 angle. Please put your hands together as I get on stage. Mr. Saurabh Mittal, head open banking remittance and KYC phone epa. Thank you so much. Hi, good afternoon everyone. I was glad mine was not the first post-lens session. Hopefully we are all energized now after Kedah's talk. So I want to talk about how payments is evolving in India and how we can build a payments brand for the billion Indians, and we hear a lot of talk about India and we hear a lot of talk about Bharat, about the 100 million people who are transacting online versus the 900 million people who are not, people who are financially included and people who are not. So I'll just touch upon not really the differences between the two but actually the commonalities across the board and fundamentally before I start I want to weigh in on two things. First, payments, while we all see a lot of marketing and branding on payments happening in the last five years or so, but fundamentally we should all be cognizant that nobody goes to a website or a platform or a shop to buy a payment, right? You go somewhere to buy a product and then you find a way to pay for that product and which is where the payments players come in. So fundamentally we are enablers and we're not really the product itself which the consumer is chasing. The second piece I would like to touch upon is the fact that payments like a lot of businesses is a tool-sided network, right? There's a merchant who's accepting the payment and there's a consumer who's making the payment but between the two I think the difference between a FMCG brand or a product brand versus a payments brand is for us, while the consumer is the consumer, the customer is actually the merchant because the paying party is actually the merchant in this case, right? So with that let me just talk about, so let me talk about first the Indian payments landscape and then I'll quickly just introduce phone pay and what we're trying to do. So again I don't know how many folks here are from the payments or financial services industry but just as a brief intro to what payments means, right? And how it evolves in different ways in different markets. So there are payments participants which would be your networks which are Visa and Mastercard, your banks which are USB, HTFC, etc. and then there would be payments players like phone pay, Google pay, Paytm and all. Then there are instruments that you use to pay which is what card are you swiping, are you giving cash to a merchant, are you going and paying using UPI and lastly there are form factors used to send and receive these payments, right? Now in the age of mobile obviously in form factors we're seeing a lot of movement to apps, we see a lot of movement to the bottom right which is a lot of people are now using apps instead of devices like past machines, right? And a lot of that is happening because of multiple things. One is the growth of digital in India, the growth of internet in India, right? The availability of broadband mobile internet and also based on the innovation of payments players. So quickly if you then if we look at India as a market, right? While we all talk about digital India and how India is digitizing faster than anybody else, the fact still remains that around 70% of transaction value and 90% of transaction volume is still being done through cash, right? And India is far, far behind the US and UK where it's close to 10%. Second thing, second trend is the growth in mobile phone usage. So mobiles of course came in the early 2000s and growth started with Nokia, right? But what we're beginning to see now is really the tipping point on people buying smartphones and going away from the non-smartphone phones. So if you look at 2018, I think we hit an infection point where till when both smartphones and regular phones, feature phones were growing, right? But if you look at the next five years, feature phones are actually going to decline as every consumer who wants to consume content, who wants to do transactions and wants to use the phone as their wallet or many other things in the or as a television, right? They'll all move to smartphones from feature phones. And this is where Bharat comes into play, right? And they come into the smartphone fold and they start doing payments and they start transacting on the mobile devices. Another parallel I would like to draw is that the value of consumer expenditures paid with cash, sorry, the mobile broadband penetration in India, right? In 2015, we were 150th in the world, right? And in all these industries, we see inflection points and the biggest inflection point for India was Geo, where Geo came in in 2015, slashed the rates, impacted the entire telecom market, right? Some say positively, some say negatively. But what it has done is the per capita consumption of broadband data in India is now leading, is above any other market in the world, right? And a similar thing has happened on payments as well. So all other digital payment modes, when we were in 2015, credit cards, mobile wallets, et cetera, were around $25 billion, right? And in 2016, UPI was launched. And with the launch of UPI, it made payments easier. But more than that, it also opened up a flurry of new use cases. For example, with your card, I could not send money to my wife or my parents with my card, right? But with UPI, I could start doing P2P transactions online. And while that is one separate use case, what that does is it has a strong halo effect on the merchant transactions I'm doing as well, right? Because now I'm used to using UPI, I'm habituated with a use case. And it's much easier for me to now use my phone to pay money to a merchant or send money to a friend or family member. But again, just coming back to the offline point, and I did want to talk about heavily this part of the universe of India, right? Which is, while there is a lot of noise and a lot of talk about how online is growing and how digital is growing and how Flipkart and Amazon have had fantastic Diwali sales. End of the day, 80% of Indian sales still happen offline. And 70% of those sales still happen with cash, right? And 90% by volume. And I think fundamentally that's where payments is headed in India, right? And as we think of building a brand, marketing to consumers, we need to be cognizant of the fact that our customers, which are our merchants and our consumers, are no longer only the people who are exacting online, not the people who are buying on Make My Trip and Flipkart only. But also the folks who are going to their neighborhood Kirana store, right? Or to the Tapri outside and buying a smoke. And that's where we need to look at both sides of that equation, right? What does a payments company do to actually fundamentally add value to their customers? I'll start with the merchants and I'll go to the consumers in a second. For our merchants, again, going back to my first statement, a merchant or a consumer, neither of them, merchant does not try to sell payments. Consumer does not try to buy payments, right? For a merchant, the only reason they need a payments app or a payments product is so that they can actually facilitate their consumers to buy their product in whatever way the consumer wants to pay, right? The only reason for a merchant or the biggest reason for a merchant to come to accept phone pay or pay TM or anybody else is that the consumer that comes to the merchant can actually go and cannot say, hey, I don't want to buy from you because I want to pay using pay TM and I don't have my wallet with me. So I'm going to go to the next shop instead, right? That's lost sales. And when we talk about building a value proposition or building a brand story or a product for our merchant base, I think these are the five key metrics that we look at, right? So we look at the speed at which a transaction is happening. A merchant or if you go to a shop or stop and if you see a 30 person queue at the billing counter, you're probably going to leave your goods there and go to another store, right? So a merchant wants to make sure at peak hours, they're getting payments routed very efficiently so that there's no queuing of consumers. Second, there has to be salience, which is that all consumers can pay to me using this mode. And also for consumers, all merchants accept this mode, right? And I think the hardest part of building a payments company is to make sure you have salience on both sides of the network. Because till you build that salience, it's hard to drive volume growth. And the last is seamless integration, which is again, going to shop or stop again if they have, let's say, 5 to 10% attrition on the sales staff, right? The integration has to be seamless. The employee should understand how they can accept payments using your mode. It should not be reinventing the wheel in ten different ways than they've always known, right? It should be seamless. It should be simple, and it should be easy for them to train and integrate to be able to accept payments. Post this, it should also be simple for them to reconcile these payments versus all the payments they're receiving through credit cards, through cash, etc., into one clear book, right? That they can use for accounting. So these three, while extremely important to build a payments company and a payments brand, these three are hygiene factors without which we'll never succeed, but these three are not, are necessary but are not sufficient conditions to drive success, right? Because everybody will have these. What drives differentiation then for our merchant group is actually support and services, right? It's similar to banking where if my relationship manager is good, I'm more likely to stick to a bank, right? Do you have support? Do you have people available to you when you need them? Or do you have resources available to you when you need them, right? Can we build a very simple merchant app where the merchant can see all their transactions that have happened, that are pending, that are done? Versus them having to figure out manually every single time. On services, I think the core value there is to add value added services. And I don't think India is there yet, right? But a lot of the rest of the world is. If you look at China, if you look at the US, you look at Australia. What you see is that there are payments companies that not only facilitated payments, but they then offer those merchants loans. They offer those merchant systems. They offer them an order management system and so on and so forth, right? So a whole complete plethora of products surrounding payments is required to motivate and engage the merchant. Because in the current day and age, it's very easy to go and put your QR at a store. It's very difficult to keep that QR there for the next six months. This is on the merchant side. On the consumer side, I think these are the three biggest learnings we've had in the three years since launch. One is that we should not look at vanity metrics. I know a lot of valuations and a lot of hype is built using vanity metrics, which is how many merchants you have, how many consumers you have, how many transactions have you done, how much cash back have you given, right? Did you open Amir Khan for the ad campaign or not? But what really drives business in a sustainable way is really value drivers, right, and not transaction drivers. So if I go to Bharat, right, and if I go to, for example, the domestic staff that works at some of our places, they wouldn't fundamentally be as keen to onboard with a payments company to be able to pay somewhere. But their first use case could actually be actually receiving funds. So if I tell somebody that, hey, I'll pay your salary using phone pay from next month, right? And you'll receive it in your phone and you'll be able to see it seamlessly, much more likely. And as we go towards the hinterlands of India, I think that proportion increases significantly. Same way on the other side, you want to help people understand that by using you, they can earn more before you say that you can spend more, right? Nobody wants to spend more. And similarly, you have to tell them that you'll be able to manage your money better as a payments player, because everybody's throwing the promise of I'll help you grow your money, especially on the consumer side. The second point and that point I really want to weigh in on is education and versus instruction, right? And a lot of us keep discussing vernacular languages versus English, versus Hindi as the medium of communicating to the customers, right? And also especially as a medium for building our apps and products, right? So do I want to build an English-only app? Or do I want to build an app in 10 different languages? And I think what we've realized and learned, PhonePay, by the way, launched in eight languages, right? And we are maybe scaling down some of them. Now, it's because we fundamentally understood that consumers actually understand instruction in English, right? So English as a language of instruction where you say, you have a button that says pay, they understand what that pay button means. It probably means you go ahead to the next step. It's similar to what we see on the road, right? You see the directions in English potentially in Hindi in a lot of places, in vernacular in some places. But end of the day, people understand science. People understand English to that level where this arrow means right, right? Or the word right is also understood by the folks who actually don't speak English. So I think as a medium of instruction, we actually believe that English is fine as a medium of instruction. But where vernacular needs to come in is the medium of consumption, right? A medium through which we educate the users on what you need to do, how you need to do it, and why you need to do it, what the steps are, what the user flows are, what your journey is going to be. If you're making YouTube videos, if you're throwing content on the app for people to understand advertising messages, that needs to be vernacular so that they grasp it, right? And the last is to build a trusted contact and not a trusted platform. I think everybody's trying to build a trusted platform. But end of the day, especially in India, everybody needs that one person to talk to, right? If you can digitally be that one person that they can talk to easily, you're actually creating significant value. So this is quick summary on the payments landscape and how we see payments evolving for the next billion users. Just to re-summarize, I think the growth is going to be in offline. The growth is going to be in tier one, tier two, tier three, tier four, all of these cities in the offline space. That growth has to be driven by taking a two pronged approach, making sure you're adding value to your merchant base, which is your end customer, and also adding value to your consumer base by making sure they understand what they're doing and help them manage and grow their money better. Quickly now on how we are trying to evolve and how phone pay has evolved to where we are today, right? Looking at those key tenets. This is where we are, quick snapshot. We have around 150 million users, over 50 million of those are active on a monthly basis, right? 65 million. We do a billion app fires a month. I mean, when we launched, I don't think three years ago we even thought that we need to build servers to scale up to a billion app fires a month. But we are now well crossing well past that goalpost, right? We have acquired over the last year and a half around 7 million merchants. And again, while that number seems huge, there are around 10x as many merchants around in India, right? That we need to go and talk to. Doing around 400 million transactions a month now, which again, I believe is in the top one, two in India right now. But again, these transactions need to translate, start translating more and more into a relationship, right? Which is when a consumer starts coming to you again and again and re-uses your product. And on total payments volume, value we are at around 100 billion run rate analyzed. So how we did this is the following, right? So we, of course, PhonePay was the first UPI payments app that launched. And not just on UPI, but across the board, the company's philosophy is to be an open ecosystem, right? UPI forces that on you, that it's an interoperable network, right? A customer can have any bank account and the merchant can have any QR code. And the consumer will be able to pay the merchant, right? We believe in that philosophy across the board, whether it's on wallets, whether it's on credit cards, debit cards, bank accounts. The idea is to enable consumer choice, right? If a consumer wants to pay using a card, they should be able to. If a merchant wants to accept a card, they should be able to. And vice versa. And again, now on how a payments app actually starts building a brand and starts connecting to consumers and being a part of the journey. Going back again to my first point, when nobody comes to a shop to make a payment, they come to a shop to buy a product, right? How this has been tackled globally and in China especially, is by players who started with something else and then evolved into payments players, right? So VChat was a WhatsApp type text messaging platform. Alipay started off from Alibaba, which is the Amazon or Flipkart equivalent of China, right? And over time, they started building in and adding in more and more use cases that have enabled them to actually hold a customer relationship with them, right, versus just being a transactional platform. And we have a similar approach. We launched PhonePay Switch last month, which again is a medium through which consumer just needs to come on the PhonePay app, right? And they can access all their favorite apps from within the PhonePay app without having to download them. So you can now book your Ola cab through PhonePay. You can order pizza from Domino's through PhonePay, right? You can order your medicines on PhonePay, and so on and so forth. And how we've been able to do this is again by keeping a very, very clear partnership focused agenda, right? At the end of the day, if I'm creating value for myself, but deriving that value from my partners, I'm actually not creating a sustainable business. So the whole agenda has been to make sure we are setting up our partners for success by introducing them at the right time and place to the right consumers, right? Using machine learning, artificial intelligence, big data. We've been able to help Ola drive volumes. For Redbus, in fact, 10% of consumer bookings are actually being driven through our platform today, right? You can now book your flight tickets, your hotel bookings, etc., all within PhonePay. That's on the consumer side, right? Building this one-stop shop, so I spoke about Switch, which is the third block in the middle. But the most common use cases where a consumer first tests and tries a payments app is most likely to send money to somebody else or to do a mobile recharge, which are low ticket items, right? So you need to be good on those hygiene factors, and then you need to build differentiation on other pieces. Which is where we brought in stores. And I'll talk about stores a little more when I talk about a merchant base. And we built a super app where consumers can actually come in and buy whatever they want to from within PhonePay. Instead of going to a merchants app and then being redirected to PhonePay to make a payment and redirect it back, right? And the last is we've started building wealth management, banking, etc. products so that a consumer not only knows how to pay and when to pay. They can also manage their day-to-day finances with us. On the merchant side, the three pieces that I want to touch up on. The first is the hygiene piece, right? Which is a merchant gets to know when somebody made a payment, how they made the payment, what does their daily book look like? Have they been able to reconcile? That's the first piece. The second piece is actually the most important piece for us and for the merchants, which is are you going to be able to drive consumer growth for me, right? End of the day, again, merchants will not come to PhonePay to be able to accept payments if PhonePay was just charging them money and not giving anything in return. I think merchants come to us because we're able to help drive growth of their business with their customers, right? We bring in more consumers. In the offline space that translates into the stores front that I showed on the previous page, which is a consumer today can now be offered a specific product from a specific merchant in the neighborhood, right? They can discover merchants better. They can get more insights on those merchants. They can rate those merchants and see other people's ratings. And that's what drives growth. And the last is, again, the other piece on differentiator, which is adding value added services for the merchant base, right? Where they're not only doing just payments through us, but they're actually able to use those payments and then reconcile those payments, get their tax invoicing done, right? Helping them understand what analytics they need for their business. A lot of these are small merchants. A lot of these are Kirana stores or Moment Pop stores who wouldn't otherwise be able to do this. And that's all I had. Any questions? Everybody's still awake. Thank you. Thank you.