Nov 16 2014, Written by - Vijay Raghunathan
From father to son – A financial journey
Sometime in the early 90s
My father walks-in home one evening beaming. Not every day would he return from work in such a tremendous mood, but that particular day was clearly different. He was upbeat about something. As inquisitive children, we wanted to know the reason behind and partake in the happiness. After a lot of prodding, he stylishly fished out a blue card from his wallet. It was gleaming and never have I set my eyes on something like that.
His name was embossed in silver along with a lot of numbers. The ensuing conversation went on like this:
Me : “Dad what is this beautiful thing?”
Dad: “It is a credit card”
Me: “A what card? What is it supposed to do?”
Dad: “This is like money. You can use it in shops. Instead of paying by money, you pay through this card”
Me: “Hmmm, I don’t get it. How can money be inside this card? How will the shop-keeper get the money?”
Dad: “I will show you the next time we go to a shop”
I couldn’t wait until the weekend, when we were to try out the “credit card”. Finally the D-day arrived and the family was well decked up to go out shopping and make our 1st purchase through a credit card. We were pouring over a booklet that came along with the card to find out merchants who accept credit cards in the town. Not many in the town and finally we settled on a clothes merchant.
I was extremely impatient during the shopping exercise and wanted to fast-forward to the payment time. Finally, when it came, the merchant gave a big smile when my dad flashed his credit card (in those days credit cards were reserved for the privileged few and being a government employee my dad was considered as a low-risk proposition for the bank). To add to the drama, the merchant pulled out a black colour machine – one with a sturdy base and a sliding top portion. Credit card was carefully placed in the slot holder, a slip of paper on top of it and then he slid the top portion back & forth. He then removed the paper and all details of the credit card were imprinted with a carbon-copy. Once my dad signed, merchant returned the credit card along with our merchandise with a “Thank you for shopping”. Wow, that was sweet!!! We had purchased clothes without paying a single rupee (of course, it took me some years to finally understand how the industry worked).
Thus, began the journey of mine with credit cards. From such humble beginnings, credit card and its variants have become a part of the lifestyle – credit card had become the preferred option for any transaction.
Now in 2010s
There has been a lot of talk around Mobile Money etc. Since I have credit cards, never really gave a thought to it, apart from academic knowledge. Until, I became a part of the journey. Being a part of the organisation (Panamax) that is working on new technologies and in turn empowering many other organisations in the field of Mobile commerce and financials, I’m now aware of the potential of Mobile Money and allied options.
For the last few months I’ve been around in Panamax, I’ve had the privilege of interacting with many of our customers/partners and peers in the industry. Combining the ubiquitous mobile technology with finance is changing the world order like never before. This, in my view, is going to be the strong differentiator. Here are my key reasons for believing (and also experiencing) that mobile commerce will be a dominant force in the near future:
Whilst, credit cards were reserved for the privileged few (even today not everyone has access to it), mobile money is about financial inclusion of traditionally overlooked societies and providing convenience to the well-to-do strata. Smart phones may be the order of the day, yet, a lot of R&D and innovation goes into feature-phones (e.g., J2ME apps, USSD/SMS based services) to take mobile money to the downtrodden for services like money transfer, merchandise, direct subsidies from governments etc.
Agency banking and bank correspondents with their mobile phones and tablets are doing amazing things which the brick & mortar banks failed to do – taking banks to the poor and not the other way around. This opens up tremendous opportunities for the poor, who now have access to the mainstream financial system through instruments like mBanking, micro finance and micro insurance.
Breaking down barriers and cultural sensitivities. For e.g., NFC tags are used in places where women didn’t feel comfortable to reveal their identities. Such overlooked sections of the society also have access to financial system, at their own comfort and convenience
And yes, I use my mobile for convenience today – utilities payment & mBanking. So, clearly it is exciting times ahead and I’m happy to be in the midst of it all. What will the world look like in 2030s is anybody’s guess and I will leave that story for my next generation.