, its taken eight years for the digital payments freeway to become a potential reality. I believe that this is an important, polarizing discussion as it offers the ability to permanently close the larger digital divide in India.

Card-less Movie Tickets Online, April 2006 to 2009.

When working on getting BookEazy live we framed the problem of movie tickets in simple terms. We wanted both students and knowledge workers to be able to book their movie tickets via mobile SMS without using plastic. This was before net-banking had become possible and only a small portion of the urban population were card-enabled. An offline method, Cash on delivery was on the horizon and multiplexes had begun offering home delivery of movie tickets to movie-goers.

BookEazy cofounder and CEO offered a solution. Inspired by how we rent movies and Inox’s cashless “reserve a movie ticket by SMS and show up 40 mins before to collect them”, she suggested – why not take that idea to the next level? We then designed a cashless system which allowed movie-goers to reserve movie tickets against a security deposit and show up at the theatre to collect their tickets any time before the show.

We built over several assertions, selling ~1CR of movie tickets in Pune. Some turned out to be true, while others turned out to be false.

  • We got the mobile-only use case bang on right and ported the system to work not only with desktops, but with SMS transactions and mobile browsers. But we were too early for smartphones and native apps.
  • Urban debit and credit card penetration has grown significantly since then. I can imagine more than 60% of a site’s transactions are card based (with a 3 to 1 factor in favor of debit cards to credit cards).
  • We were on target for the “impulse buy” use case. By eliminating the card altogether from the workflow, our movie-goers booked more often than box office average in a year.
  • We weren’t able to onboard Students as well as we did with Knowledge Workers who valued convenience over price [1].

E-Payments Develop, 2009 to 2012.

The years that followed, were relatively quiet years for payments, overseeing the development of card gateway infrastructure and other channels such as cash on delivery, net banking. Since 2012, Flipkart and other ecommerce sites drove the development of the e-payments infrastructure. Oxigen and One97’s PayTM were two outlying payments services that continued onwards through this time.

The other key building blocks that solidified during this time are inexpensive smartphones and ubiquitous saturation of mobile internet. As we’ll see further – these will have a significant say in the development of our digital payments freeway.

Wallet Services, 2012 to 2015.

For comfort I’ve always stayed with prepaid mobile cards. Recharging them with my local kirane-walla (local Grocery store) hasn’t always been convenient and so began the search for an online solution. My earliest prepaid recharges with PayTM culminated from the frustration of trying to recharge directly with the operators website (AirTel, TATA DOCOMO, Idea). Initially, PayTM recharges were restricted to the desktop with a credit card. Subsequently, PayTM launched their Wallet service and app for iOS and Android.

The original insight for a Wallet service comes from prepaid users ‘lending’ each other minutes [2] of talk-time (or credits, if you will). Which also explains why the growth of M-PESA a mobile wallet service in Kenya was led by a telecom operator and not a bank.

It makes sense for PayTM to have mobile recharge as a captive service [4]. Even if there appears to be a contradiction between the Wallet service target demographic (prepaid customers) and the channel favored (smartphones). Students are perhaps a unique target demographic where both attributes happily co-exist. Explained another way, students are both – heavy users of smartphones as well as prepaid services.

On the flip side, at least one source directly cites unfavorable regulation as to the reason why Wallet services haven’t developed in India [2]. Fast forward to today and we’ve got a plethora of Wallet service providers here in India led by first-generation wallet services, banks and others with a desire to bank the unbanked and the underbanked [3].

The creation of a nationwide digital payments freeway has implications for e-commerce and others. For instance, students now can now be included under digital payment channels making it possible for them to be a higher margin demographic and offer a greater lifetime value. On a longer timeline, Wallet services can potentially digitize common small-value cash transactions and simply unite the larger India.

[1] Product plans must pursue a target demographic with a desire to make it possible to replicate their success.

[2] Mobile Banking: Financial Services Meet the Electronic Wallet, Knowledge @ Wharton and Ernst and Young.

[3] HDFCICICI Bank launch digital banking services.

[4] What is the Growth Strategy of PayTM?

Turning the Page

I’m transitioning from an independent software developer to a new role as a small cog in a very large machine who’s intent is to digitize India. As every day flies by, the sights and sounds I see change dramatically.

I’ve been keeping an eye out for games that have successfully managed to compress vast timelines into gameplay experiences. Spore is one such game. In the game, you’re introduced to a world in the first person as a single-celled organism who’s species evolves with time. With each evolutionary cycle you can introduce mutations in your species’ gene code to better match the environment you’re playing in.

When playing with a concept such as evolution, the gameplay experience has to balance what’s happening now with long term goals that might not be directly apparent. Focus too much on survival and the game risks a common experience. Defocus and you’ll miss engaging the user entirely.

Spore’s gameplay designers have cleverly placed easter eggs that subtly motivate the player through the game. In the screengrabs below the player’s focus is on his survival in a sludge pool filled with potential opportunities and threats. In the background you’ll spot large multi-celled organisms that indicate what the player could evolve into.

Spore Gameplay Spore Gameplay

What I Wish I Knew When I Was …

The central question around contrast in cognition is that you’d never know what you’d know before you knew it. No matter how much we try, we can’t be perfectly immersed in a different way of thinking without perhaps a deliberate effort and a great deal of abstraction.

What if you could ask how Bill Gates felt about his two lives? One as the founder of phenomenal software company and the other as the eradicator of polio. Is the choice of his second life a subtle hint that his first life wasn’t enough?

A short snippet from his “Ask Me Anything” with Bill Gates:

dgeek: Mr. Gates, Any advice on how entrepreneurs of today and tomorrow should go about balancing business and philanthropy… or do they have to succeed first in order to give later?

Bill Gates: Just creating an innovative company is a huge contribution to the world. During my 20’s and 30’s that was all I focused on. Ideally people can start to mix in some philanthropy like Mark Zuckerberg has early in his career. I have enjoyed talking to some of the Valley entrepreneurs about this and I am impressed and how early they are thinking about giving back – much earlier than I did.



“We are going to take percentage of Hindus to 100 in country …”,

– 22 December 2014,

I don’t want to focus too much on what has been said or done in the past few months with respect to religious conversion. Who did what and which side is right or wrong. In fact I’d rather think of every conversion as unnecessary and not seek redressal but simply stay still.

But the heart desperately seeks a language to speak in. Religion is simply a matter of faith and faith by definition should not require a passport.

If we must indeed discover our identity as a nation, as Swami Vivekananda wanted us to do so. Can we not find it in our strength rather than our vulnerabilities?

Watching the Mind

I now have my hands on a working Muse EEG headset. EEG headsets are a reimagining of existing technology that’s been available for the last several decades. Interaxon’s Muse is one such headset.

With the Muse comes an opportunity to talk about the mind in meditation with objectivity that only data can bring.

I’ve meditated for over a hundred sessions of at least twenty minutes or more. I know that with practice comes change. I can feel that change. To help explain that change, I need a consistent method, vocabulary and reliable metrics. I believe advice ought to always be backed by a relevant model, that in turn is backed by data.

This morning I calibrated sessions for my better half and for myself. We both took turns trying out a session each. She’s never meditated before and comparing results gave us perspective. Although this isn’t the ideal scientific method, it did help get me thinking. Why stop there? I intend to broaden the circle and get you to participate.

In a nutshell, the Muse does the work of creating one such model of what your brain activity looks like when playing a simple game based on a bio-feedback loop.

The objective of the game is to go from active, to neutral, to calm and to keep a clear mind through distractions. To play, sit down in a quiet area where you won’t be disturbed. Bluetooth-couple the EEG headset with a smartphone and plug in a pair of earphones. The Muse smartphone app then takes over. Over the earphones you’ll hear different sounds that includes water splashing, wind blowing and birds taking off. As you’re presented with these sounds you bring your mind back to your breath.

To help guide you on how you’re performing, an audio feedback loop of wind blowing reflects the activity read. The more consistent the brain activity observed, the calmer the wind. As you play the app interprets and presents data from the headset as activity in three bands Active, Neutral and Calm.

Here’s one set of readings from an early morning attempt at playing the game.

17th Jan '15 0942 graph

17th Jan '15 0942 pie

Here’s performance from a second session that followed a very intense brainstorming session on a project that I’m working on. As expected, the first half of the session was windy and required an effort to calm down.

19th Jan '15 1050 graph

19th Jan '15 1050 pie

To have a look at what your mind looks like, get in touch and we’ll meet up in Pune for a short 12 / 20 minute session.

Digitizing the Long Tail of Ecommerce and Local Services

We’re going through a significant degree of change here in my home country. As far as historical trends go, this is the fastest pace for any change and we squarely blame technology for what’s happening. Oddly, one might live through an entire decade and yet not notice this change.

In a conversation last night with a friend, I learned a great deal through his outlook on how things are shaping up. His family is talented and have many gifts to share with the world. His Mother’s written several cookbooks and has deep insight into to food and lifestyle choices we make. He himself intends to create a niche portal to service pets.

Another friend of mine who has been tracking the growth of e-commerce in the United States from inside the industry alerted me to what’s actually happening here. While today, valuations are driven by captive e-commerce infrastructure, the more reliable metric is still lifetime value of the customer. Flipkart, Amazon and the other incumbents are essentially responsible for developing the long tail of e-commerce here in India*. To help understand the scale of change that’s needed, the contrast you need to grasp is that for every one e-retailer in India, there’s essentially a 1,000 and more in the US.

Another segment that’s changing rapidly are B2C services in India. They directly stand to benefit from the digitization of the last mile between the business and its customer thanks to mobile internet.

On my way to work, my auto driver started up a casual conversation with me. In the midst of the conversation, he asked me if I knew that Ola cabs had enabled auto drivers on their digital service. I had indeed. He then politely asked me if he could have my number to refer back to Ola and claim a reward of a hundred rupees. I said I’d gladly share and sign up.

Those drivers who go out and get themselves a tourist cab might opt-in to Uber and a myriad of other services. I can now hail a cab or an auto within 15mins no matter where I am in Pune. This is especially helpful late nights and in the outskirts of the city.

One place I can see where this’ll help is at our local airport. If you talk to the prepaid autos at the airport, they’ll often charge 1.5x to 2x the fare back to the city. The cops there don’t want to do anything about this as they’re looped in on the take as well. The justification for the premium is that all auto drivers need to pay a fee to enter the airport (to whom?). The next time I’m there I’m going to try hail an auto for myself using the App from outside the airport. I hope that’ll work.

The question “What’s the next $Bn startup out of India?” just got a whole lot more interesting!

* I am what one might call a skeptic, but its hard to argue against overwhelming evidence and specifically Amazon’s decision to permanently set up shop here having patiently waited since the mid-2000’s.




7AM (2)


Get every new post delivered to your Inbox.

Join 178 other followers