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January 16, 2018
David Johnson, Senior Vice President, Emerging Commerce Products
Happy New Year and welcome to the continuation of our discussion on India and the potential influence loyalty can have on consumers migrating toward digital commerce. If you haven’t read Part 1 yet, I’ll provide a quick recap to get things started.
India is a country rich with culture and pageantry. A country of 1.3B people; a majority of which live in rural areas. As consumers, they are just beginning to embrace the shift towards electronic payments. Merchants are joining in as well, with POS terminals almost doubling from November 2016 through September 2017. As the move from cash and checks continues, the need for loyalty programs will increase significantly. The challenge will be creating a product that meets the needs of both the consumer and the financial institution, all while helping demonstrate to both parties there is value in the loyalty they exude. There, you’re caught up.
So where do we go from here? The belief is that an opportunity exists to develop a loyalty platform that can innovate how Indians view – and transact in – the payments space. Experience has taught us that simply transferring an effective U.S.-based solution will most certainly fail. As such, here are some of the areas that are being considered as we work to answer the question of, “How do we move forward?”
The biggest priority in establishing a customer loyalty program in India must revolve around customer engagement. That begins with the fundamental task of opening communication and a user interface that meets the customer in their day-to-day life. While 460M people with internet access is an extraordinary number, this only represents a fraction of the general population. Additionally, a strong majority of those users access the internet via mobile devices and smartphones. This leaves over 800 million individuals that will require an alternative method for dialog and transactional opportunity.
Significant changes are on the way as the internet revolution is moving fast in India. According to multiple projections, over 500M previously unconnected individuals will be joining the digital market in the next five years. To put this into perspective, the population of the United States is roughly 327M. With major strides in the access to and affordability of data and a booming middle class, the opportunities are there to inform and transact with an ever-growing audience.
The right approach to bring loyalty to the people of India is both simple and complex at the same time. From the fast-paced lifestyle of the big city to the grass-roots relationships in the more remote areas, each consumer has unique needs that need to be fulfilled. The ultimate solution will probably be a blended one, with communication lines running through the electronic avenues as well as face-to-face interactions for those that are transitioning (or resistant) to connecting to the online world.
By now you’ve probably heard the (cough, cough, fictional) story of the Chevy Nova. The story talks about a U.S.- based automobile that was introduced to Latin America under the same name, which when translated into Spanish means “it doesn’t go.” Not exactly the best name for a product that is meant to provide transportation. The article has a couple of other stories if you need a little chuckle.
In the previous article from Omidyar Network, they used the example of the cart icon on just about everyone’s website or app. While commonplace in the U.S., there is probably a good number of Indians that neither recognize nor relate to that symbol in relation to shopping. Would you have thought about that when designing the UI? What else might need to be considered?
Let those examples be a warning to everyone attempting to enter a country from the outside: Don’t do it, alone. The successful product you are proposing to India and the product that India desires might look very different. Make sure you have the right resources to help bridge the gaps and effectively bring your products to market.
FIS™ has the advantage of already having a strong presence in India. Our center in Mumbai – one of many – has nearly 5,000 employees. Those team members forge relationships with the financial institutions and service providers, allowing for the sales approach to come from trusted and in-country individuals. This, in turn, helps generate invaluable feedback into the wants and needs of the customer’s expected benefit from the loyalty solution being offered. Additionally, we have partners to aid in important operational requirements such as customer service and communication.
Let’s take company XYZ, which is headquartered in the U.S., has development teams in Canada and business resources in India. They’ve discovered an opportunity to introduce a product in India, spent capital and resources preparing their go-to-market strategy and get to their first big presentation to a client. The first question, “Where are your servers located?”
That question can make or break how the rest of the conversation goes. Some countries have strict in-country server requirements. Others, like India, have considered it or have regulations in place that restrict the use of off-shore data exchanges (page 25). A full data localization policy in India would have an estimated financial impact of $14.5B with an 11 percent reduction in the average monthly salary (pages 10-11) – that’s significant. Then there is the client’s general preference. In the world of hacking and NPI breeches, making sure a company’s data is secure must be top of the list. There is a good chance you could lose a deal if the competitor is local or already has all their operations in-country.
There are plenty of other barriers to consider as well. Language and currency are a necessity. While Hindi and English are common in India, there are over 20 officially recognized languages and hundreds of more dialects. Local currency conversion – regardless of country – must be made available to the customer at all the operational touchpoints. The goal is to anticipate all the areas that could deter the success of your product and enhance it in advance of bringing it to market.
With its vast population and growing economy, India is on the verge of becoming a global financial leader. You can hear it in the buzz of the payments revolution – clients asking about loyalty programs, merchants wanting mobile solutions to run their business and consumers switching from paper to digital tenders in droves. All the indicators are pointing toward a new landscape on the horizon. One that will transform the way people transact from Chennai to New Delhi.
FIS™ is actively working to meet the needs of our clients in India. We have begun the process of creating and delivering products that utilize the expertise of our U.S. operations, yet provide solutions that are uniquely Indian. After all, there are many differences in how each customer goes through their decision-making process. Those differences are only amplified between nations and cultures. To be a global leader, you must win at the local level.
Senior Vice President, Emerging Commerce Products
DJ is the Product Division Lead over Loyalty, Prepaid, EBT – Government and Merchant Products. DJ joined FIS in 2007 and has over 20 years of payment industry experience with roles in product development, strategy, consulting and business development. Before FIS, DJ managed Online Banking and Bill Pay for a Top 15 US bank. DJ earned his MBA from Emory University and a degree in Finance from the University of Florida.
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