Thakur
Banned
- Joined
- 30 Aug 2013
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- 14,856
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“A business that makes nothing but money is
condemned to remain poor,” said Henry Ford.
One does not necessarily have to agree with
Ford to understand that all business, at the
end of the day, has to have a philosophical
core that goes beyond making money and the
everyday exigencies of earning a livelihood.
Financial inclusion is thus the buzz word and
several models have come up around it.
The tricity, or a percentage of the upper
income group, is, I presume, familiar with
newer models of transferring and using money
through mobiles on platforms provided by
telecom operators like Airtel and Vodafone.
Besides cutting down on the use of cash, an
avowed goal of the Reserve Bank of India and
successive governments for some time now, it
also promotes financial inclusion. The earnings
for operators for providing the service might
not be that lucrative at the moment, but the
initiative is meant for the long haul, as it is
expected to lead to a substantial cost reduction
in the ease of doing business.
Consider this: with 97% of transactions in the
country based on cash, even a 1% reduction in
these would lead to a saving of Rs. 100 crore a
year for the government, on the cost of
printing the paper money and other associated
costs. Another problem that a cashless
economy can substantially ease is the shortage
of change, a huge relief for the hassled
vegetable vendor and the bus conductor.
Mobile companies are not the only ones doing
their bit for financial inclusion, there are other
business plans in vogue that aim to make
money out of money in a far more literal
manner than most businesses tend to. Pre-paid
cash cards are another option that is trending
in the market and has the potential to grow.
There are 27 such companies allowed to
function in the Indian market and their
business proposition is simple. They primarily
target people without a bank account and offer
them a way to store their cash and remit
money domestically.
“Our revenue comes from the Rs. 100 one-
time fee charged for the activation of the
card, the first time, on a payment of Rs. 500.
After the card is activated, the instrument is
on and can be used to store up to Rs. 50,000,”
said Mudit Bhatnagar, vice-president and head
marketing, ItzCash, on a recent visit to
Chandigarh. Bhatnagar says that their model is
a high-volume, low-margin design and claims
that Punjab contributes 7% to its pan-Indian
revenues and is betting big on the relatively
suave, but unbanked segments of workingclass
people like our tea vendors, grocery stall
owners and the like, to drive growth in his
business. Interestingly, the Essel Group
company, started out as a solutions provider
to the common but vexed problem of getting
people to pay their bills for the DTH service in
a convenient manner.
How does Bhatnagar plan to reach his
target customers?
“We open franchisees, which are not
traditional showrooms, but we look for people
who are computer literate with an internet
connection and can market the concept in
their respective communities with passion.
Marketing the concept remains a challenge,”
said Mudit. Going cashless whole hog - Hindustan Times
condemned to remain poor,” said Henry Ford.
One does not necessarily have to agree with
Ford to understand that all business, at the
end of the day, has to have a philosophical
core that goes beyond making money and the
everyday exigencies of earning a livelihood.
Financial inclusion is thus the buzz word and
several models have come up around it.
The tricity, or a percentage of the upper
income group, is, I presume, familiar with
newer models of transferring and using money
through mobiles on platforms provided by
telecom operators like Airtel and Vodafone.
Besides cutting down on the use of cash, an
avowed goal of the Reserve Bank of India and
successive governments for some time now, it
also promotes financial inclusion. The earnings
for operators for providing the service might
not be that lucrative at the moment, but the
initiative is meant for the long haul, as it is
expected to lead to a substantial cost reduction
in the ease of doing business.
Consider this: with 97% of transactions in the
country based on cash, even a 1% reduction in
these would lead to a saving of Rs. 100 crore a
year for the government, on the cost of
printing the paper money and other associated
costs. Another problem that a cashless
economy can substantially ease is the shortage
of change, a huge relief for the hassled
vegetable vendor and the bus conductor.
Mobile companies are not the only ones doing
their bit for financial inclusion, there are other
business plans in vogue that aim to make
money out of money in a far more literal
manner than most businesses tend to. Pre-paid
cash cards are another option that is trending
in the market and has the potential to grow.
There are 27 such companies allowed to
function in the Indian market and their
business proposition is simple. They primarily
target people without a bank account and offer
them a way to store their cash and remit
money domestically.
“Our revenue comes from the Rs. 100 one-
time fee charged for the activation of the
card, the first time, on a payment of Rs. 500.
After the card is activated, the instrument is
on and can be used to store up to Rs. 50,000,”
said Mudit Bhatnagar, vice-president and head
marketing, ItzCash, on a recent visit to
Chandigarh. Bhatnagar says that their model is
a high-volume, low-margin design and claims
that Punjab contributes 7% to its pan-Indian
revenues and is betting big on the relatively
suave, but unbanked segments of workingclass
people like our tea vendors, grocery stall
owners and the like, to drive growth in his
business. Interestingly, the Essel Group
company, started out as a solutions provider
to the common but vexed problem of getting
people to pay their bills for the DTH service in
a convenient manner.
How does Bhatnagar plan to reach his
target customers?
“We open franchisees, which are not
traditional showrooms, but we look for people
who are computer literate with an internet
connection and can market the concept in
their respective communities with passion.
Marketing the concept remains a challenge,”
said Mudit. Going cashless whole hog - Hindustan Times
