Tuesday, March 23, 2010

Banking to the Masses via mobile phones

Eko, an Indian start-up that has partnered with State Bank of India (SBI) to provide mobile banking to the millions who would otherwise never realize the benefits of modern day banking, has truly chartered a course in building a business aimed at the 'Bottom of the Pyramid' espoused by C K Prahalad.

The business model is straightforward and focussed.The primary problem Eko tries to address is to get the millions of Indians who have never had an account in a bank to benefit from banking services. Eko tries to solve this problem by using the ubiquitous mobile phone as the channel. The “tellers” are the tiny corner groceries that dot every neighborhood and street corner in India’s crammed urban areas and expansive rural areas. A Eko customer pays another person by typing the bank’s short code, then an asterisk, then the mobile number of the person being payed, then an asterisk, then the amount, then another asterisk and finally the "signature". No SMSing, No WAP, No GPRS required.

The signature is another innovation. Each Eko customer has a mini pocket booklet that contains 11 digit codes. Each 11 digit code has 4 black marks positioned randomly at any of the 11 digits. The person needs to enter his/her 4 digit  pin against these black marks. Verisign has endorsed this method !

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