Providing the benefits of digitized payments systems to one and all in the country is the mission for Naveen Surya, MD, ItzCash Card, India’s first non-banking entity to be allowed to carry out financial transactions
Naveen Surya
An omni-channel, omni-product strategy in payment systems? That’s precisely what Naveen Surya has adopted toservice customers, who are at the bottom and middle of the pyramid. The managing director of ItzCash Card, one of the top payments solutions company in the country, strives to provide the conveniences of digitized payment transactions to as many people as possible in the mass middle segment and beyond. And in this effort, he strongly believes only an omni-channel, omni-product strategy can succeed.
What he means by this strategy is that a customer can effect a transaction through a mode of his choice – cash, cards, internet, or mobile wallet – at over 60000+ lakh touch points his company has set up across the country.
“I will describe our target audience as the ‘unbanked’ and ‘underbanked’ population in the country,” explains Surya. “We largely cater to the mid section of the pyramid – specifically the mass middle income class population, the segment that is either unbanked or underbanked. Typically, a majority of this segment would have a bank account but that would have rather remained unoperational for several reasons. So, they depend on cash. Our intention is to help them participate in digitized transactions.”
ItzCash Card has been in business for the last 10 years in the payments and settlement space and it has witnessed the system transforming from a pure off-line model to an online digitized model and the transparency, efficiency and robustness that have come in its wake in the financial services sector as a whole. “But, what bothered us was the fact that unless the entire population is able to make use of the medium, there would not be any real benefit that would accrue to the country,” says Surya.
GROWTH IN CARDS
He explains further: “When we talk about digitization of the payments and settlements domain, we can talk about the exponential increase in the use of debit and credit cards, internet banking and now mobile banking. While in credit cards we have been witnessing growth in volumes, the platform has not been able to draw an impressive number of unique customers. Debit cards, on the other hand have seen a remarkable surge in customer base growing from a mere 10% to 40% in the last ten years.
“However, the challenge here still lingers since a debit card which has been designed as a multi-purpose device, is still mainly used as ATMs rather than on multiple spending platforms. This clearly depicts a typical customer usage pattern wherein people are not comfortable using the services of debit cards. Thus to unlock a huge potential market, there was a need for providing them the access to these services.”
He goes on to add: “I will broadly divide the customers into three categories. The first category can be described as the ‘knowledgeable ones’, who are able to make effective use of digital banking, including mobile wallets. The second is the ‘not knowledgeable ones’, who do not have any means to make use of the advanced banking systems, including credit or debit cards because of various socio-economic and other reasons. Unfortunately this segment constitutes as much as 55% to 60% of the whole population of the country. So, when they have to book a railway ticket or pay a utility bill, they have to travel to the nearest railway station or an extension counter outlet, stand in a queue and make cash payments, involving waste of their precious time. The third segment can be called ‘the knowledgeable ones but who are not able to make use of the digitized banking systems. This category may be aware of the digitized facilities but cannot afford to have credit or debit cards and may not be adept at using mobile banking or internet banking.”
TWO SEGMENTS
ItzCash Card caters to the last two segments through what Surya explained as omni-channel, omni-product strategy. Says he: “For example, a customer from the second category can book a railway ticket through our franchisees by just paying the cost of the ticket in cash and thereby avoiding spending time in travel and standing in the queue. Similarly, he can pay his utility bills too. As regards the third category, we can offer them our prepaid cards depending on their needs and these customers can make use of these cards like a debit card. Alternatively, if they have their own debit cards but do not have the confidence to make use of the internet, they can approach our franchisees with their cards and get the bookings done or the utility bills paid. In short, we serve the customer on the basis of his choice.”
ItzCash Card is India’s first non-banking entity that has been authorized by RBI under the Payment and Settlement Systems Act, 2007 to carry out financial transaction activities that help customers make use of the digitized instruments. Today, it has 60,000+ ItzCash World outlets across 3,000 tier I to IV cities; it has issued 110 million wallets (Open loop,Semi closed and closed loop), and on an average it carries out 500,000 transactions on behalf its customers every day through its channel.
One of the earliest efforts of ItzCash Card has been a prepaid card for the Dish TV DTH customers to renew their subscription anytime, anywhere. The card provides the customers payment options that are convenient, easier, faster through mobile and online. All one needs to do is go to the nearest ItzCash World Outlets and make direct recharge at the counters, or make payments through the vouchers using a mobile phone. Also the bills can be paid online.
“So,” says Surya, ” ItzCash World outlets can attend to payments requirements of customers in segments such as travel, utilities, shopping, mobile services, entertainment, donations, insurance and hotels. We undertake on our customers’ behalf payments towards electricity bills, water bills, mobile bills, gas bills, phone bills, tax bills, and DTH subscriptions.
PRODUCTS
As products, the company offers prepaid cards/wallets of all 3 kinds (open loop, semi closed and closed loop). It also provides money transfer services thereby helping the migrant workers to send money back home without any hassle. The money transfer service is available at the ItzCash World Outlets, enabling walk-in customers even without bank accounts to transfer funds to any bank account anywhere in India. Under this, a person can transfer up to Rs 10,000 a month to beneficiaries across 3000 locations in the country. ItzCash is one among the top two money transfer companies in India today.
“I will explain one specific advantage of our prepaid cards,” says Surya. “I can get such a card for say my driver and top it up with funds so that he can fill petrol, do shopping at my instance and also pay utility bills even as I keep tab of the spending. Similarly, such a card can be offered even to a house assistant taking care of her wages as also my urgent household expenses she may have to incur on my behalf. That way the cash transactions are curtailed.”
3 UNIQUE OFFERS
Surya lists out three of the company’s unique offers. “We have SaralItzCash, Octroi Silver Card and ItzCash Campus card. SaralItzCash is empanelled with UIDAI as an Authentication User Agency (AUA). The card enables disbursement of wage payments under MNREGA, cash transfer of food subsidy under Public Distribution System (PDS), social security pension disbursement, subsidies disbursements, labor welfare board disbursements and scholarships disbursements. The card is customized to Open Loop / Semi Closed Loop or Closed Loop programs. The ability to use prepaid services through POS machines/ ATMs, or on the internet and even over the phone provides the cardholder with access to many other user benefits unavailable to them previously.
Similarly, the Octroi Silver card, an exclusive close ended card was designed for the Municipal Corporation of Greater Mumbai and State Bank of India, for collection of octroi in Mumbai. It was a successful project which was undertaken to automate the collection of octroi at traffic checkpoints. The card was exclusively used by truck drivers for bringing building material into Mumbai region.
“ItzCash has NFC based card, that provides students the convenience of fulfilling all their needs – for payments and purchases. Students and faculty at IIT, Bombay make use of such card for all their campus requirements like payments for stationery, library, mess, etc.”
CASH TRANSACTIONS
Does he think the country can cut down its cash transactions given the way cash continues to be the prime medium of transactions in the country today? What are his proposals?
“I believe so,” says Surya. “I’ll give you a simple example. Take the case of MFIs. If they adopt a prepaid card system for their operations, the entire operation can be cashless. They can provide prepaid cards to the beneficiaries into which they can transfer funds. The beneficiaries can also link the cards to Aadhar by which the DBT can happen. Payments up to Rs10,000 into these cards can be done with minimum KYC, while higher amounts would need full KYC. The repayments of loans can be done through these cards. When the beneficiary is in need of cash, he or she can walk in to an ATM and draw cash. This can be an end-to-end solution and I am of the view that this can be replicated in other scenarios as well.”
AWARENESS
Surya is, however, circumspect: “In spite of being a pioneer in creating an ecosystem where cash transactions are minimal, I would say we have to go a long way still. For example, the need to create awareness about these conveniences. While we aspire to cover the whole of the unbanked and underbanked population with our Omni-channel and multi products, we need to make sustainable efforts to create awareness about our products and services, using one on one engagement tools and other medium of communication.
