SM: When did you make the decision to go to India?
CR: A little over a year ago we had an investor say “it is time to go to India now”. I went over to India and it was clear the opportunity was there. By the time my trip was over I hired a head of India operations. In India we had to change the product for regulatory reasons and we can only use a limited model which is the bank model. In the US we are a money transmitter, in India we are a managed service offered by a bank. Last month we launched with YesBank and we are about to announce three more banks in India.
We are working with both public sector and private sector banks to increase the number of banks who are offering this service. Even though we are sticking with a very conservative model, it is not considered conservative by the Indian government. We need them to be comfortable with what we are doing. We are up and running in the US and India. It is our intention, this year, to offer a transfer service between the US and India. Ultimately our aspirations are to have Obopay support US to many country remittances.
SM: Have the microfinance institutions embraced you?
CR: Embraced is the wrong word. We have been in conversations with various microfinance groups about taking Obopay and using it as the front end to microfinance technical solutions. I think it is a natural for distribution and collection of loans.
SM: There is a big administrative hurdle in that whole microfinance scaling issue, so this sounds like a natural fit.
CR: I am not sure the microfinance industry has the back office technology they need. Think of us as the front office, the last mile to the customer. We have been in conversations with Indian microfinance groups regarding their technology development and have asked them where they are in terms of being able to support us with their backend applications. They are all interested but don’t have the technology in place yet. We are particularly interested in microfinance in India. 90% of urban Indian adults have a mobile phone and only 16% have a debit card.
SM: SME could be a big market for India.
CR: We think that there is an opportunity for this to be the merchant terminal of choice. All merchants have mobile phones, and so it is not too much of a leap to think about this. I think there is huge potential there.
SM: Are you also doing Mexico or Africa?
CR: We are in conversation with a carrier who wants us to go to Africa this year. We have a conversation going with a couple of different groups in Latin America. As a company we have a big commitment to the US and India. Most of our energy right now is focused on scaling those businesses. I think it is going to be even more so when we start doing remittances between the US and India. The US is still the number one sender of remittances all over the world.