PhonePe payment app case: To avoid conflicts, rules of the game must be formalised now

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Published: February 17, 2017 4:12:10 AM

To avoid conflicts and compatibility issues later, the rules of the game must be formalised now

mobile-l-reuDuring the RJio roll out, there were alleged stonewalling tactics by competitors to provide connectivity, which mercifully came to an end. (Reuters)

Recently, ICICI Bank had declined to share data and connectivity with PhonePe, the payment application of Flipkart, ostensibly due to security concerns. Of course, they would also be less enthusiastic to see customers gravitate to competing payment systems, abandoning theirs. If a third party application cannot interact with systems of multiple parties to deliver a common end product, the customer will be marooned in the proprietary system of a single enterprise. During the RJio roll out, there were alleged stonewalling tactics by competitors to provide connectivity, which mercifully came to an end. When a common method of data exchange was attempted in the automotive industry, it ran into hurdles such as compatibility, exclusivity and technology before settling down.

Product or service differentiation and exclusivity is the basic theme of business and must be supported, but with some tempering, as otherwise, customers will have to endure monopolistic tyranny. How can we avoid such instances in future?

Ring-fencing customers through proprietary systems and practices is not new. IBM refused to part with the OS details of their desktop, to application providers, while Microsoft threw open its system to become the universal solution provider. Sony pioneered Betamax, a good, albeit proprietary system, only to surrender to the universal VHS format for video recorders, backed by the rest of the big boys. Blocking connectivity, interoperability and standardised systems is myopic and will be fatal at some point. What is the connection between these basics and the ICICI Bank Flipkart imbroglio?

The government is poised to digitise India. To avoid conflicts and compatibility issues later, the rules of the game to protect customer interests must be formalised now. Commercial systems must be driven end to end, by the principles of data access, connectivity, interoperability and standardisation. Information sharing must explode and for this, organisations must also become more open with their data. A few examples will highlight the issue succinctly.

While several state governments have initiated praiseworthy information portals, applications must be permitted to draw such information. These can generate comparative information such as say demographic details, educational levels or spending habits in various states. Likewise, access to IRCTC database can facilitate developers to make innovative use of railway data. For instance, applications can extract information on train movements and city traffic from IRCTC and GPS, respectively, and suggest when a person must leave for the station to receive someone. Airline and hotel bookings are based on common platforms for comparison and decision making. Abroad, third party applications aggregate varied information such as fixed deposits, shares, cash balances and the like from several Institutions, to present a unified financial picture to the user. This is not available in India. Worse, interfaces within the same Indian company are sometimes not friendly.

For instance, the customer cannot get a unified picture of dues on different services such as cell phone, broadband and voice, since they operate as separate business verticals. Often systems are designed to suit organisations rather than users. If all enterprises provide appropriate linkage to their database to app developers, a lot can be achieved.
Standardisation and simplification are vital across the board in all applications. KYC, the source of migraine, is an example. Why do different organisations inflict multiple formats on users? If, during the digital drive, more organisations such as hospitals, railways, airlines and the like also demand their own KYCs, it will be death by a thousand cuts.

Standardise and maintain this centrally as envisaged through CKYC. Airport security staff get one second to confirm that the passenger and trip details in the ticket or boarding pass are in order. Can we not print these details in the same format and location in all tags and tickets, regardless of the airline and enhance productivity and failure proofing at airports? Paranoid on standards, Germans have sort of taken the concept up to the grave. In case of death, funeral services require only the height of the deceased as this fixes everything from coffin size and type of hearse to grave dimensions and service charges.

Some actions that the government must take.
*Take the important components of the digital journey and identify areas where interoperability, connectivity, simplification and standardisation are vital.

*Set up and empower a regulatory body to form guidelines, aid these processes, work to release relevant data to app developers and rule on issues

*Encourage businesses to commonise their approach to deliver information to common customers

*Propagate the use of techniques such as EDI, to exchange data seamlessly across organisations.

* Initiate moves to beef up data security.

Business needs of security, confidentiality and exclusivity must be balanced with user needs of connectivity, interoperability and standardisation. A lot has to be done, to avoid a number of upcoming skirmishes.

The author is former chief information officer, TVS Infotech. Views are personal

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