Digital Platforms and Data Monetization

FTMBA, Trimester 4, 2022-23

Case Analysis
Jiomoney m-wallet: A cure for the digital economy?

Submitted By: Group 9

Name SAP ID Roll No.

G Vamshi 80512100934 D012
Vishwanath Chinniah kannan 80512100695 D039
Siddharth Kedarnath 80512100468 D042
Tejas Yadav 80512100368 D048
Sirnam Priyanka 80512100083 D058
Meghana Reddy Muppidi 80512100572 A025

Faculty: Dr. Mukund Prasad

Company background of Reliance Jio:
• Jio was founded in 2007 as a Reliance Industries subsidiary. Mumbai-based Jio
changed its name in January 2013.Reserve Bank of India granted Jio a payments bank
licence in August 2015. (RBI).
• Jio Payments Bank, a joint venture with India's largest public sector bank, SBI,
received the licence. SBI has over 13,000 branches and five affiliate banks throughout
India.
• Jio bought an 1800MHz spectrum that covered 14 local calling zones and a 2300MHz
spectrum that crossed 22 circles.
• The spectrums might provide 4G to the underserved Indian market. Jio aimed to
leverage cutting-edge technology to deliver high-quality digital content, apps, and
services. Jio was the only operator in India to deploy low-power, high-range spectrum
for IoT devices like industrial lights and metering.
• JioMoney was introduced alongside its 4G LTE network in May 2016.
• The firm wasn't profitable, but its finances were improving.
• Jio's 4G welcome offer debuted on September 5.
• Until December 31, 2016, the firm offered free phone, data, and video. The offer was
extended till March 2017. The telecom project cost the corporation $12.5 billion.

What is m- wallet?
• An m-wallet is a mobile payment service that allows users to send and receive money.
According to their nature and ownership, m-wallets were categorised. m-wallets are
closed, semi-closed, open, and semi-open. 28 Closed m-wallets were confined to
buying products and services (making payments) or obtaining refunds from the same
firm, such as Flipkart Pvt. Ltd. and Jabong.com. E-wallets that were closed didn't
allow cash withdrawals. Money could be loaded into a semi-closed m-wallet and used
to make payments, but cash withdrawals and redemptions were not allowed. Financial
services might be provided in mentioned places. Paytm and JioMoney were semi-
closed m-wallets.
• Open m-wallets allowed money to be loaded for purchases and cash withdrawals at
ATMs. Masterpass was an open wallet system that operated with a Mastercard
account. Visa has a similar m-wallet system like Apple Pay for smartphones. RuPay
included 600 multinational, regional, and local banks in India. Semi-open m-wallets
enable users transact with merchants in the wallet's network. Airtel Money, Axis
Bank, and Visa pre-paid gift cards are semi-open m-wallets. Users couldn't withdraw
cash from a semi-open m-wallet.
• Digital wallets might be owned by a bank, telco, device, or technology. Bank m-
wallets may be used to pay for different services. The SBI mobile wallet was SBI
Buddy. M-wallets held by telecoms were meant for their users and could be used for
contractual services, such as Airtel Money. Device resident applications and
technology apps ran on the mobile device. Device resident applications, like Apple
Pay, were incorporated into mobile devices, whereas technology m-wallets were
operating system or third-party apps that could be installed. m-wallet Paytm was a
third-party technology.
Jiomoney m-wallet:
• JioMoney was a telco-based, semi-closed m-wallet for paying for products and
services. JioMoney allows clients to do low-value and high-volume digital
transactions, such as person-to-person and person-to-merchant money transfers, bill
and utility payments, mobile and DTH service recharges, media and entertainment
purchases, toll and transit payments, and online shopping payments. JioMoney was
accessible for iOS and Android. Powered by 4G small cell technology—low-powered
nodes that access radio waves over short distances—the JioMoney app offers a
platform for safe digital payments.
• JioMoney let customers immediately pay vendors. JioMoney Merchant Solutions,
released on December 5, 2016, allows merchants to accept payments straight into
their bank accounts. Merchants may also pay suppliers, transfer money, and use a
digital petty cash account. JioMoney aimed to introduce India's rural people to digital
commerce. The corporation targeted 10 million merchants in 17,000 cities and
400,000 villages.

Challenges:
• The RBI managed India's monetary system. RBI licenced various m-wallets. So many
rivals made it tough for m-wallet startups to acquire and maintain clients and
merchants. Slim profit margins hardly covered merchant partnerships and customer
retention. Lack of compatibility was another m-wallet concern. M-wallets in India
couldn't traverse systems, unlike ATMs.
• Poor or failing connectivity hampered infrastructure. Weak mobile network caused
stopped payments and failed connections. A big portion of the target audience was
tech-phobic. Consumers and merchants didn't understand or trust m-wallets. Mobile
money security was also a concern. RBI rules urged mobile banking service providers
to follow KYC procedures to avoid money laundering and terrorism funding. Low
limits per transaction restricted business-to-business payments, which regularly
surpassed the limit. In distant and rural India, a large population still lacked bank
accounts.
Opportunities:
• RBI regulated and controlled India's monetary system. Many m-wallet services had
RBI licences. Many rivals in the m-wallet sector made it challenging to recruit and
maintain clients and merchants. Profit margins barely met the expense of working
with merchants and keeping consumers. Interoperability was another issue for m-
wallet firms. Unlike India's ATMs, m-wallets didn't cross systems.
• Infrastructure deficiencies included weak or failing connection. Poor mobile network
service blocked payments and broke connections. Further, a major portion of the
target audience was not tech-savvy. Therefore, customers and merchants didn't trust
the m-wallet system. Security was an issue for mobile money services. RBI rules
urged mobile banking service providers to adhere to KYC procedures to avoid money
laundering and terrorism financing. The amount that could be deposited or spent using
an m-wallet was minimal, and the transaction limit impeded business-to-business
payments. A large population in rural India still lacks a bank account.

Steps Jiomoney can take moving forward:

• Since learning is important step in adoption of m-wallets, Jio can launch phase wise
learning classes which help the rural population learn how to use m-wallets.
• Launch low cost smartphones which facilitate the usage more easy, this helps
Jiomoney to penetrate into the rural market.
• Collaborate with major players in the market to leverage the technology that each
other have which helps to develop good infrastructure and better quality products and
services for the customers.
• Tie up with major e-commerce sites and provide discounts on using jio money for
these services. This helps the customers to use only jio wallet when compared to other
competitors in the market.
• Increase the user engagement through coupons, offers, joining cashbacks and all the
means to capture attention and engagement.