I was jut updating a presentation about
The presentation was from May 2011 and
talked extensively about Google Wallet, Square and M-PESA.
One year on and the presentation still
talks about the same things but I am shocked and amazed about how much things
have changed in just eighteen months.
For example, the focus of the presentation
was mainly on M-PESA, NFC contactless mobile payments and the impact of Google
Eighteen months later, and the focus is
firmly upon Square and the rise of mobile payments in other territories like
Now I’ve written lots about Square, so I’m
not going there – although I love the fact that it was originally going to be called
Squirrel – but the Indian story is a newer one
that I’ve only just garnered, so it’s worth repeating here.
Now we all know that India is a massive
market with over a billion consumers.
Like China, it could be the largest market
for new forms of banking and is already showing signs of doing things
This is in part due to the Reserve Bank of
India (RBI) managing a strategic rollout of mobile payments to encourage
According to the EIU report I referred to
- A third of the Indian
population are completely unbanked;
- 55% of the population has a
- 10% have life insurance;
- 90% use cash to pay for their
- Money orders and cheques
dominate fund transfers; and
- Only a tenth of India’s 630,000
villages have a bank branch.
Over the past two years, RBI has granted 17
wallet licenses to mobile carriers.
There are restrictions with the wallets, e.g. you cannot get cash out
unless the carrier has partnered with a bank, but that has not stopped the developments transforming the country almost
And it is not just the actions of the RBI
but also the encouragement of the National Payments Corporation of India (NPCI). NPCI is India’s ACH. Owned by the banks, PCI has been running an
interbank mobile payment systems since November 2010 and, by June 2012, 36
million people had registered for the service.
The results have been phenomenal
- There were 3.34 million mobile
banking transactions in June 2012 worth Rs 3067 million (US$55 million), more
than double from a year earlier
- There was a 143% year on year
growth in volume and 211% YoY growth in value of transactions.
Source: the Economist Intelligence Unit
Even more noteworthy was the announcement of
NPCI to expand the mobile payments service to retail payments last week, as this could ignite a flame of change.
Initially the NPCI services was purely for
P2P payments,. Now that mobile merchant payments are allowed it should
dramatically increase commerce as, today, there are just 600,000 point of sale
terminals in India shared amongst ten million merchants.
So, this announcement by the NPCI is like
offering Square for India, but in a country where ten million merchants and a
billion people have been unable to transact effectively before.