Sim-Se-Pay- YES BANK TAISYS Caselet

Introduction
There was palpable excitement in the 27th floor idea-exchange meeting point in the YES BANK
Tower. YES BANKs Head of Digital Banking was engrossed in an animated discussion with
Abhishek Saxena of TAISYS. YES BANK, India fifth largest private sector bank , renowned for
its innovation focus and TAISYS, a world leader in making mobile interconnectivity had joined
hands in a bid to revolutionize the way financial inclusion was visualized in India.
The YES BANK Digital Banking team in particular seemed kicked with the idea of Sim-Se-Pay,
a TAISYS technology which was being adopted by YES BANK - a wafer-thin sticker which
when pasted to the SIM card possessed the potential to make mobile banking a reality on
feature phones without internet connections. 788 million almost 75% of Indias mobile phone
users still use feature phones- while PMJDY has made inclusion a reality, this will really
revolutionize access for the under-banked, mused Abhishek.
I.

Background: Mobile Phones Accessory to an Essential Component of Everyday

Life
The role of mobile phones has undergone a sea change in the last three decades, from a basic
communication tool to an essential component of every human interaction a flaunt device to
an omnipresent device. Reports have revealed that there has been a marked increase in user
engagement on mobile devices, with a visible decline in mobile conversations. Fig 1 clearly
highlights the rapidly evolving usage patterns in mobile devices
Category

Q4 2014
Q4 2015
Total
162649
178858
Search, Portals & Social
152248
165629
Entertainment
151864
165891
Communication
128323
148742
Productivity & Tools
127385
140857
Commerce & Shopping
109925
125968
Family & Lifestyle
72558
86179
Travel
123655
137225
News & Information
121446
132635
Finance
96079
102899
Home & Fashion
30284
52405
Fig 1: Evolution of Mobile Phone Usage Around the World
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% Change
10%
9%
9%
16%
11%
15%
19%
11%
9%
7%
73%

However, this evolution has been far from uniform across the world the mobile phone still
plays a vastly different role in the rural areas of developing countries from technology hubs like
Tokyo, Berlin and New York
Developed markets, usually see a smart phone penetration in excess of 50%, often rising to 60%
in key urban centers. However, in emerging economies like India and Brazil, owing to various
factors like internet connectivity feature phones still dominate the market with more than 70%
presence. Despite its remarkably large smartphone base and huge growth in local smartphone
manufacturers, India and China still have a dominant feature phone market due to the
cumulative cost of operating a smartphone.
900
788

800
700
600
500
400
300

233

200
100
0
Smart Phones

Feature Phones

Fig 2: Mobile Phone Penetration in India: Smart vs Feature Phones (in millions): TRAI April 2016
A. The Rural Urban Divide: Widening the Chasm
As per TRAI, rural mobile internet users have grown a staggering 93% from December 14
January 2016. However, this masks the fact that only 9% of rural India has access to mobile
internet. Out of the 378 million mobile internet users, only 103 million are from rural
households.
Increased internet access, emergence of smarter devices and better data plans has created an
enabling environment for the rapid rise in the usage of mobile internet though majorly in urban
centers. Given the significant difference in the access to mobile internet technology which
forms the core of a truly smart phone the mobile usage habits also vary widely in rural and
urban India.
An insight from a report published by IAMAI states,We have found that rural users do not like
to keep their data services on at all times. They prefer to use it to download videos and then opt

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for offline viewing. A massive nod for this observation came when Video search engine
YouTube launched its offline feature exclusively for India.
B. Usage Patterns Rural vs Urban
Urban
80% of the 219 million urban mobile internet users, online communication was the top
reason for accessing the internet on their devices.
Entertainment was top priority for only 30% of these users.
Rural
52% said their primary reason for accessing the internet was entertainment.
Communication and social networking stood at 37% and 39% respectively.
The report, Mobile Internet in India 2015, surveyed individuals from 35 Indian cities and
towns, and found significant differences in rural and urban user behavior on mobile internet.
II.
Mobile Phone: Preferred Mode of Banking Transactions
The rising reach of mobile internet has redefined banking and other financial transactions
globally. In 2015, 39% of all mobile phone users with a bank account globally, have used mobile
banking a 10% rise in two years. While basic banking transactions like checking balance and
account transfer still dominate usage of mobile banking, enabling regulatory reforms and the
disruptive technology innovations have seen the emergence of mobile only banks like ATOM.
A. The India Scenario
The Smartphone revolution has had a massive impact on the psyche of Indians as well. Number
of mobile banking transactions has almost doubled to 265 million in 2016 from 98 million in
2014-15. Such has been the pace of growth that mobile based transactions like mobile wallet and
m-banking are predicted to soon outstrip cheque payments (currently mobile based transaction
add up to 602 million which is only slightly behind the 723 million cheques cleared during April
Nov 2015).
The meteoric rise of e-commerce websites and online shopping has also played a pivotal role in
altering buyer behavior from scan online and shop offline to both scan and shop online.
Online shopping spends have increased by more than 50% year on year from 2014 2016. In
this financial year, mobile wallets have overtaken mobile banking in number of transactions.
From online payment to taxi aggregators like Uber and Ola to phone recharges the value of
mobile wallet transactions has almost tripled to 400 million from April November 2015.

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MOBILE BANKING TRANSACTIONS IN

INDIA
500000000
450000000
400000000
350000000
300000000
250000000

200000000
150000000
100000000
50000000
0
Volume in Aug 2015

Volume in Jan 2016

Value in Aug 2015

Value in Jan 2016

Fig 5: Mobile Banking Transactions in India: Source TRAI

However, this is only a facet of the entire story. Owing to various factors like enabling
environment for manufacturers to lowering cost per unit, mobile phone penetration in India
stands at an admirable 75% with over 900 million mobile phone connections in the country.
Interestingly, this is somewhat higher than the number of active bank accounts in the country.
More than 75% of this though is still feature phones, and even more significant is the fact that
only 70% of the smart phones have active data connections.
While connected smart phones form the fulcrum of the future of financial transactions through
various mobile apps, which will lead to self enablement and a fillip to banking, payments and a
myriad of digital financial services, this is barely the tip of the iceberg. The majority of the
population remains at the cusp of a revolution and not immersed in it due to:
1)
2)
3)
4)
5)

Limited percentage of Smart Phones

Less data connectivity enabled Smart Phones
Security concerns of the consumers
Patchy internet connectivity on Smart Phones
Cost of doing transactions to the consumers

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B. Mobile security concerns

Smartphones popularity and relatively lax security have made them attractive targets for
attackers. The number and sophistication of attacks on mobile phones is increasing, and
countermeasures are slow to catch up. Smartphones and personal digital assistants (PDAs) give
users mobile access to email, the internet, GPS navigation, and many other applications.
However, smartphone security has not kept pace with traditional computer security. Technical
security measures, such as firewalls, antivirus, and encryption, are uncommon on mobile
phones, and mobile phone operating systems are not updated as frequently as those on
personal computers. Mobile social networking applications sometimes lack the detailed privacy
controls of their PC counterparts. Unfortunately, many smartphone users do not recognize
these security shortcomings. Many users fail to enable the security software that comes with
their phones, and they believe that surfing the internet on their phones is as safe as or safer than
surfing on their computers.
III.

YES BANK TAISYS Sim Se Pay: Creating a Truly Smart Device

The high concentration of volume and value of m-transactions in metros and big cities has
widened the digital divide. This presents a great opportunity - Mobile technology, with its
capacity to reduce transaction costs, is key to enabling the large volume low-ticket transaction
that is at the center of financial inclusion. YES BANK , a leader in the BFSI sector in innovation
and digital banking sought to seize this opportunity to transform the lives of the underbanked. While smartphones lay at the epicentre of mobile banking and has been leveraged by
all BFSI organizations, YES BANK clearly saw a huge and untapped opportunity to be
leveraged by focusing on feature phones which form almost 75% of the total mobile phone
users in India.
Joining hands with TAISYS, a world leader in making mobile interconnectivity and innovation,
YES BANK has introduced a pioneering innovation which has the potential to significantly alter
the contours of the payment industry in India Sim Se Pay.
A. YES BANK Sim-Se-Pay
The YES PAYMENTS SIM Sleeve is a wafer-thin sticker which can be stuck on any type of SIM
card of any Telco service provider Standard, Micro and Nano. This sticker installs a Sim Tool
Kit (STK) based app which can be accessed by the consumer on ANY mobile phone without the
need for internet connectivity. This YES PAYMENTS wafer is linked to a Prepaid Wallet which
can be loaded by the consumer to perform various types of transactions. The transactions are
performed using a patented encrypted SMS technology to communicate with the servers of the
Bank. Following are the transactions currently offered in the program:
1.
2.
3.
4.
5.

Person to Person (P2P) fund transfers

Person to Account (P2A) fund transfers using NEFT and IMPS
Check balances
Check last few transactions
Payments to anyone using a mobile number
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6. Payments to merchant for small and large value purchases

7. Payment of bills; top-ups, recharges, etc.

Fig 3: Process of Using SIM Sleeve

This innovation is set to revolutionize the way mobile banking has been viewed in India. By
enabling mobile banking on feature phones, the Sim-Se-Pay device might truly be the key to
unlocking the under-banked puzzle.
However, to truly be a sustained game-changer, the SIM Sleeve solution has to move beyond
simple and basic banking solutions. Seated in YES BANKs HO in Mumbai, Ritesh, Abhishek
and their teams had been brainstorming on the idea in a marathon discussion. A quick glance
on the white board revealed the following:

Fig 5: Current and Prospective Transactions through Sim-Se-Pay

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From ATM withdrawals to usage of the device as POS to Value added services like insurance
payments, bill pay and phone re-charge the teams had clearly mapped out the future roadmap.
However, the discussion was far from over, several other ideas were being tossed around. YES
BANK strategy team felt it was critical to first make the technology available in vernacular
languages. The underbanked population in a country like India can never be satisfactorily
targeted using an English language app we must look at vernacular options, mused Aseem,
the banks digital banking head.
With several ideas coming in the organizations decided to form an Innovation Committee to
chart the roadmap for this path-breaking innovation.
IV.
Challenge for the TAISYS YES BANK Innovation TEAM
As a key member of the Innovation Team, you have a defining role to play to take the Sim
Sleeve solution to the next level. Provide suggestions for covering the cost of the SIM while
ensuring that this cost does not prove to be a hindrance in its mass adoption. You have a thirty
day period to share a strategic roadmap focusing on
1. Increasing commercial usages of the SIM Sleeve, including but not limited to
a. Related to e-commerce in Rural markets
b. Valued Added services to ensure that all essential services available on a
smartphone can be included in a feature phone
c. Disruptive financial solutions that can be offered on the SIM
2. Increasing Socio-commercial usages of the product, including but not limited to
a. Providing greater information access to users on Government subsidies as well
as access to the actual subsidy
b. Enable direct digital marketing/sales by rural/semi urban self-help groups
c. Weather forecasting to help occupations distinctly affected by the vagaries of
weather like agriculture, fishing etc.
3. Basis the innovations suggested by you in 1 & 2 , develop a comprehensive Marketing
Strategy to counter the challenge posed by increase in smartphone adoption and
popularize the SIM Sleeve technology in target market
a. Please ensure that the Marketing strategy is directed at the target group
b. Outline an annual plan with a defined marketing budget for approval of the
YES BANK Chief Marketing Officer

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Exhibit 1: Global Smartphone Connection and Adoption: Source GSMA Intelligence

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Exhibit 2: Online Spending Patterns India: Source RBI Payment System Indicators

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Exhibit 3: Operation Details of SIM Sleeve

Once there attached the application is ready to use. No need to Download Application. The
Wafer SIM provides Plug & Play facility. The Application will be made available as soon as
Phone is Switched On.
For all operations that a user undertakes, the SIMoME formulates a single message packet
including the user PIN for the transaction, encrypts it and sends as an encrypted SMS to Taisys
Server
At the Taisys server the message is decrypted and sent to appropriate API (Core banking/Bill
Payment/Honest fund Transfer etc) for a response.
Once the Bank provides response, the Taisys server encrypts the same and sends to the user to
be decrypted by SIMoME at his phone

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