In Part 2 of our interview with K Srinivas, President of Bharti Airtel‘s B2C business unit, which includes all its consumer business and market operations, including Mobile, Telemedia, Digital TV and emerging segments like M-commerce, M-Health, he spoke about losing money on 2G data, and about offloading traffic to Wifi, smartphone addition, revenue sharing with web companies, data pricing, IPTV and broadband operations, among other things. In Part 3, he speaks about Airtel Money, partnerships with banks, split between transactions and others:

MediaNama: How Is Airtel Money Doing?
Srinivas: Let’s ask why are we in this business to start with. Basically, what’s my core advantage? I’ve got a large customer base, and that is one of my core assets, I’ve got massive distribution reach, reaching every single village in the country through a few million outlets, and in this country, the percentage of banked population is small. So if you want to send money from Delhi to any village, the only option is a postal money order or with someone going physically.

MediaNama: And that transaction was already taking place – people were buying recharging indirectly using recharge cards.
Srinivas: In some indirect way, yes. If you look at it, the banking system hasn’t been able to reach out to everybody because creating physical infrastructure in virtually every village is expensive and inefficient. Using my virtual infrastucture, I Can supplement the lack of infrastructure on the ground in an elegant fashion. Is Airtel money about buying a cup of coffee from café Coffee day? The answer is no. It’s clearly meant for people who want to remit and transfer money from one place to another. There are credit cards, and cash isn’t an elegant enough way. It might make sense for remote merchants, who might hesitate from using a credit card online.

MediaNama: You don’t think an NFC system will come into place?
Srinivas: Eventually it will, but it’s an expensive method. For NFC to come to India, you need point of sales terminals, which is an expensive affair. Setting up connectivity, terminals, it will happen at some point, with the large urban utilities like the metros. Through USSD and the mobile mechanism, there is an opportunity. It also enhances stickiness for me.

MediaNama: But most of your marketing push has been on enabling merchant transactions, not on remittance.
Srinivas: Fundamentally, as per the regulation, I do not have the ability to cash out. I can transfer money from person to person, person to bank. The core deal is for me to be able to send money remotely, which is the infrastrcture which is lacking in the country.

MediaNama: What was the partnership with SBI about then?
Srinivas: That’s a JV which we’ve applied for permission, and the RBI has still not given permission. We have launched a banked wallet with Axis bank. You open a no frills account with Axis bank, and using that you transfer money. We are the master Business Correspondent for Axis Bank, who can open sub banking correspondents across remittance corridors. We are setting up those. On the prepaid side, we have an express wallet, for paying the electricity bill, recharge your phone, pay your DTH bill, which doesn’t require KYC because the bill comes in your name. Then we have a Power Wallet for transfer money to another person, which is fully KYC compliant, as per the RBI regulations, for which I need to collect a certain set of documents. That’s not with a bank, still, but a sender needs to be KYC compliant. You’re also allowed to buy any goods and service. The third is what we call a Super Wallet, which is an Axis bank account, which enables you to send money to another Super account, whereby you can also go and cash out. The express wallet is the barebones one, the power one gives a few more functionalities.

MediaNama: You haven’t communicated these options to consumers
Srinivas: At the retail outlets we have. A lot of this is below the line communications.

MediaNama: How does this lead to completing the loop for you from a transactions perspective, on-network?
Srinivas: There are two types of merchants I can have – I can have a physical merchant and a remote merchant. We are tying up with various online merchants, and I see much more usage in remote merchants than physical merchants.

MediaNama: There’s no OTP required with Airtel Money for remote transactions?
Srinivas: Yeah, but you need a pin number. We are enabling the remote merchants.

MediaNama: What would be the split between recharges and non-recharge payments?
Srinivas: We studied Africa and that market is fundamentally P2P payments, with no bank required. It’s not as well regulated as India, from a financial perspective. For us, it will largely be Airtel products, whether recharge or DTH. It’s a new habit we’re trying to create. Fundamentally creating any new habit involves sampling, repeat attemps.

K Srinivas, President (B2C) Airtel On Offloading Data To Wifi, Smartphones, Data Pricing, Broadband
K Srinivas, President (B2C) Airtel On Data, App Stores, Developers, Rev Shares, VAS, Billing Controls