Tuesday, March 23, 2010

Banking to the Masses via mobile phones

Eko, an Indian start-up that has partnered with State Bank of India (SBI) to provide mobile banking to the millions who would otherwise never realize the benefits of modern day banking, has truly chartered a course in building a business aimed at the 'Bottom of the Pyramid' espoused by C K Prahalad.

The business model is straightforward and focussed.The primary problem Eko tries to address is to get the millions of Indians who have never had an account in a bank to benefit from banking services. Eko tries to solve this problem by using the ubiquitous mobile phone as the channel. The “tellers” are the tiny corner groceries that dot every neighborhood and street corner in India’s crammed urban areas and expansive rural areas. A Eko customer pays another person by typing the bank’s short code, then an asterisk, then the mobile number of the person being payed, then an asterisk, then the amount, then another asterisk and finally the "signature". No SMSing, No WAP, No GPRS required.

The signature is another innovation. Each Eko customer has a mini pocket booklet that contains 11 digit codes. Each 11 digit code has 4 black marks positioned randomly at any of the 11 digits. The person needs to enter his/her 4 digit  pin against these black marks. Verisign has endorsed this method !

Tuesday, March 02, 2010

Business as Usual or Business Unusual !

Paypal was suspended by the Reserve Bank of India (RBI) last week from performing bank withdrawals for exports of goods and services. This affected businesses as well as personal remittances that expatriates from abroad used to send into the country. The problem was basically that of getting Paypal to toe the line of the country's regulations which needs the governing bodies to keep a tab on the nature of merchant transactions happening and also the nature of remittances. 

As business start expanding globally, there comes the headache of tweaking your operations to comply with local rules and regulations. While this is no doubt a hurdle to overcome, it becomes difficult at times for businesses originating in democracies to digest the draconian laws that govern closely guarded economies. Take the instance of China. Google has entered the market but has found the gagging of search results by the government stifling. So much so that it has had to be content with a 2nd position in the Chinese market. Its own "Do no evil" proclamation has come back to bite it as it grapples between the big business opportunity in China and steadfast adherence to its principal.

The problem is highlighted since neither party involved can claim moral high ground. One wants to preserve their hold over power or to see it the positive way its way of life; the other wants to expand its business to the worl's most populous state or to see it the positive way connect 1/6th of the planet's population to the rest of the world.

Paypal's case was more straightforward....right? Enterprises and their compliance to geo specific laws are a fine balancing act that companies are forced to do as they expand the businesses at a pace unseen of in the  last decade

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