E-cash will be a major leap for the Indian consumer

Well, it’s really very simple. Basically, it’s an ordinary card, made by Shlumberger, but with a very smart mind. Instead of a magnetic strip, you have an actual microchip containing all the data about that particular account is built into the card. All you have to do is operate the card with a unique Personal Identification Number (PIN) that gives you credit facilities as well as full security against misuse as long as you keep it to yourself. The customer has to pay an annual sum for the use of the card.

* How does that make it any different from any of the other credit cards that have flooded the market?

In the first place, E-cash is not a credit card. Here, all that you have to do is deposit any amount of money with either the company or with any of the outlets that have E-cash facilities. In return, you get the card which can then be used to make any purchase that you want. And the company will be installing Verifone terminals at its own cost at stores across Delhi, to begin with. The difference is that E-cash is essentially your own cash that you are using, unlike a credit card where the bank is lending you the money at a given interest rate. With E-cash, there’s no interest because it’s your money to being with. Also, transaction is much faster — all it takes is about 45 seconds for the whole operation. The customer will not be paid an interest on the amount deposited with us because we are not a savings bank. But there will be bonuses given for large amounts deposited with us.

* The same concept exists in the West, but it hasn’t really taken off. What makes you think it’ll work in India?

In the West, they also have something called debit cards, where the payment is taken straight from your bank account. That won’t work in India, where most transactions are in cash because banking procedures are often so cumbersome. Besides, a number of people don’t even have bank accounts. Also, in the West, credit and debit cards work better because of better online connectivity, so cash cards are low-value affairs.

Besides, E-cash cards will also double as ATM cards. That way, you can even withdraw on your card if your want to. So what we’re doing is exploiting Western technology and Indian behavioural patterns to create a niche segment. Basically, it’s a major leap into the future. But it’s also going to be a bigh challenge to make it succeed.

* How long do you think it’ll take to popularise this card?

Initially, we’re starting with Nanz-Archana stores in Delhi. Then, we’re expanding to South Delhi and other areas. But that’s because we’re based here. Eventually, we’re looking at all six metros, and then the entire country. And once we have a uniform operating standard for such terminals, we could even go global.

So, what we have on our hands is a long-gestation idea. For at least two-three years, we’ll only be building our customer base. At the end of that, I’d like to break even.

* What are the other consumer finance sectors that Escorts Finance is looking at?

As of now, our core remains automobile finance and construction equipment. But we’ve also gone into consumer durables in a small way. What we are waiting for is a Consumer Credit Reference that will be complete in about six months. The CCR will be a database of the all the defaulters on payment provided by all major banks, credit card companies and financial institutions. It’ll be a co-operative effort by everybody involved, and all of them will be able to access the database.

* Now that you’re into plastic money, do you also intend to go into the credit card segment?

Not now, no. My first priority is to make E-cash a success story. And that’ll take at least two to three years. It requires a great deal of investment and involvement. Credit cards can come later. But when we do, they’ll be compatible with the E-cash machines for better service.