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From Digital Recharges To Digital Money: Eko’s Journey To Bring The Bank To The Mobiles Of Millions Of Unbanked Indians

From Digital Recharges To Digital Money: Eko’s Journey To Bring The Bank To The Mobiles Of Millions Of Unbanked Indians

Imagine is a powerful word. ‘Imagine’ enables to foresee the future earlier than all of us else has even notion approximately it. Imagine allows an entrepreneur question the repute quo: What if rather than this, we follow that direction? What if instead of doing it this manner, we approached it every other way?

What if as opposed to calling a phone recharge a recharge, it's far referred to as a deposit in the Airtel account? And what if one may want to use the technology at the back of recharges and set up it for a bank so that a consumer should truly walk into a shop and make a deposit in his financial savings bank account similar to recharging?

This idea turned into precisely what Abhishek Sinha and Abhinav Sinha imagined manner again in 2006 at the same time as jogging their first organisation Six DEE Telecom Solutions, a telecom cost-added offerings. Abhishek had commenced the business enterprise in 2002 at the side of a colleague from Satyam Infotech while Abhinav joined in 2005. Six DEE created fee introduced offerings merchandise for the cell and offered it to mobile operators. As India changed into very competitive at the time, most of the goods had been being bought in Southeast Asia, Sri Lanka, Middle East, and Bangladesh.

One of the goods it bought was the prepaid recharge scratch card. The platform at Six DEE automatic the scratch card, doing away with manufacturing cost and distribution cost. Since the bodily card got eliminated, the quantity one should recharge was absolutely democratised.

It is then that an idea struck the duo: banks ought to use the identical era as utilized by the cell operator for presenting banking to retail outlets. At that point, a comparable programme changed into being executed in Kenya by using Vodafone referred to as the M-Pesa where Vodafone-enabled subscribers may want to send cash to different smartphone customers with the aid of SMS. So, essentially, one could leverage the booming mobile smartphone era and permit bills and monetary services with the aid of partnering with retailers and mobile telephones.

Hence in 2007, they exited Six DEE and spent the subsequent five months absolutely white boarding on what they need to do next.

In September 2007, Eko changed into born.

The Gurugram-based totally monetary offerings business enterprise commenced offering mobile money services primarily based on USSD, SMS and IVR thru its two-issue authentication (2FA) generation. It allowed customers to make comfortable transactions on their mobile phones, with out putting in software on the telephone or the SIM card. And it supplied peer-to-peer cash transfers, cash deposits and withdrawal, salary and salary payments, micro-insurance, and micro-credit centers to people through small neighbourhood stores, which became their banking sellers.

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Eko collaborated with banks and outlets and began to open bank bills and enabled deposit/withdrawals for clients right on the retail store. When a patron walked in an Eko retail shop, he could genuinely be requested to grant an deal with evidence, ID proof and an account would be opened for him inside 10 minutes. He could conduct withdrawal and deposit transactions out of his cell cellphone.

The mobile, in the palms of the consumer and the retailer, acted as a point-of-sale tool and the complete revel in turned into as simple as getting a speak time recharge.

The cell, in the hands of the patron and the retailer, acted as a factor-of-sale tool and the whole experience was as easy as getting a speak time recharge. Since only feature phones existed at the time, Eko leveraged the platform to enable monetary transactions.

From A Business Correspondent To An Independent Startup

Being the first startup to begin constructing mobile monetary offerings for the cease consumer in India, it faced a completely unique problem. None of the policies that exist these days have been gift lower back then – along with the mobile fee tenet, cellular banking tenet, and UPI among others. So inside the beginning, the group completely underestimated the overbearing need to conform with regulations. Says Abhinav,

“As we did no longer come from a banking background, we did not give a variety of heed to policies. So the handiest manner for us to participate become to turn out to be a enterprise correspondent to the financial institution. In layman terms it’s not anything however an outsourced financial institution branch. So turning into a enterprise correspondent allowed us to source and provider customers out of doors the basis of a financial institution branch.”

From 2008 to 2011, Eko partnered with SBI, Yes Bank, and ICICI together with other banks to feature as their commercial enterprise correspondent. But it needed to face a unique set of challenges at the moment in  its journey. While there have been rules in vicinity to do commercial enterprise with business correspondents, banks had no concept the way to do business in retail shops.

Secondly, as Eko’s target market became the lower to medium earnings clients who have been earning among INR 10K-30K in cash month-to-month; the banks, who were used to big ticket length clients, had no concept a way to go approximately banking in a retail keep with this target market.

Thus stemmed the hassle of making a possible financial model where all of the stakeholders along with the banks, Eko, and the retailers, were capable of make enough margins with recognize to the capital and time they have been to for my part installed. Hence despite the fact that Eko became developing constantly, it become losing money on every consumer it transacted with.

Explains Abhinav, “Initially, it changed into economically strenuous, and we have been no longer growing any price, in phrases of startup angle. Hence, we had been no longer capable of attract loads of capital. Because, at the give up of the day, we had been dealers to the bank and unless they realised that it became critical to create an economic version for all of the stakeholders, it turned into very difficult for us to influence the enterprise version. Hence in our earlier days, we depended on ourselves, own family and friends, and the supply from the World Bank because the financial model we were looking to build become no longer strong.”

Also, because it become no longer an impartial provider issuer, supplying services to banks which were in turn giving their service to give up customers, all indirect or direct costs have been borne by Eko. On the flip aspect, the revenue it earned was shared with the banks.

Gaining Recognition With Remittances

A trigger changed into had to exchange the tide.That got here in 2011-2012, when in place of focussing on account commencing and deposits, Eko pivoted to carrying out transactions around remittances.  This turned into driven through the realisation that the economically energetic urban purchaser who wanted to send money again domestic was prepared to pay.

It became  at that point that Eko’s client base started growing at a speedy price, with lots of them strolling into shops.

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Eko’s proposition to its give up customer was to begin remitting cash via Eko as opposed to going to a submit workplace and sending cash orders. Or counting on unstable and time-in depth casual networks like buddies, families, hawala couriers or bus drivers and so forth. It’s right here that the banks also realised that remittances were a high-quality sport as far as monetary fee became worried.

And that’s whilst a enterprise version was created. This caused Eko also attracting its first set of buyers in 2011.

But Eko’s struggles to scale still persisted attributable to its dependence on the banks. Says Abhinav, “We have been dependent on banks; so if we desired to go to any town, we needed to ask permission from the bankers. And in the event that they did no longer allow, we couldn't scale to that town.

“ The different problem become we couldn't rate in a different way for exclusive geographies. The quantity which a guy desires to pay for the provider in Delhi varies considerably from what he pays in another state. And banks do not fee differently for same product in unique geographies.  So we realised that scalability of the product with the financial institution became very hard.”

Pivot Number Two: Eko Wallet

Luckily for Eko, the monetary offerings situation turned into gradually changing and by way of then wallet licenses were out. Hence, it realised it was better for it to grow to be a wallet rather than staying as a business correspondent with the bank. Becoming a wallet supposed becoming an impartial provider provider, which enabled it to rate in some thing manner it wanted as it would be a directly regulated entity via RBI.

Hence, Eko implemented for its license in 2013 give up and acquired it in March 2015. Finally, in December 2015, it released its semi-closed prepaid pockets provider in partnership with the National Payments Corporation of India (NPCI) and RBL Bank Limited (previously The Ratnakar Bank Limited). Eko’s contemporary license is valid up until March 2020.

Through the Eko Wallet, users can ship deposits or remittances to any financial institution account in actual-time using Immediate Payment Service (IMPS) prolonged by the NPCI. Through the PPI license and partnership with NPCI, Eko’s own clients can also ship real-time remittances to any financial institution account. Besides, the platform additionally offers software invoice bills, retail service provider payments, one-click on mobile payments and different rising cell cash competencies thru its apps and point-of-sale presence.

Eko will fast be shifting to combine with other interfaces prolonged by means of the NPCI which includes AEPS, APBS, BBPS, RuPay, UPI, and many others. To leverage the bills infrastructure to its fullest. It is likewise looking to provide a mess of recent products and services in the payments area using its pockets license, product assets, and NPCI partnership.

Adding 650k+ Wallets Monthly, Clocking 15 Mn+ Users

For Eko, the actual scale up passed off once its wallet license came in. It has been extra than a yr for the reason that waller has been absolutely operational and traffic extent has more than doubled. In April 2016, Eko touched close to 14.Nine to 15 Mn registered clients. Over the last eight years, Eko has transacted over $2.6 Bn(INR 18K Cr) over 10,000 merchant factors without a unmarried instance of fraud. About 600K-650K wallets are being introduced each month. Also, it has entered into partnerships with approximately 35 companions who help it in acquisitions of shops.

Says Abhinav, “ With the pockets, got here the luxurious of designing the products that we desired to, price it within the way that is proper for the customer, customize for geographies, and scale it in any geography we desire to. Today, except for a few states we're found in almost each kingdom in this u . S . A . And have near 10,000 Eko shops proper now.”

Mostly those stores are neighborhood neighbourhood stores in regions with high migrant-worker populations where the store proprietors are regularly relied on contributors of the community and are able to provide an explanation for how Eko works to their clients. Consequently, the company has provided a platform to extra than four,000 retail merchants to allow these transactions and offer another source of earning.

Eko is now close to hitting $seventy four Mn(INR 500 Cr) well worth of transactions in a month and in six to eight months, is targetting $a hundred and fifty Mn(INR 1,000 Cr) well worth of pockets transactions. Currently, remittances are the biggest sales generator, with the patron getting charged 1.Five%-2% of the transaction cost.

In case of recharge or invoice fee transactions, if the operator will pay Eko a commission, then not anything is charged from the customers. In a few instances, wherein the operator doesn’t pay something, a minimal client fee of INR5- INR10 is charged from the consumer.

Now that Eko already has a vast portion of the consumer’s wallet share (cash being remitted via Eko), it is making an attempt to understand the alternative transactions inside the light of its customers and digitise them as well.

We are seeking to create an ecosystem of traders around the store desiring to make him begin investment his Eko wallet for extra than just remittances and utilities.

Explains Abhinav, “In the Eko shop, we are already changing his (the consumer’s) cash to virtual money, so our next step is how do we make him begin doing transactions which include grocery, gasoline buy, spending on consuming out, and miscellaneous every day and month-to-month desires through the wallet. So we're trying to create an surroundings of traders round the shop aspiring to make him begin investment his Eko wallet for greater than just remittances and utilities.”

In its journey until date, Eko’s efforts in the direction of financial inclusion for all has not long gone omitted. Bill Gates himself visited Eko’s Uttam Nagar, New Delhi-situated mobile banking venture, in November 2008. Thus, in 2009, it obtained a supply of $1.Seventy eight Mn from CGAP Technology Program that is housed within the World Bank and co-funded through the Bill & Melinda Gates Foundation.

In 2011, came its first spherical of institutional investment in which it raised $five.5 Mn led by means of Chicago-primarily based Creation Investments Social Ventures Fund I. Other investors like Promus Equity Partners and a consortium of high internet-really worth individuals (HNIs) additionally participated within the round.

The Digital Payments Party In India

With considered one of the biggest unbanked populace within the global, India is an exciting market for non-banking economic services. And with latest efforts being made to allow the proper sort of environment, policy, and infrastructure, plenty is going on inside the sector.

One of the largest gamers Paytm, which has additionally received a fee bank license ultimate 12 months, is anticipated to raise every other $60 Mn from Taiwanese semiconductor maker MediaTek. It has already crossed 80 million digital wallets users in India doing over 60 Mn transactions a month and has clocked a gross products fee run fee of $1.Five Bn within the closing 15 months.

Snapdeal-owned Freecharge, Mobikwik, Citrus Pay, and Oxigen also have their personal independent wallets. In a bid to mark its presence within the virtual pockets offerings, even Amazon India has carried out for a semi-closed wallet license with the Reserve Bank of India.

But Abhinav is not bothered through inherent opposition. He says,

“I don’t think in a rustic like India one or two gamers can satisfy the needs of this united states. If you examine the telecom industry additionally, there are numerous gamers inside the space, although, of path, only three to four gamers get the majority of market percentage and customers. Similarly even the bills area in India could have 3 to five certainly big players who will fulfill the needs of the fee enterprise and now not simply one massive player.”

More so, how Eko appears at its target section is slightly unique compared to different pockets players.

Eko in large part caters to the city, economically energetic consumer section earning between INR 10K-INR 50K in cash on a month-to-month basis. Adds Abhinav, “This section essentially earns in cash and spends in cash. These are city customers inclusive of cab drivers, safety guards, running in beauty parlours, and eating places, and they are savvy with tech, conscious of factors which might be taking place. Now in case you in case you observe the famous e-wallets, a cash incomes-purchaser cannot use them as they can be funded most effective with the aid of credit cards and debit playing cards.

“So the customer section that we're searching at is very huge in India, almost eighty%.  Hence we're growing a massive network where clients can walk in our shops, get themselves an Eko wallet, and fund it with coins. Plus our transaction time is a trifling 30 seconds,” he adds.


The complete digitalisation force of the government will in addition help Eko foundation the reality that its target audience will maintain to earn in coins and as a result, will need alternatives to convert that money to digital cash for diverse functions. The concept of digitalisation is making clients socially virtual, and Eko desires to lead them to financially virtual. Therefore it is fully leveraging systems and infrastructure along with Aadhaar, NPCI, smartphones and driving at the digital wave.

Editor’s Note

In order to accelerate the evolution of a a hit and economically possible payments technique in India, the focus have to be on constructing simplified products for customers and addressing proper consumer needs.

In this regard, Eko rankings in its simple and relaxed method to offer digital inclusion to the unbanked. Eko is bridging the space between conventional banking infrastructure and people who do not have get entry to to banking.

In its endeavour to make spending from pockets a normal habit of its targetted target audience, it ought to be able to leverage similarly growth and scalability. Yet studies has proven that one out of  non-customers haven’t used digital bills due to the fact they observed the product too complex to apprehend and sixty one% of non-consumer merchants discover it too complicated to use.

For a rustic that looks poised to bypass the plastic technology and jump to cellular faster than any kingdom, this shows that there may be nonetheless a big expanse waiting to be tapped. And Eko has possibly touched simply the end of the iceberg.

Author Biography.

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Editorial Team

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