When you look at services like Square, you feel very optimistic and good at the future. But then you get this feeling, how can this service work in developing countries like India or Nigeria etc.? The potential of services like this are immense in India, however there are some practical concerns for a service like Square to start operating in India. So Square's India entry strategy should consider having the following points in mind:
1. 90% of India's 740mn mobile subscribers use a basic phone.
2. 70% of mobile subscribers in India use their phone only for talking and short messages.
3. 14mn is the total size of smart phones at the moment though its growing at 30% y-o-y.
4. Only 20% of urban mobile subscribers use m-banking. Though mobile banking transactions are even lower.
5. 40% of mobile subscribers in rural India are illiterate therefore regional language IVR services fare well compared to text based services.
6. 50% people living in rural town don't have access to bank account. Having a credit or debit card is still a distant dream and a luxury in life.
So how does Square overcome these barriers to enter India? This size of the market is phenomenal and growth potential is unimaginable. What are the changes that needs to be done on Square to make it India specific? Can Square tie-up with all the small mom-pop stores for cashless transaction? Can Square drive change in the buying behavior of small town Indian people? Can Square partner with local Indian banks to distribute it card readers to its bank customers?
These are very real and practical questions that needs to be answered. Innovation can often break barriers. India can become a hot seat for micro-innovations like this only if the banking sector had a long term vision of the future and took meaningful steps to make the changes take place for the betterment of people.
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