MOVING FROM CASH TO CASHLESS

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MOVING FROM CASH TO CASHLESS
Vivek Nayak COO, Avenues India Pvt. Ltd.Email
vivek_at_avenues.info
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Lets talk cash

• Money talks

• Universally accepted.
• Instant credibility.
• Symbolizes seriousness
• Hassle-free.

Cash is always welcome. No questions asked!
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But is cash perfect?

• Cash Rs. 6 lakh crores in circulation
• Nearly 88 is cash economy.
• Anonymous.
• No KYC No paper trail.
• Huge parallel economy
• Leaks due to tax evasion
• Enemy nations pump in fake currency

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Prepaid cards the best viable alternative

• RBI needs to be more liberal
• RBI wants to be careful in allowing any new
  payment systems because in case of any mess ups,
  it takes years to get things back on track.
• RBI Concerns Anti Money Laundering and Terror
  Funding.
• Remember Cash leaves no trace behind. So when new
  prepaid instruments attempt to replace cash, we
  feel these attempts need greater encouragement
  and support.
• So while the KYC process is good and required, it
  needs to be simplified.

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THE CURRENT KYC PROCESS
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All that for a rs. 100 prepaid card?

• Will you go through this KYC process for a mere
  100 Re Cash Card?
• How many Indians are capable of complying with
  these KYC documentation process?
• Why cant KYC done by one party be used across
  other parties?

We have to bring down barriers because the
average Indian is waiting for an excuse to go
back to CASH.
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Challenge to entrepreneurs in building the
ecosystem

• 1.1 billion Indians. Millions of bank account
  holders. 400 million mobile phone users. 12
  million retail shops. 11 shops for every 1000
  persons.
• The numbers are there how are we move it to
  cashless?
• Always start with the customer does he have a
  problem that the cashless instrument will solve?
• Do not use technology as a starting point to
  develop solutions.
• Payments is a two sided market - if you re not
  able to convince at least 80 to 90 of both
  sides (the payer and the payee) to join, you will
  fail.
• The offering has to work at a macro as well as a
  micro level.

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Eskom, S.A.

• Supplies 95 of countrys electricity
• Before 1994 only 12 of the rural population had
  access to electricity.
• How to reach electricity to the poorest of the
  poor?

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Overcoming the problems

• The problems it faced
• High cost of setting up the connection
• Non payment of the dues by the recipients
• High inefficiencies and high cost of recovery of
  funds
• Lack of involvement by the community.
• The answer

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Build Value create an ecosystem

• Set up an ecosystem to sell prepaid cards to feed
  the electrical meters.
• Local people were trained to install the systems
  and do maintenance.
• Thus ESKOM created jobs in the communities while
  recovering its electricity supply costs upfront.
• Even the rural unbanked were able to access the
  electricity.

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Lessons

• Over 300,000 meters were installed per year from
  1994 onwards.
• Eskom has 2.6 million pre-paid customers buying
  over 80 million prepaid cards annually.
• 90 of urban area and 40 of rural areas are
  electrified.

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Why cant a prepaid system help solve this?
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Why not octroi collection across the country?
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It wont be easy

• The will be huge challenges
• Cost containment
• Scaling the model millions of merchants and
  billions of transactions.
• Seamless movement of funds from one channel to
  another
• Seamless access across devices and technologies
• The answer CASH (not cash but C. A. S. H.)
• Connect Channels, Accelerate Acceptability,
  Systemic Change and Huddle.
• Huddle? Huddle!
• Or collaborate, cooperate, work together etc

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Vivek Nayakvivek_at_avenues.info
Thank you