Dr. Sumit Chowdhury the Vice President and partner at IBM Global Business Services is widely known as the industry leader for the Communications, Media, Entertainment and Energy industries. Sumit has held key offices at Reliance Communications, Reliance Tech Services and KPMG. He has authored several papers in Refereed Journals and Conference Proceedings. Sumit has been a regular speaker at widely attended Industry events on management and technology.
The different aspects of the M-Payment in the country. are:
1. M-Payment: Figures
Flaunting the figures related to the size and market value of Mobile Payment, Sumit said, “The estimated mobile payment transactions by 2013 would touch the figure of 300 billion which will carry a total money value of $860 billion. Here average value of per mobile transaction is less than $3. However, there is an acute requirement for wafer thin costs for a sustainable model.”
Flaunting the figures related to the size and market value of Mobile Payment, Sumit said, “The estimated mobile payment transactions by 2013 would touch the figure of 300 billion which will carry a total money value of $860 billion. Here average value of per mobile transaction is less than $3. However, there is an acute requirement for wafer thin costs for a sustainable model.”
2. Payments Market Place
Various Payment Markets involved in the process of Mobile Payment which Sumit mentioned are P2P Payments (Domestic and Cross Border), Retailer payments (Mobile Gateway and Alt. Channel Authorization), Biller payments (Real time billing and Batch billing) and Mobile POS payments (NFC Payments and RF payments).
Various Payment Markets involved in the process of Mobile Payment which Sumit mentioned are P2P Payments (Domestic and Cross Border), Retailer payments (Mobile Gateway and Alt. Channel Authorization), Biller payments (Real time billing and Batch billing) and Mobile POS payments (NFC Payments and RF payments).
3. Economic Drivers
“The Revenue Model formula must be derived from the outcome of fixed transaction fees versus the percentage of transaction value. Also, the ways of customer retention and acquisition must be adopted i.e. interaction values done during the transactions done can increase the customer intimacy with the brand. This will definitely result in lower churn and higher customer profitability.”
“The Revenue Model formula must be derived from the outcome of fixed transaction fees versus the percentage of transaction value. Also, the ways of customer retention and acquisition must be adopted i.e. interaction values done during the transactions done can increase the customer intimacy with the brand. This will definitely result in lower churn and higher customer profitability.”
Sumit on reducing the cost involved in the M-Payment phenomenon said, “Cost Elimination and Mitigation solutions must be deployed in the whole process. Innovative solutions required immediately to reduce cost.”
“The Return on Investment should be calculated accurately and carefully. The success of the model depends on the ROI generated. Scale is an important factor for a better ROI.”
4. M-Payment: Competitive Scenario in India
“Every Telco is creating a payment platform (or have an RFP). Every Bank has created a mobile payments platform. NPCI has created a inter-bank settlement engine for payments transfer between Bank Accounts.”
“Every Telco is creating a payment platform (or have an RFP). Every Bank has created a mobile payments platform. NPCI has created a inter-bank settlement engine for payments transfer between Bank Accounts.”
He further added, “Every player wants a revenue share in absence of a definite size of market (How much of the cash-economy will move to digital economy). Thus, for every transaction the cost has to be shared among Telecom operator, Merchant, Telcos m-Payment technology platform, Bank, NPCI and Bank’s m-payment technology platform.”
5. Payments Marketplace Economics– Monopoly, Duopoly or Competitive
“The most efficient marketplace is a Single Exchange model. More the number of players in the chain, the more the transaction fee is shared between the players. The transaction takes longer to complete as you switch between exchanges. Merchants have to enroll into multiple exchanges.”
“However, Payment Industry is monopolistically competitive market. There are many producers and many consumers in the market, and no business has total control over the market price. Consumers perceive that there are non-price differences among the competitors' products. There are few barriers to entry and exit. Producers have a degree of control over price.”
6. Steps to improve the statistics
“We desperately need a single integrated Cloud which would include minimal cost and provide customer with a seamless consolidated system. Moreover, the players involved must leap frog into an optimistic payment marketplace, where Two major platforms and two niche players should co-ordinate and must be Telco and Bank agnostic.”
“We desperately need a single integrated Cloud which would include minimal cost and provide customer with a seamless consolidated system. Moreover, the players involved must leap frog into an optimistic payment marketplace, where Two major platforms and two niche players should co-ordinate and must be Telco and Bank agnostic.”
"The parties involved must focus on merchant enrollment and inter-operatibility of platforms. Make it easy for the market to grow. This will lead to a Long-term equilibrium.”