“The competition is not with credit cards but with cash” – CIO, Obopay India

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Obopay India recently announced its mobile payment service for the Indian market and has already tied up with six banks for the service. One of the core difference in their service is that they have taken the debit card route (while players like mChek/JiGrahak have taken the credit card route).

What’s the rationale behind this? What’s Obopay India’s game plan?

Read on our interview with Aditya Menon, Chief Information & Technology Officer Obopay India.

Obopay India opted for debit card route, instead of the regular credit card route adopted by other players. What’s the rationale behind this?
Safety and control of one’s money are the two principal reasons for the adoption of the debit card model. Furthermore, if we look at the US market for the first time debit usage has exceeded credit usage and in India as well, Debit cards exceed credit cards in the ratio of 3:1. We are a mass market product and therefore the ability to transact through a bank account and through any channel is the basis of our offering.

What are the challenges you see in mobile payment/m-commerce industry? More than technical, there are perception challenges too (users aren’t too comfortable with m-payment). How do you plan to address this.
Two years ago, mobile phone usage was marginal. The last two years has seen a dynamic transformation of the market place where mobiles have penetrated into demographic zones formerly thought to be unobtainable. Given the fact that Indias burgeoning population is largely under 27 and the propensity to change amongst youth is far higher, we therefore believe that the transition from cash to mobile payments will happen seamlessly. To add to the previous point, we view the competition not being with credit cards but with cash, as 88% or retail transactions are still done in cash.

What is the market segment Obopay is targeting? Consumer or Small Businesses?
We are targeting all market segments.

Unlike Obopay US, is the India business plan centred towards being the platform to enable transactions?
In India, we provide a front and back end service for payment fulfilment and settlement. In some cases consumers will adopt out front end (client) However many of our partner banks have their own clients connected to the Obopay payment system.

It would be great if you could share some details on Obopay India’s funding status.
Obopay India is a 100% subsidiary of Obopay US. We have raised 48 Million USD in funding through funding with companies like Citibank and Societe Generale.