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Vinod Khosla on Square company’s board
Indian-American venture capitalist Vinod Khosla will join the Board of Directors at mobile payment start-up Square, founded by Twitter Chairman Jack Dorsey .
The Silicon Valley venture capitalist’s firm Khosla Ventures is an early investor in Square.
Khosla will be replacing Gideon Yu, Facebook’s former chief financial officer.
Yu recently left the company’s board and Khosla Ventures to join the professional football team San Francisco 49ers as Chief Strategy Officer.
“Square is thrilled to welcome Vinod to our board. We have worked closely with Khosla Ventures since our inception and Vinod’s expertise, history and input will be a tremendous asset to our company as we continue to grow,” Square CEO Dorsey said in a statement.
In 2009, Khosla Ventures led Square’s initial venture round queueing up the company for its launch, and participated in Square’s Series B round in January 2011, the mobile payment firm said.
The IIT-Delhi alumnus co-founded Sun Microsystems in 1982.
He went on to become a general partner at Kleiner Perkins and then founded his own venture fund Khosla Ventures in 2004.
Khosla currently manages more than USD 1 billion in investor money. His firm focuses on clean technologies and information technologies.
Square, which recently received new strategic investment from Visa, achieved a target of processing USD 3 million in payments per day.
Schwab Android app adds mobile check deposits
After launching its official Android app (download) only two weeks ago, Charles Schwab Bank and Brokerage has already released an update with a much-needed feature: mobile check deposit. This adds some serious power to an app that already lets you transfer money between accounts, view balances, and track and trade stocks.
To deposit a check, select either your Schwab Bank or Schwab brokerage account, enter the deposit amount, take photos of both sides of the endorsed check, tap Submit, and you’re all set. But be warned: checks cannot be wrinkled or folded, and pictures need to be clear, in-focus, and free of shadows.
Since a common method of depositing paper checks to Charles Schwab accounts is via postage-paid snail mail (Schwab branches are not the most ubiquitous), the update is important to many of the financial institution’s account holders. In fact, we think this feature alone might be enough to get many of them on the Schwab mobile app bandwagon.
The Schwab Mobile app with mobile check deposit is available now for Android (download) and iPhone(download).
Mobile VAS to be $4 bn market in 2 years
The next growth driver for telecom industry is mobile Value Added Services (VAS) which is expected to be USD 4 billion industry by 2013, says a study.
The focus of operators is to provide MVAS services in the areas of Banking (for better banking facilities, penetration), Healthcare (for better infrastructure in rural areas), and Education (for better access to knowledge), according to a study prepared by global consultancy firm Deloitte.
The study was done during January and February 2011 and was undertaken via online research, which results in a high concentration of urban professionals. In all, 2,028 responses from India were included in the study.
The study says that MVAS offers the operators multiple revenue streams – from subscribers as well as advertisers and businesses.
Going forward VAS is expected to grow at a very fast pace provided VAS providers come out with the products that are beneficial for ‘Aam Aadmi’, add value to their life and improve their earning potential.
The opportunities for telecom industries combined with other industries are many fold and would also result in improved quality of life for the common man, it says.
The study also finds that, mobile internet and data cards are more popular among younger generation who constitute about 50 per cent of the Indian population today.
Most of the respondents want two or more service providers in order to have different services from different operators.
Further, falling prices of handsets and increasing competition from local vendors are forcing the global mobile phone manufacturers to differentiate through services like application stores.
Increasing disposable incomes have boosted willingness to spend on services that bring value among the upwardly mobile citizens today, but network coverage and customer service are the uncompromising needs.
The study reveals that 87 per cent respondents having smartphone access internet through their smartphone, while 62 per cent respondents are ready to pay a premium for connecting devices.
With 3G services, the Indian telecom industry is set for a second telecom revolution in wireless space. It will also benefit those sectors in which these services will be offered, by providing better infrastructure and services.
Deloitte’s initial results of study show that traffic carried by operators might increase upto 300 times by 2025. More spectrum will be required to reduce congestion in the networks.
Meanwhile, the study advices that since spectrum is a limited resource, its allocation should be done more efficiently. It also suggests spectrum harmonisation.
Concerns About Payment Gateways & Logistics Voiced At E-Commerce Forum
E-Commerce is India is at a very nascent stage, there is hype, but a lot needs to be sorted out before it can thrive. At least this was the prevailing sentiment amongst CEOs and other execs of major e-commerce companies attending the VC Circle E-Commerce Forum at New Delhi. Most felt that logistics and payments are the areas that need to be addressed. “What they said” notes from the conference:
– B. Muralikrishnan, Sr. Director, Marketing & Product at E-Bay India said compared the Chinese e-commerce giant Taobao, which has a 79% market share with more than 400 million product listings and stressed on replicating its manufacturer friendly model; in contrast E-Bay India has 1 million listings. The share of top 10 cities in E-Bay India’s business was around 60%, while business from tier 1 and 2 cities was also growing, as tech products are not easily available in the regions. Muralikrishnan was skeptical about the use of Cash On Delivery as a payment mechanism, but at the same time, was critical of the problems that plague payment gateways in the country, which lead to a bad e-commerce experience.
– Vishal Mehta, Founder & CEO, Infibeam emphasized on the need for local language content on e-commerce sites, giving the example of China and said that English is spoken only by a handful of people; he predicted that in the coming years, 50% to 60% payments online would still be through cash on delivery.
– Dhruv Shringi, Co-Founder & CEO, Yatra.com said that domestic flight sales account for one third of all online sales for Yatra, International flight sales are just at 2%-3% at this time, and the sale of holiday packages is minuscule: so it’s mostly hotels. He voiced doubts about choosing mobile, saying that customer communication and post sale services can be done through mobiles, but he doesn’t see it as an opportunity for selling Air tickets since most people travelling by Air own a computer and like to book through the web site. However, it could be used for bus and railway ticket bookings.
– Sachin Bansal, CEO & Co-Founder, Flipkart felt that payments and logistics are not in a good shape in the country and is making it difficult for customers to transact online. He informed that Flipkart is planning to introduce credit and debit card swipes for home delivery. Flipkart’s conversion rates were in mid-single digits.
– Vinay Gupta, Founder of Via, said that its hard to sell anything except tickets online. Holiday package sales are expected to remain offline for the next 3 to 5 years. He advocated the adoption of a hybrid concept where sales and membership can be done offline through retail partners and said that India needs an assisted online sales model.
– Adarsh Gupta from music label Saregama said that there is a need to improve search and discovery. On being asked about his stand on DRM, he replied that Saregama would only sell DRM free music. He credited Caller Ring Back tunes and their subscription model for driving high growth for the company.
Ozone Media Claims Regional Language Ads Outperform English Ones
The Performance Users Study conducted by Internet advertising network Ozone Media, analyzing 1000 online ad campaigns on its network, from January 2010 to December 2010 across various segments including education, travel, matrimony, real estate and finance, suggests that online ads in regional languages namely Hindi, Tamil, Telugu and Malayalam, are 30% more efficient in getting response from Resident Indians compared to English language ads. The sample consists of responses from resident and non-resident Indians. However, the sample size is not known, and readers should keep in mind that performance of advertising can vary across networks and sites: these results should be seen as being indicative of performance across Ozone Media’s network of sites (which has regional sites), and not of other networks.
Response to Regional Language ads across segments
According to Ozone’s report, business & financial services and matrimony categories are the ones using regional language ads intensively in their web campaigns. It says that although 12 categories were considered for analyses, these two have leveraged regional language advertising in a major way.
Effective Efficiency of BFSI and Matrimony Categories - Resident Indians
Effective Efficiency of BFSI and Matrimony Categories - Non-Resident Indians
While, resident Indians respond more to matrimony ads in English, their Non-Resident counterparts registered a higher conversion rate with regional language matrimony ads. The reverse was observed in the case of business and financial services ads.
Language Chart
Ozone observed that Tamil and Telugu were driving the maximum number of conversions in regional language ads, across its network.
Effectiveness of Web Ads on the basis of Banner Size
Popunder, Catfish and slider ads were found to be most effective across both resident Indians and NRIs, while Leaderboard, Full banner and Popunder ads were found to be most efficient across both segments.
Ozone feels that this is just opposite to the perceived notion that ads which are in-line with the website’s content get a better response. The report also mentions that NRIs respond better to strip ads whereas square banners get better responses from resident Indians.
Google: India Has 100M Internet, 40M Mobile Internet Users; India Search Trends
“Search queries originating from India have grown 20 times in the last five years, Rajan Anandan, VP-Sales & Operations at Google India, adding that for Google, India is the third biggest Internet market in terms of users, withover 100 million internet user base, adding that 40 million people in India access the Internet from work, and 30 million from Cafes, apart from 11 million households that have a broadband connection installed. Anandan, speaking at the VC Circle E-Commerce Forum, held in Delhi last week, made a strong pitch for the Internet, saying that the amount of time that an average user in India spends online is now on par to TV viewing time at 16 hours in a week.
On the Mobile Internet, Anandan said that more than (according to Google estimates) 40 million Internet users in India access it through their mobile phones and there are 30 million app downloads in one week. The number of search queries originating from mobile phones have grown four times in the last 12 months and 50 times since 2007. Anandan predicted that more than 300 million people in India would be hooked on to mobile internet by the year 2015.
Segment Specific Search Trends
Anandan emphasized on the fact that Indians go online to search for product information and believe inResearch Online and Buy offline. He gave an estimated breakup for various product categories:
– Auto – 33% Research online Buy Offline and 3% Research and Buy Online
– Healthcare- 39% Research online Buy Offline and 5% Research and Buy Online
– Media and Entertainment- 26% Research online Buy Offline and 16% Research and Buy Online
– Retail – 65% Research online Buy Offline and 19% Research and Buy Online
– Technology Products- 72% Research online Buy Offline and 21% Research and Buy Online
– Internet Banking: Google also found that the weekly queries for Internet banking have gone up 200 times in the last 18 months, which shows a lot of Indians want to bank online.
Travel Search
– 40% Research online Buy Offline and 29% Research and Buy Online
– 50% searches in India were for budget hotels that offered sub Rs 5000 a night tariff. He said that this was an indication about potential of the segment and the need for building more ‘Ginger’ like hotels.
– This was followed by Air travel queries at 27%
– Holidays at 10%
– Bus and rail at 7.42%
– Car rentals at 1.97%.
Local Search Opportunity
Anandan pointed out that there was a massive untapped opportunity in local searches, which have increased five times over the last year and out of the total, 50% are made from mobile phones. Only45% of those local search queries are covered by Indian businesses and the rest remain unresolved. He advocated the Microtransaction payment model, keeping in mind the sheer volume of users in the country.
E-Commerce Payment Issues
Anandan felt that E-Commerce companies in India are not doing enough to address the segment and payment hiccups, lack of awareness and trust and a good online experience were the barriers in the growth of e-commerce in the country. He mentioned that most companies were using outsourced Internet marketing, which should be avoided beyond a point. Each should have a designated CTO and Technology team to avoid hiccups.
He said that e-commerce companies need to focus on the website design to make it clean, fast and give the user a great online experience by doing things like avoiding pop-ups to register when the user lands on the site. They need to integrate social and search elements but at the same time keep it relevant and cover the entire customer landscape.
On the payment side, he stressed on the need for cash on delivery as a viable payment option, saying that players who don’t want to do cash on delivery should not get into e-commerce.
Idea Cellular and Axis Bank Launch MyCash
Telecom operator Idea Cellular in partnership with Axis Bank, has formally launched Idea MyCash, its financial inclusion platform offering banking facilities including money transfer on mobile. Under the arrangement, Idea retail outlets will act as Customer Service Points. The two had earlier signed an MoU by virtue of which Idea Cellular had become a Business Correspondent to Axis Bank, to extend branchless banking to the un-banked and under banked population segments.
Through MyCash, Idea will provide basic banking services like cash deposit, cash withdrawal and balance enquiry and will also enable money transfer between the migrant population in urban areas to their beneficiaries back home. The remittance facility will be initially offered in the Dharavi – Allahabad remittance corridor and will be later extended to other remittance corridors.
As a banking correspondent, Idea will facilitate in the opening of No Frills Savings Bank accounts for its subscribers through its retail outlets. Axis Bank customers will be able to send and receive money through Idea’s M-Commerce platform. Beneficiaries will be able to facilitate a Cash Out at any Idea retail outlet.
Although its not clear whether the launch is on a country wide basis, Idea declares that its the first to go “live”. There have been other such announcements from Vodafone and Bharti Airtel. While Vodafone signed up to become ICICI Bank’s business correspondent, Airtel formed a JV with SBI to offer banking services, which it said would be incorporated by 31st March. Airtel also launched Airtel Money, a prepaid cash on mobile service, in Gurgaon.
As we previously said, we expect this to eventually (within a few years) be an all-banks-all-telcos phenomenon. That’s when Telecom Operators will become like ATM’s, and you’ll be able to withdraw money from any bank account from any retail outlet.
E-Payment Systems Can Save $22 Billion for India
An electronic platform for government payments to and from individual households could save an estimated Rs 100,000 crores for India, says a McKinsey report.
Saving this much money an year could mean a reduction in the country’s fiscal deficit by more than 20 percent, or it can boost its welfare spending by over 25 percent, or fund the entire cost of the Food Security Act.
E-payment will ensure that around 80-100 million poor households in India will have unparallel access to secure and convenient benefits directly from the Government without the interference of intermediaries. According to the report titled ‘Inclusive growth and financial security’, the present cost for the implementation of national e-payment infrastructure stands at Rs 70,000 crores and so the system could theoretically pay for itself in just one year.
“A national e-payment system is a critical step in achieving India’s long standing and fundamental goals of inclusive growth and financial security for its poor. The benefits to all stakeholders of a modern, reliable and well functioning payment platform are numerous and substantial,” the report said. According to the report, a greater penetration of an e-payment set-up is likely to encourage greater participation from the rural poor citizens and bring the central government closer to its goal of reducing poverty and hunger through its welfare, food and housing subsidy schemes.
The McKinsey & Company report suggests that electronic payment systems improve the effectiveness of government services to the poor, provide improved efficiency in other government functions such as tax collection, maintain law and order and create new business opportunities by enabling the delivery of new products and services.
Starbucks Tests Mobile Payments in New York
Starbucks (NASDAQ:SBUX) today announced the expansion of its Starbucks Card Mobile payment test to nearly 300 company-operated stores in New York City, and Nassau and Suffolk counties on Long Island. This builds on the successful launch of Starbucks Card Mobile App for select BlackBerry® smartphones, iPhone® and iPod® touch, and the Starbucks mobile payment test which started in fall 2009. Now, Starbucks next mobile move will offer customers in the New York City area an enhanced Starbucks Experience, including the ease and convenience of paying for their favorite Starbucks® beverage with their mobile phone.
“Mobile technology is part of our customers’ daily routine and with the expansion of mobile payment in our test cities, we’re seeing more and more customers using their smartphones as their mobile wallets,” said Brady Brewer, vice president Starbucks Card and Loyalty. “We’ve heard from our customers on My Starbucks Idea that they want a faster, more convenient way to pay. Now we’re inviting customers in New York City and Long Island to experience mobile payment and the fastest way to pay at Starbucks. Mobile is just one of the ways we continue to innovate and enhance the experience for our customers.”
In response to customer feedback, the Starbucks Card Mobile App was first developed for select BlackBerry smartphones and iPhone as these devices are used by more than 71 percent of Starbucks smartphone-carrying customers. To experience mobile payment at participating New York City-area Starbucks, customers just need to download the free Starbucks Card Mobile App on their supported BlackBerry smartphone, iPhone or iPod touch. In addition to the mobile payment feature, the app allows customers to manage their card account, reload their card balance directly from their smartphone with a major credit card, check their My Starbucks Rewards status, or find nearby Starbucks stores. With the Starbucks Card Mobile App, customers will have a barcode on their screen that they’ll hold in front of a 2-D scanner on the counter to pay for their purchase.
The expansion of mobile payment into New York City builds on the successful test program currently in 16 stores in Seattle and Northern California and at more than 1000 Starbucks in U.S. Target stores. The overall Starbucks Card program is experiencing impressive growth and performance, and currently almost one in five of all in-store transactions are paid for with a Starbucks Card, an activity made even more convenient with the introduction of Starbucks Card Mobile App. Customers are on track to load more than $1 billion on Starbucks Cards this year, and at the end of the third quarter, sales of cards were up 17 percent over last year and the reload on existing cards was up more than 59 percent compared to last year.
“With the expansion of mobile payment to New York City, we expect to see more and more customers trading their plastic Starbucks Cards for the digital version on their mobile phone. In addition to the payment capability, customers can also keep track of their My Starbucks Rewards status and reload their card while they are on the way to Starbucks or in line,” said Brewer. “Expanding our mobile footprint gives our customers a new way to connect with Starbucks on the go and transforms the way customers experience their Starbucks Card through the mobile app.”
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