Archive for the ‘Uncategorized’ Category

Five Reasons Why PayTM Is Miles Ahead Of Its Competition

Friday, January 20th, 2017

With over 100 million users a year ago, PayTM was way ahead of its competitors well before the Nov. 2016 demonetization of high value currency notes in India. On the back of the push for #CashlessIndia consequent to #CurrencySwitch, the Alibaba-backed mobile wallet has increased its lead over other mobile wallets (e.g. MobiKwik, PayZapp) and account-to-account money transfer apps (e.g. UPI). Today, PayTM boasts of 150M users (Source: Wikipedia).

Based on my personal experience and anecdotal evidence, I advance five reasons to explain PayTM’s overwhelming popularity.

#1. Ease of Onboarding Merchants

Merchants can sign up for PayTM without a bank account. They can receive money into their PayTM wallets without a bank account. They can even spend their wallet balance by shopping at other merchants that accept PayTM payments. It’s only when they want to cash out their money from their PayTM account that they need a bank account.

As a result, PayTM was / is able to sign up hundreds of thousands of merchants that don’t have bank accounts. These merchants could sign up for PayTM immediately after the demonetization announcement, start accepting payments and visit banks in parallel to open their accounts as their PayTM account balances were growing.

This was / is not possible with competing e-wallets, which insist that merchants link their bank accounts (or debit cards or credit cards) at the time of installing and onboarding their respective apps. As a result, PayTM’s competitors were not in a position to sign up financially-excluded micromerchants at the point they desperately needed to accept cashless payments. They lost this huge market to PayTM.

#2. Viral Distribution

When PayPal launched in the late 1990s, it incented existing users to send money to non users. When users sent money to their friends and family members (that were not on PayPal), PayPal sent them an email saying “Collect $$ by signing up for PayPal”. This give non-users a far more compelling reason to join PayPal than any direct advertising or PR efforts and generated a massive viral distribution for PayPal.

PayTM has copied this approach. And has reaped the rich rewards à la PayPal.

PayTM’s Viral Distribution Strategy

Surprisingly, PayTM’s competitors haven’t followed this approach. They insist that payments can be made only to people that have already signed up to their e-wallets.

To take the example of UPI, to receive payments, you need to have a Virtual Payment Address (VPA) from your bank. Assuming that you’re thorougly sold on UPI and decide to create your VPN, you’ll need to contend with your bank’s systems to actually generate one. This adds a big moving part, which doesn’t always work. Just today, I got an SMS from my bank saying they can’t issue new MMIDs – an integral part of IMPS, the payment rails on which UPI works – for the next five days. There’s no guarantee that you’d still be interested in UPI five days later.

A few PayTM competitors I spoke to told me that sending money to a non-user would be tantamount to putting the cart before the horse. Indeed, it would. But, as I’ve said time and again, Putting Cart Before Horse Does Work. PayTM and PayPal get it. Many of their competitors don’t.

#3. Feet On Street Approach

In the weeks following #CurrencySwitch, PayTM salespersons made daily rounds in retail hotspots asking storekeepers if they wanted PayTM.

I’ve seen this personally in my building storefront that’s dotted with teawallah, fruit juice vendors, pan-cigarette sellers and other micromerchants.

I also heard more details of PayTM’s aggressive merchant acquisition drive from a Uber driver.  According to this cabbie who accepts PayTM on his personal name – PayTM is also Uber’s official digital payments partner – PayTM sales reps ride on their motorbikes up and down a street near Pune Airport where hundreds of Uber and Ola taxis are parked, asking drivers if they wanted to sign up for PayTM. When a driver says yes, the rep connects the driver’s smartphone on his own 4G network using tethered WiFi hotspot, downloads the app, installs and onboards the driver on PayTM. All this in 5-10 minutes. Without being judgmental about whether the driver is tech savvy or not. And at no data charges to the cabbie. This Uber driver is so conversant with PayTM’s onboarding process that he even knows the PayTM rep’s sales quota (10 merchants a day)!

In sharp contrast, most competitors of PayTM haven’t harnessed the power of feet-on-street approach to recruit small merchants. To see just how detached they are from market realities, an investor in a digital payments company placed the focus of merchant acquisition of his investee company on self-service. In his MEDIUM article, he said,

Merchants should be able to go to an Amazon or Flipkart site or a Croma store and just buy a terminal at their own cost and link their bank account and start accepting payments.

Well tried. Even if they’re tech-savvy, crazy busy merchants just don’t have the time for self-service, especially when they’re busy getting pampered by the nation’s #1 mobile wallet company!

As a result, most micromerchants I’ve quizzed are not even aware of UPI, BHIM and other competing e-wallets.

#4. Frictionless Payments

By design or default, the Sign Out link in PayTM’s mobile app is buried deep inside the app. As a result, many users have never seen it and stay logged into their app all the time. This means they’re able to make a payment without a password or PIN.

This creates a significant security vulnerability in PayTM. But it also makes the mobile wallet’s CX that much more frictionless, which matters a lot when people need to use it to make payments several times a day.

Security is a hygiene factor. Convenience trumps security. Everytime. Even in India.

PayTM has capitalized on this element of consumer behavior. Its competitors haven’t.

#5. Miscellaneous

As I’d highlighted in Hiding Your Secret Sauce, PayTM preloads its wallet on the fly without user intervention. As a result, users wary of having to topup prepaid mobile wallets before initiating payments find the PayTM experience superior to that of mobile wallets, which bump them off with a message asking them to load enough money into their wallets first and then reattempt the payment.

PayTM is also very well funded and is able to absorb losses on every transaction.

While these factors contribute to PayTM’s dominance of the digital wallet space, I tend to believe they’re secondary to the aforementioned ways by which PayTM has differentiated itself from its competitors.

With PayTM’s lead over other e-wallets and the reasons for that out of the way, let me come to its detractors who point out that PayTM’s dominance is only a thing in the present. I agree with that.

Some of the detractors have gone to the extent of predicting PayTM’s demise in view of competition from BHIM, a government-sponsored m-wallet. I think that’s highly exaggerated.

That said, PayTM does face a few headwinds:

  • Sustaining relationships with merchants with daily sales of INR 50K+. This category of merchants includes vegetable vendors and fruit sellers among others who find its cap (INR 20K per month without KYC, INR 100K per month with KYC) too low. I know at least two merchants that have bailed out of PayTM for this reason. (Interestingly, they’ve gone back to cash, which suggests that PayTM’s competitors couldn’t recruit them either)
  • Willingness of PayTM’s Chinese backer to fund the company’s cashbacks and mounting losses.

As they say, past performance is no indication of future success. This maxim is as true for PayTM as any other company. Only time will tell how long India’s #1 mobile wallet will hold on to the top spot.

Should I Look For An Alternative To Amazon India?

Friday, January 13th, 2017

Since I wrote Strange Happenings In Amazon India, I went through another experience with Amazon India. It was so strange that it merits a separate blog post. Here goes.

I’d recently ordered a leather wallet from Amazon India. When I received it, I realized that it didn’t have a coin pouch. Therefore, I wanted to return it. I logged in to my Amazon India account to initiate the return. During the process, I was taken to the the refund screen where I’d to select whether I wanted the refund amount credited to a Gift Card or my Bank Account. I selected the second option. I was about to enter my bank account details when I saw two entries already listed there. I was shocked at this because:

  1. I’ve never set up any bank account on Amazon.
  2. The first entry was in my name but showed an account number that wasn’t mine.
  3. The second entry was in the name of “Mueller Schmidt” (for the uninitiated, this is the German-language equivalent of “Tom Dick & Harry”). Given that Amazon insists that the account must be in my name, I was wondering how such a wildcard account could be set up under my login.

All this reeked of a data breach and, that too, by an insider.

My suspicions were confirmed a few days later when I received an email from Amazon India stating “we discovered that your email address and password may have been compromised”.


I deleted both the bank accounts in the refunds section. I also took the opportunity to delete all my credit cards on file in the payments section. This meant that I’d be even more resolved to use my preferred payment mode of Cash on Delivery in future. But I digress.

I then proceeded to enter the details of my bank account into which I wanted my refund amount to be transferred. The CONTINUE button at the bottom of the form was dimmed. I didn’t know how to proceed and bailed out.

I didn’t get any email or SMS confirmation for my return request. Nobody turned up at my doorstep to pick up the product, either.

It was obvious that my return request hadn’t gone through.

I went back to the returns screen and selected the Gift Card option instead. The CONTINUE button was now activated. I clicked on it and scheduled the pickup date and time per my convenience. This time, I did get a confirmation for my return request. A couple of days later, the collection guy landed up randomly without paying any heed to the pickup appointment selected by me. Luckily, since I was at home when he turned up, I was able to hand over the product to him.

This experience made it clear that Amazon was issuing refunds only in the form of store credits. In other words, it was forcing consumers to spend their refunds on Amazon.

I didn’t like this practice when India’s #1 ecommerce player Flipkart tried it earlier last year.

I didn’t like it when Amazon was trying to the pull the same trick on me now. It’s no different from the traditional practice of brick-and-mortar stores who are supposedly getting disrupted by Amazon and other new-age ecommerce sites.

This is not the kind of CX I expect from Amazon, a brand for which I exhibit cult loyalty.

If things continue like this, I may be compelled to end my 15+ years of association with Amazon and move my custom to another etailer. Luckily, “winner takes all” is not yet a thing in the Indian Internet services business, so I’ve a fairly long list of alternatives to Amazon India.

Putting Cart Before Horse Will Work In Achieving #CashlessIndia

Friday, January 6th, 2017

On the back of the demonetization of high value currency notes in India, the government has been aggressively pushing cashless payments. Trending on Twitter under the hashtag #CashlessIndia, the initiative has attracted criticism from the blogosphere and mainstream media on the grounds that India is not yet ready for digital payments. The average urban business-sensitive citizen seems to echo the same sentiment, judging by the results of the following poll conducted by Economic Times.


See MediaNama article titled Cash vs Digital Money: why going cashless is going to be tough in India for a comprehensive coverage of this point of view.

I don’t disagree with this viewpoint. In fact, I’d highlighted a few more hurdles to going cashless in my recent post PSA: Don’t Get Defensive About Not Going Cashless:

#5. Reluctance of Banks to Issue Merchant Accounts (aka POS Machines)
#6. Cash-Out Costs & Delays
#7. Card on Delivery Limitations

Attempting to drive cashless payments without overcoming these hurdles is a classic case of putting “the cart before the horse”, as Harvard Business Review observes aptly.

Does it mean India should fix these fundamental issues first and only then attempt to go cashless?


Why not?

Because some of these hurdles won’t go away anytime soon. Take infrastructure for example. Like physical infrastructure like roads, bridges, etc., network infrastructure also has a way of attracting more and more traffic until it becomes inadequate in a vicious cycle, reflecting the German proverb that translates to “The appetite grows as you eat”. Even in the Bay Area, which is the de-facto Mecca of technology, network connections are patchy at times. Core banking, card management & other payment systems break down not so infrequently everywhere in the world, leading to failed payments. That’s why waiting for 100% readiness of infrastructure to push digital payments is an exercise in futility. (I’ve always maintained that a robust business model is the real critical success factor for digital payments but that’s a blog post for another day).

Also because a certain degree of jugaad and leapfrogging of technologies has always been a part of the Indian DNA in several areas. For example:

  1. I once visited a village in Tamilnadu, a state in South India. This village got TVs first, then the electricity connection required to power the TVs! More on this experience in my blog post Putting the Cart Before the Horse Does Work!
  2. As the legend has it, doyens of the Indian IT industry set up their development centers in the Mariwala area of Bangalore in the early 1990s well before there was a paved road to access the facilities. It was only after they staged protests to call the attention of politicians to their employees’ plight that the local authority built proper roads in this neighborhood. Had they waited for infrastructure first, IT Services might not be a $140 billion business for India today.

IMO, we shouldn’t sacrifice our competitive advantage just to follow the Western left-to-right, top-to-bottom approach towards nation building.

Good news is, based on the following early indications in the last two months, India can easily achieve 50% reduction in the use of cash without necessarily waiting to overcome the hurdles in front of digital payments.

#1. Debit Card Activation

200M out of the 755M debit cards in India were activated only after the November 2016 demonetization.

What stopped them from being activated earlier?

#2. Card Promotion Campaigns

My bank ran an SMS campaign to promote card use two days after demonetization.

Why did this bank have to wait for #CurrencySwitch to stimulate card use when it has been in the card issuing and acquiring business for over 20 years?

vaishali#3. If Vaishali Can, So Can Others

This iconic restaurant in Pune started accepting card payments within a week of #CurrencySwitch.

Why was it hung up on cash for 40+ years of its existence?

#4. Factory Worker Salary Payments by Cheques

According to Times of India dated 12 December 2016, the Indian government has made it mandatory for wages of factory workers to be paid by cheques going forward. When I read this, I was, like, duh?

I began my career as a Graduate Engineer Trainee in a factory in 1985. I got my first paycheck by, well, cheque.

30 years later, why haven’t cheque – or the myriad other forms of cashless – payments become the norm for payment of wages for factory workers?

#5. Newspaper Vendor Accepts Cheques

Enough of questioning others. Time for introspection.

I’ve always been paying my newspaper vendor by cash. Prompted by the recent cash crunch, I asked him last month if I could pay him by some form of cashless payment. He nodded and pointed to a line in his bill that provides drawee details for cheque payments. I was shocked! His bill has remained unchanged ever since he started delivering newspapers to my home over ten years ago.

Why didn’t I notice earlier that he has always been accepting cheques?

While many people – including me – prefer cash for good reasons, the above examples suggest that there’s a vast segment of the Indian population that has shunned cashless methods of payments because, to put it simply, “old habits die hard”.

I won’t comment on whether a democratic government has the moral authority to force its citizens to shed their old habits and foist a new payment behavior on them. Personally, I’ve no hassles with cash. I foresee that, in the immediate term, the switch to digital payments will cause a lot of chaos due to failed payments, identity theft and cyberfraud. I’m not one of those people that naively believes that cash implies malafide activity and noncash implies guinuine activity.

But we do have a democratically-elected government that wants to push cashless payments. If we accept the reality as it is, the above examples make me confident that demonetization alone will provide the required stimulus to pump up cashless payment volumes from the present 2% to at least 50%.

I’m not alone in saying this. According to the aforementioned HBR article, “demonetization move is a welcome shock necessary to get a cash-intensive society weaned off its addiction and onto modern systems of digital payments”.

It’s only to raise cashless payment modes to levels beyond 50% that overcoming the fundamental hurdles to digital payments would be required.

In other words, putting the cart before the horse will work for now.

Yaay I Made It To The Financial Services Content Royalty List!

Friday, December 23rd, 2016

I’m happy to announce that I have been named to The Royalty of Insightful Financial Services Content list.

Compiled by Bryan Clagett, CMO & Investor in Geezeo, a proven white-label PFM provider for banks and credit unions, this list places me in the august company of Ron Shevlin, Jim Marous, Stessa Cohen, Brett King, Chris Skinner and seven other fintech titans largely in the United States.


A big thank you to Bryan for this recognition.

Readers would be aware that I blog and comment frequently about fintech-related topics. There are 90 posts in this blog on the topic and some more in my personal blog before I started the company blog. In addition, I’ve left over 2500 comments on Finextra. The latest five posts on fintech on this blog are as follows:

  1. PSA: Don’t Get Defensive About Not Going Cashless
  2. Fintechs Need Guts More Than Lawyers!
  3. Enhanced Remittance Data Could Multiply Electronic Fund Transfer Volumes
  4. Five Ways For Banks To Boost Credit Card Use
  5. Banks Will Know Chipotle Is Going Bankrupt Before Chipotle

My deep involvement in finserv reflects my passion for the field and decades of experience in marketing, sales, delivery and program management of technology solutions for banking, financial services and insurance companies worldwide.

g360-marketing-collateral-library-pinterest-board-imageApart from the content published in the public domain, my company develops dedicated marketing collateral for fintech solution providers. Comprising of a wide array of items like flyers, offering detail presentations, account specific point offerings and social media updates, our content can be used at various funnel stages by growth stage fintech vendors to elevate the appeal of their offerings, grow their sales pipelines, spot new revenue models, increase ticket size, shorten sales cycles and multiply returns from their technology assets in many more ways. Click here to view our Pinterest marketing collateral board.

If you clicked through to Bryan’s article, you’d have noticed his question ‘What does the “S” in “S.Ketharaman” stand for?’ and wondered the same yourself.

Here’s a short answer: It’s meant to be a conversation starter.

Click here if you want to know the long answer.

Humility is not my strong suit – readers and followers might have noticed my customary omission of the H from IMHO in my blog posts, comments and social media updates. However, on this occasion, I’m truly humbled to be a part of a list which includes many financial services content giants.

Happy Holidays!

How To Keep Card Interchange Charges In Check

Friday, December 16th, 2016

In a recent editorial titled “How To Reduce Card Interchange Charges”, Economic Times advocates a combination of subsidy and competition to reduce merchant fees for accepting card payments.

In case you missed it, the government of India has been aggressively pushing cashless payments recently after it demonetized the INR 500 and 1000 notes (and announced plans to introduce new design notes in INR 500, 1000 and 2000 denominations). Since payment card is the most widespread mode of cashless retail payments in India, there’s a renewed focus on stimulating the use of debit and credit cards and, not surprisingly, Merchant Discount Rate has quickly entered the policymaker’s crosshairs.

At the outset, Economic Times’ suggestion of subsidy is novel. It also sounds fair – after all, if banks and government benefit from the move to a cashless regime, they should be willing to pass on some or all of their gains to merchants and card networks.

However, given that banks and government have their own deficits to plug, what’s the guarantee that they won’t appropriate the gains from going cashless for themselves? Besides, ET bases its advice on an assumption of 2% MDR, which is only applicable for credit cards. Given that India’s central bank cum banking regulator Reserve Bank of India has set debit MDR at 0.75-1% (Source: RBI) and the fact that debit cards outnumber credit cards by 30:1 in India, it’s quite possible that the blended rate arrived at by using ET’s formula could actually exceed the statutory debit MDR.

So the subsidy option may be out.

Let’s see if we can replace it with something else.

Looks like we can. Think enforcement.

RuPay charges a fixed debit interchange of 60 paise to Issuer Bank and 30 paise to Acquirer Bank in India. Which is quite low. For the uninitiated, RuPay is a (relatively) new card network launched by National Payments Corporation of India, a wholly-owned retail payments subsidiary of RBI, which in turn is wholly-owned by the government of India. As of now, RuPay offers only a debit card that works only within India.

As against the fixed fee levied by RuPay, Indian banks – including public sector behemoths like State Bank of India – seem to be getting away by charging an ad valorem rate of as high as 2.95% for RuPay transactions.

As noted earlier, RBI has set the MDR for (non RuPay) debit transactions at 0.75-1%. However, in actual practice, the rates charged seem to be much higher.

I stumbled upon this fact when talking to a few co-workers recently about fuel surcharge on digital payments.

I’ve been using credit card for tanking up my car for ages. I’ve always noticed that my credit card statement displays a higher amount than what I pay at the pump. To take an example, I recently filled up fuel worth INR 1600. This was the figure mentioned on the chargeslip I received from the gas station and in the realtime SMS alert I got from my card issuing bank. However, when the credit card statement came a month later, I noticed that it showed a higher value of INR 1646.00 for this transaction. That means the bank has slapped an additional charge of INR 46, which works out to 2.875% on the base figure of INR 1600. The very next line was PETRO SURCHARGE WAIVER for INR 40.16. In effect, the bank – not the gas station – billed 2.875% more and refunded almost all of it back in the form of the waiver. I effectively overpaid INR 5.84 (being INR 46 – INR 40.16) for choosing a cashless mode of payment. I think it’s due to non-recoverable government taxes on the surcharge. Since the amount was small, I’ve never bothered to investigate it. (Considering that 90% of cardholders apparently never read their statements, I seem to already be investigating them a lot!)


My co-workers told me that they’re slapped a similar surcharge even when they pay for fuel by debit card. In other words, banks charge nearly 3% extra when RBI has mandated a maximum MDR of 1% for debit card.

So there’s clearly an opportunity to enforce existing MDR rates to bring down the charges.

Let me move on to working out a “fair” MDR rate.

ET recommends using the public sector card network RuPay’s calculations of cost of processing a card transaction as the baseline in arriving at a fair MDR rate.

Going by experience, forget international companies like Visa / MasterCard, it’s questionable if the legions of card issuing and card acquiring banks – even public sector banks – will accept RuPay’s version of the cost. They have different software, infrastructure and uptimes, not to mention bonuses for their honchos!

In fact, it’s questionable whether these corporations will even agree to the cost-plus method of pricing their services implied by ET.

Now, let’s assume government doesn’t bother with all the niceties and just issues a diktat to slash interchange rates. Before someone points out that governmental interventions don’t have a place in a free market like India, let me highlight two examples wherein governments of free market pantheons have mandated card interchange rates (although they did so after lengthy public consultations in those countries, but that’s a story for another day).

  1. EU fixed credit interchange at 0.3% (Source: Adyen)
  2. The Durbin Amendment capped US debit interchange fees at 24 cents per transaction (Source: Bloomberg).

With the basic right of the government to intervene in this matter established, let’s see how another related mandate has been working in actual practice.

Over six months before the recent remonetization move, the Indian government had issued a diktat to its public sector undertakings to stop levying fees for accepting payments via debit card / credit card / bank transfers. However, I know at least two PSUs that continue to levy their previous fees for digital payments.

So, once again, better enforcement of existing rules will help bring MDR under control.

Finally, let me turn to driving competition via RuPay, another approach advocated by ET.

For the uninitiated, payment card is a multisided business that endows incumbents with a huge “network effect” benefit.


It’s very difficult to unseat the incumbents in this business. Local card networks like Discover, JCB and MBNA have failed to make a dent on Visa and MasterCard despite trying for decades with equally compelling offerings and multicountry presence.

There’s only one notable exception to this. I’ll come to it in a bit.

Visa and MasterCard are the incumbents in the card network business virtually everywhere in the world including India. RuPay is the new kid on the block. A merely lower MDR rate won’t help RuPay fight Visa and MasterCard.

What will?

China UnionPay can offer a few lessons on that subject. It’s the only local card network to make a dent on Visa / MasterCard. It offers both debit and credit cards. While it started locally, it quickly took the battle to Visa / MasterCard’s backyard by aggressively expanding overseas.

For RuPay to make a difference, it needs to offer both debit and credit cards and operate internationally. In other words, the Indian government needs to empower NPCI to become a full-service card network with global footprint. Only then will it be able to use RuPay to keep Visa / MasterCard’s MDR in check (though not necessarily low).


India already has in place the policy framework and the building blocks of competition required to drive low merchant discount rates (or at least keep them in check). What it needs now is tighter enforcement of its policies and greater empowerment of NPCI to “go ye forth and conquer” the card business globally!

Five Ways To Fight Online Jingoism

Friday, December 9th, 2016

In Do You Face Online Jingoism? I Do, I’d given several examples of online jingoism.


Image Courtesy: Radhika Iyer*

Jingoism may not bother 90% of Internet users who reportedly only skim through articles and updates i.e. “consume” content. If you’re one among them, you can safely skip this blog post.

On the other hand, jingoism can harm the remaining 10% of Internet users that use digital media professionally as a part of their content marketing strategy.

If you belong to the latter cohort, welcome to this post, where I’ve outlined five ways to fight online jingoism.

#1. Mask Your Location

You can use ÜberTwitter to obfuscate your physical location in your online profiles. For example, take the following Twitter profile:


As you can see, where people generally write their country or city name, this user has entered his lat-long coordinates, so his location is not visible. This is the first time that I’ve seen someone taking this approach, whether they’ve done so to hide their location or otherwise.

Certainly, you can pluck out the two numbers and enter them in Google Maps search box to learn that this user’s location is Bangalore. However, you can use this technique to obfuscate your location well enough to ensure that you don’t become a sitting duck for jingoistic remarks.

#2. Involve The Publisher

In response to the jingoistic remarks described in Example A in Do You Face Online Jingoism? I Do, I appealed to the publisher to change its policies that indirectly encourage such remarks:

Ketharaman Swaminathan – GTM360 Marketing Solutions – Pune | 24 June, 2016, 09:54

This is not the first time I’ve come across a country-agnostic comment by one commenter (e.g. John Candido – Black Cabs – Melbourne) to be parsed / interpreted / steered by another commenter towards a specific country inferred from the former’s profile.

This is not such a big deal except when the latter is anonymous and there’s no country listed against them.

To establish a level playing field, I request @Finextra to either (A) stipulate that comments from anonymous members should not include unprovoked references to a country (hard to implement?) OR (B) mention the country of anonymous members (easier to implement?).

While I’m biased, I’ve a strong reason to believe that this technique works. More on that in a bit.

#3. Preempt The Attack

Whenever I guest blog on global media outlets, I anticipate jibes – subtle or otherwise. So, wherever possible, I preempt them by providing a multi-country exposition of the central theme of my articles. Take my Finextra post titled Secret Of Survival Of Bank Branches for instance.

Using an example from India, I argued in this post that banks want branches because that’s where they can sell their products most effectively. Going by past experience, there was a good chance that my post would invite comments to the effect that India needs branches because it’s backward whereas advanced nations don’t need branches because, well, they’re advanced. So, I added the following US-specific reference to reinforce my point:

HBR reinforces my belief: In its article titled Know What Your Customers Want Before They Do, the authors note, “… financial services firms find that a human being is often the best channel for delivering offers.” So, it’s not only India.

This worked. No one left a jingoistic comment.

#4. Bait And Snap

In this variant to #3, your central theme is true for both Country A (typically a developing country) and Country B (typically a developed country). While you know this, you drip-feed this information to the audience. In the first pass, you assert your point only for the developing country. If and when jingoists retort with the inevitable “what you’re saying is not true in advanced countries”, you snap back with evidence of how your point is equally applicable in developed countries!

I used this strategy in my comment on the article titled In-store mobile payments fail to take off in North America:

Ketharaman Swaminathan – GTM360 Marketing Solutions – Pune | 20 October, 2016, 13:39

@FinextraMember / @DineshKatyal:

ChasePay is a mobile payment offering from a bank and it supports instore payments in USA (Source:

Going by the technology used by my bank in India to support instore mobile payments on its mobile payment app PayZapp, I’d hazard a guess that ChasePay works on QR code.

chasepay01Hardcore jingoists will sniff out the bait and avoid making jingoistic comments. Mission accomplished. If amateur jingoists fall for it, lash out with your follow up comment in which you cite evidence that your assertion is equally true for developed countries! Like I was equipped to do with the following articles that confirm that ChasePay in USA also uses QR code for instore payments (just as PayZapp does in India):

Chase Announces Chase Pay, Its Own Digital Wallet

Wakefern to Accept Chase Pay

No one took the bait. Don’t know if that’s because there are no amateur jingoists on this platform or my strategy #2 has worked!

#5. Take It Head On!

In this approach, you hit back at the jingoist with a tinge of reverse-jingoism of your own. Like I did in the case of Example B described in Do You Face Online Jingoism? I Do. I played @BenedictEvans statement against himself with the following tweet:

He probably didn’t know how to counter my “stagnant market” jibe because I haven’t heard back from him after that!


If you know of any more ways to fight online jingoism, please share them in the comments below.


*: Radhika Iyer is my niece and a final year student at MIT Institute of Design. She runs her blog called Design for X.

Overcoming The Space Time Challenge in CEM

Friday, December 2nd, 2016

In Omnichannel Couponing Drives CEM Success – Part 1, I’d highlighted the challenge of space in the couponing phase of a CEM program. To recap, space-related issues range from where to insert the code, how to make the code large enough to be visible but small enough to fit on the existing package through to ensuring that there’s enough space on the label to provide instructions on how to submit the code.

Subsequently, I’ve come across a few more CEM programs run by FMCG brands. The space challenge continues. In addition, time has emerged as another challenge.

Read on for illustrations of the “space-time challenge” and our suggestions for overcoming it (Spoiler Alert: No quantum mechanics knowledge required!).


stccem-fi-2Consumer gets INR 20 cashback credited to their account by purchasing a Snickers chocolate bar costing INR 35 and paying for it with their PayTM mobile wallet.

As in the case of the Nescafe-PayTM CEM program described in Omnichannel Couponing Drives CEM Success – Part 1, the Snickers CEM program also used website-based enrollment. Unlike the Nescafe case, though, the code on the inside surface of the Snickers wrapper was easily visible since it was printed in red color on a silver background. Kudos to PayTM for continuously finding ways to enhance the customer experience.

The URL for entering the code – should you be interested – was also clearly readable on the wrapper.

After entering the code and submitting it on PayTM’s microsite, I was a bit peeved to see the message that it would take 24 hours to credit the INR 20 to my PayTM wallet. But, my displeasure was short-lived. When I logged out and logged back in after a few minutes, the amount was already credited to my wallet. Not sure why PayTM needed to use this disclaimer!

snickers05Otherwise, couponing went through smoothly.

I bought another bar of Snickers and repeated the couponing process. It went through smoothly. The wrapper said “usage limitation applies” but evidently I didn’t hit it with my two purchases. This time, the amount was credited to wallet immediately.


tictac01I saw a poster of this famous mouth-freshener product last month.

I bought a pack on 24 October 2016 (you’ll know soon why the date is important). The CEM program used SMS-based couponing.

I couldn’t find the code anywhere on the box. It became visible only after I emptied the contents and tilted the pack to one side.

The number to which the code should be SMSd was printed in very small font size. I thought it was 95405 95406 or 95406 95406.

I SMSd the code to both these numbers. Nothing happened.

I Googled for “Tic Tac Share & Win” and clicked through to YouTube. Unlike the actual pack, the code was easily visible in the video.



This shows that #CurrencySwitch is not the only program that exhibits a disconnect between idea and implementation! But I digress.

I saw a different number on the video: 95405 95405. I SMSd the code to this number. Again, nothing happened.

I then found out that the program had expired on 30 June 2016.

I felt a bit cheated that the product carrying the program label wasn’t removed from the shelves even four months after the last date of the CEM program.

On a side note, the pack and the aforementioned promo video were both silent about what I would win from this “Share & Win” program. Combined with the lack of response to my couponing, this made me wonder if this CEM program was a scam.


Purchase of a can of this pain relief spray entered the consumer into a sweepstake for winning a free ticket for a recent Bollywood blockbuster.

In a marked departure to a typical coupon, the one on this pain relief spray was not printed on / affixed to the can. Instead, it was printed on a separate card tied to the can.

The scratch panel covering the code was of excellent quality. When I used a coin to scrape it, not a single digit of the code was defaced. I could easily read the code. This is uncommon. This program used SMS as the couponing method. It was quite easy to read the number to which the code was to be submitted.

I texted the code to the given number. Nothing happened. I didn’t bother to head over to Google this time. It seemed obvious that the program had expired, just like #2 above.

Another scam?


Although CEM has nothing to do with quantum mechanics, the above examples show that it faces the same space-time challenge!

It’s clear that quality and legibility of the coupon continue to be a major determinant for the success of a CEM program. This is an issue of space.

It’s also obvious that time is another critical success factor for CEM programs. Consumers – me included – are justified in getting exasperated with Relispray and Tic Tac leaving their couponed products on the shelves well after their respective CEM programs had expired. The negative vibe caused by this could wipe out whatever positive buzz the brands were trying to create with their CEM programs.

Getting space and time of coupons right would accelerate the mainstream adoption of CEM programs.

Some suggestions for overcoming the space challenge can be found in Omnichannel Couponing Drives CEM Success – Part 2.

To overcome the time challenge, manufacturers need to predict in advance how many units of the product would sell during the duration of the CEM program and release only that quantity of the couponed products to the trade. This will ensure that negligible quantities of the couponed product would be left behind on store shelves after the program expires. If this seems like rocket science, it was – until recently. But technologies are now available that can help companies to get a good guesstimate of the CEM-driven sales uptick by correlating their historical sales data with insights drawn from other similar CEM programs.

Using a suitable CEM platform, CMOs and brand managers can overcome the space-time challenge in their CEM programs and maximize the bang for their marketing buck.

What Happens When You Use Excel To Collect Data For Your Software

Friday, November 25th, 2016

In Why Overcoming The Tyranny Of Excel Is A Lousy Positioning Theme, we’d cautioned software companies from pitching their software as a replacement for Excel.

Since then, we’re happy to see more innovative positioning around Excel by technology providers. For example, BI vendor Domo pitches its suite of data visualization products as complementary to – not substitute for – Excel.

Kudos to Domo, even if we say so ourselves!

In this blog post, we’ll cover another disturbing trend in software: Telling the customer to use Excel before they can use the software.

This was a common practice in the mid 1990s when ERP vendors used to circulate Excel-based “Master Data Collection Forms” for collecting bulk data like customer master, item master, vendor master, and so on. We’re dismayed that, despite the availability of far more advanced technology 20 years later, vendors in many product categories still use Excel sheets for the same purpose.

There are at least two reasons why this is not a good thing:


dilbert-cognitive-dissonancePut yourselves in the customer’s shoes.

You’ve just bought a software after listening to a vendor tell you how it’s better than Excel (among other things). Then you’re told to use Excel before you can use the software. If you’re like most customers, you’d feel let down badly, or undergo what’s called “cognitive dissonance” in Consumer Behavior.

In the days of onprem software, enterprises were committed to the success of the implementation because they’d paid the license fee for the software upfront, so software companies didn’t have to bother too much about cognitive dissonance. However, in the SAAS world, a customer that suffers from cognitive dissonance is a customer that’s likely to cancel their subscription by the end of the month. So cognitive dissonance has become a critical issue now.


Excel is error-prone. In almost every onboarding we’ve seen, Excel uploads have eventually led to poor data quality, incorrect classification of hierarchical entities and additional efforts for reconciling Excel-inputted data with “true” data. In some cases, errors in Excel have caused catastrophes, as highlighted by GTNews in “The Perils of Excel”: “Elementary spreadsheet errors have in this case potentially impacted the economic well-being of perhaps billions of people, who have been exposed to austerity policies based upon false data.”

This threatens onboarding and, thus stymies revenues of a SAAS company.


It’s therefore clear why software companies should eschew the use of Excel for collecting master data.

But that’s easier said than done, given the widespread usage of the practice. Before we propose a solution for this apparent conundrum, we need to understand why Excel is so popular in the first place.

excel-data-entry-fiFrom personal experience and discussions with several companies, Excel is used widely for collecting master data for the following reasons:

  1. In Excel, you can enter data at high speed from the keyboard. In software frontend, you need to look at the screen and use the mouse. This slows you down.
  2. After entering a row in Excel, it’s easy to hit the Enter key to go to the next row immediately. On a software frontend, you need to hit the Submit button at the end of a screen and wait for the screen to be refreshed and the next blank screen to come up.
  3. Excel accepts anything. Software throws out errors when its validation logic spots a discrepancy between the data entered and the field definition. For some fields, software allows you to only select entries from a drop-down box. If you can’t find your data on the list, you’re stuck.

In short, Excel is faster for bulk data entry and does not ground you with fatal errors.

Against this backdrop, any alternative for Excel should address these fundamental issues.

mde01The key to doing so is the realization that screens in software are designed for entering small amounts of transaction data over a long period of time rather than for entering huge amounts of master data over a short duration. Using the same screen for onboarding causes all the problems that have established Excel’s predominant position in the process of collecting master data.

To address this, we recommend development of a separate set of screens that mimics the way Excel works in gathering bulk data. Each screen should allow entry of data without validation, which should be run on a batch of data instead of when each screen is saved, as most software products do today. In other words, validation should happen “offline” instead of “online” as in the current design. The same error queues and messages used for validating Excel-inputted data should be reused for validating data entered via frontend screens. This will ensure that master data can be inputted using the software as easily and with equal – if not better – quality as via Excel.

We admit that development of this separate “Onboarding UI” will increase development efforts. But it will also eliminate cognitive dissonance and minimize onboarding failures. From the experience of a customer that has followed this approach in their software, the incremental efforts will pay back many times over by reducing churn and enhancing CX over the lifetime of the SAAS software.

PSA: Don’t Get Defensive About Not Going Cashless

Friday, November 18th, 2016

psa-cashless-fiThe Indian government recently demonetized the INR 500 and 1000 notes and announced plans to introduce new design notes in INR 500, 1000 and 2000 denomination. In the wake of this move – trending as #CurrencySwitch among a few other hashtags – many people have been asking why India hasn’t taken this opportunity to go totally cashless.

Many Indians have been replying with statements like “Indians are illiterate” and “Indians are not tech savvy”.

This is a Public Service Announcement to Indians to stop going on the defensive on this subject.

Not just because literacy levels in India have improved considerably in recent times or because Indians are far more willing to try out new technologies.

But because going cashless is less about literacy or tech-savviness and more about hurdles related to business model and consumer behavior. Obstacles include high MDR cost, friction of making cashless payments, aversion to being tracked, fear of overspending, reluctance of banks to issue merchant accounts, and so on.

I’ve blogged about these challenges here and on Finextra  over the past few years. Here’s a quick recap, updated with recent developments following the announcement of #ExchangeSwitch on 8 November 2016.

#1. High MDR Cost

“Merchant Discount Rate” or MDR refers to the fees paid by merchants for being able to accept cashless payments. For credit cards, which are the most popular form of cashless payments in India, MDR is around 2%. For many categories of merchants, this is a prohibitively high cost e.g. khirana stores (India’s equivalent of mom-and-pop grocery stores) who work at around 5% gross margin. There are other forms of cashless payments such as mobile wallets, prepaid cards, and so on. While they may charge lower fees, they come with their own challenges related to friction, speed, concerns around shareholding pattern, etc.

#2. Friction

Online card payments are subject to two-factor authentication. While 2FA has the noble intent of increasing security, it makes the payment journey tortuous and causes very high levels of failed payments.

Offline – or instore – payments are subject to PIN. While friction in offline payments has reduced since the Chip+PIN regime was introduced last year, hooded POS terminals are few and far between. As a result, there’s no privacy while entering PIN.

Online or offline, even tech-savvy people have gone from card to COD payments.

#3. Aversion To Being Tracked

Every cashless payment involves a third-party apart from the consumer and merchant. This means every purchase made with a cashless method of payment is being tracked. Even if people have nothing to hide, they tend to get put off by spam when their purchase information – what, where, how much for did they buy – falls in the wrong hands.

#4. Fear of Overspending

Cash is tangible whereas cashless MOPs are intangible. It is widely perceived that credit / debits can lead to overspending. As Santosh Desai points out in Times of India,

It is easier… to spend money using a credit card, for the outflow seems more theoretical than it does when paying in cash. The difference between Rs 2,000 and Rs 20,000 is a slip of the pen in one case and a complex exercise involving withdrawing money from the bank, carrying it in one’s wallet and counting it (twice) before handing it over.

Overspending is not a concern in my 25+ years of using credit cards because I maintain a meticulous record of all charges I put on my credit card. However, that’s only me and I can appreciate why most people do believe card payments can lead to overspending.

#5. Reluctance of Banks to Issue Merchant Accounts

To accept card payments, merchants need a POS terminal, telephone connection and a basic knowledge of operating the PIN keypad. Most merchants I come across can handle all this. But they’re not enough. One major prerequisite of accepting card payments is a merchant account. For the uninitiated, this is a contract between a bank (“acquiring bank”) and a merchant. Because of their conservative risk management norms, banks have traditionally shied away from issuing merchant accounts to khirana stores, vegetable vendors, cabbies and other so-called “micro merchants”. As a result, many merchants from whom consumers make everyday purchases are unable to accept card payments even if they wish to despite #1 above. Going by post-#CurrencySwitch announcements from State Bank of India, India’s largest bank, this may change going forward but it’s still early days.

#6. Delays in Receipts

Because of #5 above, taxi drivers are unable to accept card payments on their own. They do accept card-linked mobile wallet payments via their aggregator company e.g. Uber, Ola. If you thought this would easily push one big category of everyday expense to cashless payment modes, you’d be mistaken. As a cabbie once told me:

When customers pay by cash, I get the money immediately. However, when they pay by card, the money goes to the aggregator. It takes me anywhere from a week to a fortnight and a couple of fareless trips to the aggregator’s office to collect it. So, accepting electronic payments is not good for my business.

As a result, most cab drivers are reluctant to accept cashless payments.

This problem has only escalated since #CurrencySwitch:

#7. Card on Delivery Limitations

Because of friction in online payments, I’d gone back to Cash on Delivery for online shopping. Then Amazon India and a couple of other ecommerce companies started offering Card on Delivery. With this payment mode, I can avoid paying online but still pay with my card when the consignment is delivered. I’d rate this as the most convenient method of payment for online shopping. It also saves the ecommerce company a load of trouble of handling cash. Given these two benefits, I’ve been expecting this win-win MOP to go mainstream. But that hasn’t happened.

It was only from this post-#CurrencySwitch article on Economic Times that I learned why:

Therefore, ecommerce companies that outsource deliveries to third-party logistics firms can’t offer Card on Delivery.

currency-in-circulationTo paraphrase Hamlet, there are more things that come in the way of going cashless than are taught in an engineering course.

India is not alone.

No country has gone cashless. 85% of world’s transactions happen in cash according to Business Insider. Currency in circulation in USA has actually risen according to The Wall Street Journal.

So let’s not put ourselves down about not going cashless. For a cashless – or even less-cash – regime to happen, many more things need to fall in place than just literacy and tech-savviness. My post How To Really Kill Cash provides a few pointers.

Jai Hind!

Do You Face Online Jingoism? I Do

Friday, November 11th, 2016

face-jingoism-fiThe Internet is full of jibes of people’s nationalities. They appear on articles, blogs, reviews and comments. Often sarcastic and sometimes venomous, they run down the author’s or commenter’s nationality without any provocation.

Let me quote a few personal examples of where I’ve come across such remarks in the recent past:


The Finextra article titled Brits expect cashless society within 20 years is about Britain, so Brit-specific comments are okay. Country-agnostic comments are also okay e.g.

John Candido – Black Cabs – Melbourne

I agree that the end of cash is not expected tomorrow or even next year. But the prospect for a cashless society’s eventuality is clearly inevitable to me, even if it isn’t something that a lot of people cannot foresee for the time being. There are just so many signs of cash’s inevitable decline that I don’t give cash a snowball’s chance in hell to survive the next let us say 50 years or so.

Now let’s take the following response to the above comment:

A Finextra member

Please tell me the signs of cash’s inevitable decline in the United States, Germany and the Arab world, where cash is still king and does not show any signs of declining in the foreseeable future. It may be the case in Australia, where less than half of one percent of the global population resides, but in many large, and often sophisticated countries, cash is still the preferred apyment (sic) method.

The reference to Australia in this comment is entirely unwarranted. It’s quite likely that the anonymous commenter picked it up from the reference to Melbourne in the earlier commenter’s profile.

Like his or her name, the anonymous commenter’s nationality is also undisclosed. This makes it a non-level playing field.


Let’s take this thread on Twitter, which began with the following tweet from @BenedictEvans of the tech VC firm Andreessen Horowitz:

I retweeted it with my comment:

Now look at his reply:

Duh, how does “emerging markets” come into the picture?

I suspected where he was going with this but I replied, tongue-in-cheek:

Now he came to the point:

Maybe it’s only me but the implication that people in emerging markets only have low-end devices is obviously racist.


linkedin-jingoismIn this post (, LinkedIn member Susana Joseph writes about how fellow member Ian Viner sent her a promotional message to get her CV written and, when she declined his offer, made the following remark:

You wouldn’t have a clue how to write a CV – nor would anyone else in India either.

I don’t think the xenophobia in this message needs much explanation.

When I tried to locate this post now, I got the following error message: “Sorry, this update isn’t available. It may have been deleted.”

Maybe Susana Joseph has deleted her update. Maybe LinkedIn really retains members’ posts only for one month as I remember reading somewhere. Or whatever. But you probably won’t be able to find this thread.


The above remarks display racism or xenophobia or nationalism or whatever this behavior is supposed to be called. Despite looking up a thesaurus and consulting an MFA graduate in creative writing, I wasn’t able to find a single word for it. Therefore, I’ve used the term “jingoism” as a catchall phrase to refer to this behavior in this blog post.

If you have a better word than jingoism to collectively describe racism, xenophobia and nationalism and / or come across the behavior on blogs and social networks, please share in the comments below.

If jingoism gets your goat and / or affects your business, you might want to fight it. In a follow-on post, I’ll describe five ways to do that. Watch this space.