India launches ubiquitous mobile banking infrastructure
The United Payment Interface (UPI) launches commercially in India on Monday 18th, April, 2016. The first step was the launch of a national biometric identification system. This first step has met with apparent resounding success.
So far, India’s attempt to assign every citizen a unique 12-digit number associated with a person’s unique iris, fingerprint or facial features, is succeeding—just last week, Aadhaar reached its milestone of registering 1 billion people. With more than 80 percent of Indians enrolled, it gives the payments system a solid base to build on.
The Bloomberg article goes on to note that the UPI will bring capabilities similar to M-Pesa in Kenya which means new companies can offer low cost banking and money transfer to millions who have never even had a regular bank account, due to availability and cost. It references one such offer coming from Khosla:
Vinod Khosla, billionaire investor and co-founder of Sun Microsystems. His Bangalore-based incubator Khosla Labs is backing an Indian startup called Novopay, which offers mobile banking at 44,000 kiranas, or neighborhood convenience stores, in the country.
What I and many find interesting is that while the motivation for these initiatives is to bring banking to the unbanked, the methodology and consumer costs involved would be a very attractive proposition to many in the west who are very ‘banked’.