Tuesday, August 25, 2015

Will Digital Wallets become Relevant soon?

Digital Wallets are everywhere. In the age of the smart-phone, anything that doesn't happen at the click of a button is too much of a bother. Application this very same line of thought is what led to the rise of digital wallets. Several e-commerce marketplaces facilitate payments using a wallet. In some places the usage of wallets is encouraged by offering discounts. Uber has successfully taken the digital wallet to every home. However, there remains a degree of uncertainty as to where this is headed. The relevancy of having a digital wallet is under scrutiny now.

Several independent researches claim that the current digital wallets are not delivering. The research data pointed out the fact that a lower percentage of consumers are currently using the mobile wallets. This maybe because the technology is currently not delivering what the consumers need. There is an ever increasing interest in mobile wallets but the mobile wallet technology that exists today would not be able to hit all the consumer pain points. The wallet technology can surely use a few advancements to make it attractive to the average consumer.

The increase in smart-phone adoption has brought about a rise in the use of digital wallets. Although a quarter of the smart-phone users today use apps that incorporate digital wallet functions, as low as 2% of consumers are using a digital wallet. Also, adoption of digital wallets is up by nearly 70% compared to the previous year.

All the statistics aside, the low rates of adoption of digital wallets can be attributed to several things. The major issue might be the probable misdirected approach of the Digital wallet players. The objective so far has been to offer speedier and simplified payments. However, what the market currently needs is mechanism that allows consumers to spend, save, shop and engage with the retailers of their choice. A debit or a credit card is not too much of a burden to carry around. Hence, if you're focused on making that process easier then this technology is going nowhere.

The real pain point of the consumer arises when they have to carry around a clutter of their coupons and gift cards. Any random consumer surely has several of these loyalty and gift cards with them. The game changer for Digital Wallet technology will be when all of these cards are integrated together in a single wallet. That would solve a real problem for the consumer and indeed hasten adoption. Additionally, you can even add options for ID cards and storage of receipts. Having such a varied range of information complied to a single Wallet location would definitely be incentive enough for the consumers.

Thursday, August 13, 2015

In the beginning… is the Alphabet

 By Premkumar Bhagawatsaran, CEO, Ideal Invent

Google Alphabet

The Alphabet controls information – world information - through Google. No wonder they called it Alphabet. While the markets cheered the creation of Alphabet and differentiation of product lines into revenue generating and experimental ones, a lot of focus is on the new CEO and the path he takes to keep the moolah flowing while steering the biggest information company in the world.

So I pondered over the trillion-dollar question - which one will be successful in the long run - Alphabet or Apple? My bet would be on Alphabet. While Apple specializes in making things easy and practical for billions – and hence the near trillion dollar market capitalization, I would still bet on the Alphabet to gaze into the future and experiment on technologies that would guide us in the coming decades. If one needs to summarize the mission of Alphabet (from the outside), I would say in a rather crude way ‘make people out of machines and machines out of people’.

Take the self-driving car, pioneered by Google research. In the near future, your car will do the driving for you, it will drop you at your office and park itself or run errands or go back home to attend to other errands. Your car will diagnose itself with enough sensors to know that it needs a overhaul, a change in the brake pad or needs a drink (brake oil) and it can drive itself to the garage. It will of course keep you informed days ahead. If this is not making a man out of a machine what else is.

Now take the other end, imaging you are entering a conference attended by Industry captains and Thought leaders - your competition of course is there – all you is need is one glance to know about them. Your glasses (in whatever form it will be available) will capture, collate information, do a facial-recognition match, bring up their LinkedIn profile, face book feeds and in an instant you will know who the person is, which school, company, and even what she was doing the last few weeks. Now take this further and get into the realm of Bionics – imagine all of this was fed into an electronic retina (Google does this now to measure sugar levels) and you just need one glance and know everything. If this is not making a machine out of man what is.

While the market currently rewards its dizzying sales numbers one hopes that Apple does its part to invest into future technologies. Alphabet on the other hand, apparently knows, to quote Churchill, “The empires of the future are the empires of the mind”.

Thursday, August 6, 2015

Online lending marketplaces and the elephant in the room

By Marketing - IDEALINVENT

(Image credit: Guardian)

Peer-to-Peer Lending is an online loan dissemination method that challenges the approach traditional banking institutions take towards credit lending. Instead of extremely time taking procedures stipulated by a bank or a credit institution, you can easily obtain a loan through the P2P platform online. The platform allows, lenders and borrowers to directly interact and discuss loan terms. Typically, the transactions happen between two individuals.

The growth of the P2P sector is largely due to the fact that alternative lenders are offering innovative and competitively priced loans that are easier to obtain. Filling up a simple online form can make you eligible for a loan in just a matter of hours. The high interest yield is now attracting more and more institutional lenders to this field. P2P platforms are seeing a high influx of traditional lenders who are looking to cash in on the attractive interests that this platform can yield. With the availability of both traditional and alternative lenders on a single platform, the definitions of P2P are changing fast. P2P platforms are now more popularly known as Online Lending Marketplaces.

This marketplace is ideal for small and medium business owners and individuals looking for quick unsecured personal loans. SMB owners need not jump through hoops to get a competitive loan anymore. The lenders on the marketplace make use of algorithms to analyze and predict the financial health of the business. Current cash flow statistics and data on the performance of the business goes a long way in judging the potential of the borrower. The USP of the Marketplace lending model, however, is that borrowers can compare and shop for loans on offer from a variety of lenders. This effectively cuts out on of the major problems faced by lenders and borrowers alike, the search costs. Marketplaces generate revenue by charging a small fee from borrowers who are sanctioned a loan.

But what about the elephant in the room? When do the regulators step in?

The Online Lending Marketplace has grown leaps and bounds over the past few years. However, it still has a lot of catching up to do. Traditional lending operations still handle an exponentially higher volume of loans. With the rate at which the Marketplace is growing, industry analysts predict that it will be trillion dollar industry by 2025. This kind of extensive growth may come at a price, some analysts fear. Those who advocate regulations argue that with this model SMB's may become the next sub-prime lending crisis if left unchecked. There is also the question of transparency. Lack of a regulatory oversight means that the online lenders may not be accurate and transparent always.

On the contrary, a majority believes that imposing regulations on the Online Lending Marketplace at this stage might stifle innovation and the progress of the model as a whole. The new entrants are popularly being seen as disruptors who are here to replace an inefficient and outdated marketplace. Early and aggressive regulations at this stage will only serve to cut off the innovative access to funding that SMB's are currently relying on. Traditional banking institutions will tell you how strong post-recession regulations have cut their wings. Banks fear that they may no longer have the competitive edge over the new entrants.  

The Online Lending Marketplace is crucial to the survival of Small and Medium businesses. It is important to sustain this model by giving it ample space to grow. Post-recession times have seen a great number of opportunities open up. And the way that SMB's can compete in this market is by being able to get access to capital when they need it. Innovation and the onset of technology will continue to drive progress in this field. However, not having any regulations is just as harmful as over aggressive regulation. Any central regulatory body that would take up this responsibility would need to try and strike a balance between the two. The Marketplace needs to be given ample room to grow with just the right amount of oversight and regulation.