We expect 15-20 banks with us by fiscal year-end
KATHMANDU, DEC 20 -
Hello Paisa is basically very safe, secure and convenient mechanism to do financial transaction over your mobile phone. We are the most interoperable and widely operable mobile financial service provider that is offered through partner banks. Customer’s money belongs to bank and is with bank, but the customers—either of the same bank or partner banks—can transact with each other through “Hello Paisa”. Most of similar other services are available only on bank-to-bank basis. A customer of a particular bank can only transact with the other customer of the same bank. In the Hello Paisa platform, not only the branches of Hello Paisa partner banks, but also the agents made by the partner banks are totally interoperable. Making all the branches interoperable is a very important element because branches support liquidity of a system, so banks appoint agents, and for this they need a branch close by where cash supply can be maintained.
Nepal’s remittance stands at more than $4 billion dollar and the recent Nepal Living Standard Survey concluded that only 2.8 percent of the amount gets converted into capital. This is not a good thing for the economy. So a platform like “Hello Paisa” enables people to turn into entrepreneurs in villages with easy payment solutions. Mobile is everywhere. It is easy to assume that every household in Nepal now has a phone. So banks should also reach there and we have developed a platform for partner banks and a win-win scenario for everybody.
Our company was established some four and half years ago. The service was launched two years ago. Right now we have eight live banks and financial institutions. You don’t need to be class ‘A’ bank to join this platform; we are capable to accommodate all.
What is the user base of Hello Paisa?
We have an active user base of about 50,000. Banks have to learn about how to set up agents and get an orientation about what exactly you want them to do. It is very easy to approach a bank’s person. He has got the credit card, debit card, internet banking, cheque book and mobile banking. Those are value-added services and value-added things only benefit banked people. Challenge in Nepal is 70 percent of our population is unbanked. We need a different approach to access these people.
Another interesting element we have in a Hello Paisa account is the account can be savings account itself which is beneficial for the unbanked people. The money remains safe with a designated bank. Meanwhile, customers can enjoy other facilities without having travelled to the bank. When I was mentioning about remittance, people are not being able to save and why they are not being able to save is because of the lack of opportunities to do so. But with banks promoting branchless banking services and the model getting clearer, banks are being able to reach the customers, which they could not do earlier.
Awareness is an important factor for platforms like “Hello Paisa”. How has it been perceived across Nepal?
Financial literacy plays a very crucial role. A couple of things that there is a perception about people not being able to use mobile phone. When you go out on the field, you will see what is happening and because of our migrant workforce, a lot of knowledge has been gained which is transmitted back home with people being able to text and perceive it. If there is an essential need, even people who don’t do it will learn how to do it. You need to make them a bit aware about the other elements.
In our platform, we use a combination of multifactor authentication system. We use SMS for transaction request, and then we generate IVR through which a computer calls the customer and reads the transaction out and then the customer is asked to authenticate the transaction with a PIN on the live call. If they authorise it, the transaction will happen and if they press start button it will cancel automatically. Even the most illiterate people know how to count number, so we have replicated that behaviour.
How do you see this platform being perceived in different parts of the country? And what is the transaction volume at current?
For initial customer acceptance, we are seeing transaction-based activities happening. It is either for making payments at shops for goods or services or payment to other people. So it will be a combination of payments and remitting money. In rural areas, getting even a Dish Home voucher is a big deal. And even if it’s there it’s pricey.
In terms of transaction, each bank has to reach its comfort level. We don’t determine transaction limit, it is determined by the partner bank. So we find our partner banks starting with a maximum single time transaction of Rs 25,000, and in the beginning, they say Rs 50,000 a day. Whereas now, there are banks that are confident and even allow Rs 500,000 per transaction to certain customers. So it is being used, especially by the agents.
How many banks have so far partnered with Hello Paisa?
We have eight partner banks that are live. Of them, six are commercially out, while the other two are also going live soon. By the fiscal year-end, we are looking forward to have 15-20 banks with us. Since using this platform is not an easy task and requires serious exercise, we are happy with whatever partners with which we are working now. Also, profit is there only after achieving a certain number. So we are targeting those who are committed to provide efficient mobile financial services.
How do you access Nepal’s banking sector in terms of information technology?
Yes, we are cash-based economy. But electronic transaction in the global market too is based heavily on cash. In the Nepalese context, banking systems, because of a competitive environment, are using world-class technologies.
Also, the central bank is picking up its regulatory standards. Yes, we are hearing about fraud cases, but if you look at most of them it is mostly internal fraud which can happen to anybody. I think most of the banks here are maintaining the standards, and security systems are in place. All in all, I would say the Nepali banking system, in terms of IT usage, is decent. It is in fact one of the best in the subcontinent.
Where do you see the mobile financial service sector going in the next five years?
I think mobile banking and mobile-based financial products will be available to every Nepali. I have been to certain places in Nepal where there is no mobile network, but people have mobile phones in hand. They use it to listen to radio, and since they have it, I think that they know how to use it. In the next five years, access will be there, inclusion depends on how the service is offered and what all can be provided in the village level.
Sixty percent of remittance coming to the rural market doesn’t come to the formal system. So the role we are playing will help that money come into the banking channel, and of course, I see an immense potential in the next five years.
Source: The Kathmandu Post
