Hello Paisa intends to connect rural Nepal to the country’s primarily urban-centric banking system. With a majority of the population who has never had a bank account, many of whom don’t even believe in having an account, can Hello Paisa reach its goal? CEO Suraj B. Pandey shares his company’s story.
Can you tell us about origin of this mobile platform?
Approximately, only one third of the population are using formal banking services in the country. I see it as a huge market potential for the banking sector. We started Hello Paisa Mobile Financial Services Platform with the sole idea of closing this gap between the financial institutions and those deprived of access to finance.
I think that there are more than 300+registered financial institutions (FI) in Nepal. However, the primitive and cumbersome processes, lack of proper infrastructure, and the tough geographical variability of our nation make it difficult for financial institutions to provide services in rural parts of the country. Only two out of ten people in Nepal have access to formal banking.
But at the same time, you must be aware that mobile telephone penetration in Nepal is growing rapidly and we already have more than 70% of the population using mobile phones. So we have tried to come up with a service that can provide an affordable alternative technology using mobile phones to cater the un-served and the under-served or so called the “un-banked”.
There are a few other mobile payment services in the market, how does Hello Paisa intend to differentiate itself?
We are not trying to provide just mobile payment solution, we are offering a complete financial services solution comprising of savings products, interoperable branch based and agent based off-branch banking services, real interbank fund transfer facilities, remittance services, bulk disbursements and more.
Another feature of our service is that financial institutions are our customers and the end users are the key stake holders. Our services is allowing the banks to cater to the un-reached population.
What challenges exist for introducing a new technology?
Majority of the people in Nepal are still in the stigma that “if they keep their money in the bank it is going to be worthless”. The key challenge here is to take the money stashed under the mattress and bringing it into the mainstream economy. The team at Hello Paisa has put in a lot of effort and work to make Hello Paisa as seamless and easy as possible. Hello Paisa services as provided by the partner Banks and Financial Institution’s (BFI’s) can be used by anyone with a mobile number who can read numbers, send SMS messages and answer calls.
Hello Paisa works on any ultra low cost handset (ULCH).The users who cannot read English can also use Hello Paisa as the transactions may be initiated with number based SMS syntax. The confirmation of the transaction is made with an automated call with prompts available in both Nepali and English.
The product deals with both money and technology, the mix can be potentially high-risk. How does Hello Paisa plan to cope with the risks?
When it comes to money the services provided through Hello Paisa are the services provided by the BFIs. The users are banks’(BFIs’) customers, and the electronic funds channeled through Hello Paisa are accounted for at the banks. Currently, the 40,000 users of Hello Paisa are distributed among the eight partner BFI’s and are the customers of those respective BFI’s.
Hello Paisa was developed over a period of almost seven years with immense research, numerous experimentations and thought process. It uses the latest technology and methodology in terms of both software and hardware. But no doubt the risk still exists when there is technology involved. At Hello Paisa, we are constantly working in conjunction with our partner banks to mitigate technology risks and adopting future proof technologies. We follow a strict security, redundancy and back up standards that help us reduce these risks substantially. Our primary concern is that the customers should be able to access their funds, no matter what; and we have that mechanism in place.
How do you plan to move forward?
Currently the service is available in over seventy districts across Nepal with more than seven hundred touch points including interoperable bank branches. Our focus till date has been mostly semi-urban and rural centric, however efforts are now being made to focus in Kathmandu and other major cities across Nepal.