Building Indian Mobile Banking: mChek CEO Sanjay Swamy (Part 6)

SM: Where are you seeing traction in terms of income level?

SS: It is unbelievable how wide our customer base is. We were sitting in a meeting with one customer who said it was a high-end niche product, and that they would be happy to roll it out but expected it would remain a niche offering. Then, during the meeting they offered us tea or coffee, and the office boy who came in saw the materials and asked his bosses if their company was going to launch mChek as well. Their bosses were surprised to find out he pays his cell phone bill with mChek.

While the early adopters will be higher income people, long term these people have alternative options such as Internet connections at home. The lower income segment in India, which does not have a land line and did not grow up with the legacy of having a bank to do the payments, will find this is a tremendous convenience. I think we will get a lot of traction with that user base very soon. For them it is absolutely the only alternative they have to standing in line. It levels the playing field.

SM: It must still be a segment that has a bank account.

SS: Yes, but if you look at India there are over 300 million bank accounts. There were 100 million land lines and 500,000 home Internet connections. There is still a large number of people in that segment. My goal is very simple – can we add 50 million bank accounts every year? Can we use this to entice people to enter the banking system, and can banks use this as a means to serve the customers that they could not afford to serve earlier?

SM: Is that happening?

SS: It is still early, but there are a couple of banks starting out. We have a couple of banks looking at this and realizing if 50 million SIM cards are going out with a secure wallet application which is approved by VISA, then their customer service costs drop drastically. I think it will change the face of banking. Most people use a bank to facilitate their transactions. I think there are a large number of people who want to use the banking and credit systems but it is too difficult for them, and costs banks too much to serve them, and we can change that.

The ideal situation is when you can get a $20 credit card. For someone who is making $2 a day, a $20 credit card is very attractive. For banks it is impractical to service them.

SM: It almost moves into the realm of microfinance.

SS: That is where we provide a channel that reduces operational costs and makes it viable to the banks and microfinance industry. The smart card applications the microfinance industry has used required equipping merchants with a very expensive system to read and process the smart cards. In our case it is just a SIM card, and all of the relevant parties probably have it already.

SM: Have you done any work with microfinance institutions?

SS: We are doing some pilots right now. They are going pretty well but nothing I can publicly disclose.

This segment is part 6 in the series : Building Indian Mobile Banking: mChek CEO Sanjay Swamy
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