Value Proposition, Distribution, Partnerships- The growth pillars of Aircel e-Money
The adoption of smartphones in India is on a rise and at the same time Mobile wallet is gradually gaining grounds in the life of commoners. Be it recharges or payments, people are slowly adopting the mobile way of paying money. Aircel, a known player in telecom industry, has entered into the mobile banking business with its product e-Money. As a new entrant in this segment, its strategy is to bank on its vast subscriber base. L.V.Sastry, Vice-President - Mobile Banking and Commerce, Aircel identified the three pillars of growth on which the company will achieve growth. He also discussed with VARINDIA about the drivers of the market, challenges and concern areas of this segment.
How do you position Aircel in the mobile wallet market?
In a very short span, the mobile-banking industry has witnessed a stunning and robust growth. From 2012-15, mobile banking transactions grew by 4000% in terms of value and over 500% in volume. Aircel being a large telecom player with over 80 million customers has a very clear strategy laid out for its mobile banking business. Being a new entrant, Aircel e-Money has the advantage of having this huge customer base of 80 million at its disposal and we are offering our mobile payment and banking services to this wide customer base. Payments form the backbone of our offerings and include recharges, bill payments and sundry merchant payments for which currently our customers use cash. Aircel e-Money is also available for non-Aircel customers.
What is your strategy to tap the market?
The strategy is to tap our own subscriber base and capture a bulk of their payment transactions. Aircel e-Money is complementary to our voice and data services offered to our 80 million customers. The ease of use of Aircel e-Money well dovetailed into our mobile services would be the key.
However, special offers, tactical tie-ups with a wide range of popular merchants and additional talk time will be the key drivers for growth for our mobile wallet service. We are also banking on our robust back-end analytics system to understand customer behaviour and pattern to innovate with our payment solutions accordingly.
Which segments are the growth drivers of this market? What is the size of customer base of Aircel M-Wallet?
Domestic remittances, recharges and payments are the major revenue generators for wallets as of now. We are targeting migrants for remittance and youth and professionals for M-commerce. Aircel has identified its three pillars of growth as: Value Proposition, Distribution, Partnerships & Tie-ups and we will build on them to achieve a robust growth for our wallet business.
What are risks and challenges that are involved in this business? What are the areas of concerns in this segment?
Cash economy is an area of growth as well as a major challenge for all wallet companies. While infrastructure challenges mar the service experience of subscribers, the habit of transacting in cash will take some time to disappear. But with time we feel the ease of transacting through mobile wallets will surely become a way of life.
Aircel is now focussed on increasing awareness and is working in the areas of:
• Increasing awareness about the features, ease of use and benefits of Mobile Wallets
• Acceptability of mobile wallets as secure, safe and transparent
• Profitability of the business for Telcos and sustenance with increased competition
According to reports, M-wallet market is projected to grow at a CAGR of around 30% in the next five years from 2015-2019. How do you see the future of this market?
The start has been robust and we believe the projected increase in M-commerce transactions is part of the convergence that is seen for some time around the smart phone business. The convergence is a positive trend as far as mobile wallets are concerned and it would certainly drive adaption of mobile commerce. Given the increasing number of threats and security breaches, M-wallets have surely emerged as one of the most secured and safe mode of mobile commerce transactions and it will pick up momentum as we move forward.
How do you think M-Wallets add value to other businesses? Could you highlight on the key benefits businesses can avail with the trend becoming prominent?
M-wallets will always add value to the core industry of banking. One of the interesting aspects where our M-wallet services can set the trend is in the education segment. We are planning to tie-up with various schools and campuses for small ticket payments. The small ticket payments that happen in schools and campuses will soon be done through M-wallets.
Those cash, which are typically sent by placing inside the school diaries, and in return the teachers send receipts by their signatures can be avoided by opening a mobile wallet, that is transparent too. If a school has 1,000 children, Aircel can open wallets for each of the children that is operated between the school and parents.
We are looking at those kinds of services and are in talks with schools/ campuses in big cities, including Tamil Nadu. Secondly, we are also looking at the whole cafeteria chain through ‘tap and pay’ method, in which critical information is passed through near-field communication (NFC). Most of the new smartphones have NFC capability, which are more convenient for one to just tap on the machine in a particular restaurant or cafe for payments.