MPower is a proposed intelligent hybrid wallet and micro-blockchain platform that aims to drive financial inclusion in India. It would take advantage of the opportunity to develop new technology-based solutions to address the financial exclusion experienced by many Indians, like Nikki, a single mother struggling with little savings and access to funds. MPower would provide services like P2P payments between family and friends, government payments, and purchases through a hybrid wallet and permissioned local blockchains integrated with identity systems like Aadhaar, while working with the government and banks in a collaborative partnership.

1. MPower: An intelligence-based Hybrid Wallet and Micro-Blockchain
Platform
MIT Fintech certificate course: Future Commerce
STRATEGIC ROADMAP
RANDOLPH, Priya | CHEUNG, David | TUREL, Kaiwan | FREIRE,
Marusa | CHOUDHURY, Partho

3. The story of Nikki
Nikki is a single mother in rural India with two children. She is
living day-to-day with little savings and she worries whether she
can continue to give her children a better life through education.
To make ends meet, she is supported by her brother who transfers
money to her on a monthly basis and also from welfare payments.
As there is no easy way to access these funds, she has to walk
alongside dusty and busy roads until she can arrive at a Bank
correspondent agent, who charges a large commission so she can
finally withdraw the cash.
Like other members in her community, she has no financial records, cannot access microfinance. So
unless other channels open up to her, she will continue to struggle and worry about the future and that
she can consistently provide for her family.
McKinsey Global Institute estimates that Indians, who live like Nikki, lose more than $2 billion a year
in foregone income simply because of the time it takes travelling to and from a bank.
The Story of Nikki

4. Credit
Information
Systems
Collateral &
Secured
Transactions
Systems
Retail
Payments,
Remittances
(P2P) & Cash
Transfers
(G2P)
Savings
solutions
360⁰ financial
visibility
Low-Cost, No-
Frills Accounts
& Online
Marketplaces
Our solution, MPower, will take advantage of the opportunity to develop and experiment new
technology-based solutions to address and directly improve the lives of the financially excluded.
There is a new openness and
demand for solutions
to empower financially
excluded people like Nikki
and to move them out of
poverty
Regulators and policy makers see
the opportunities and want to
familiarize themselves with the
risk profiles of technology-
enabled financial services
A collaborative partnership with the Government and Banks will undoubtedly help India to achieve its ambitious
Universal Financial Access goals, while empowering people, like Nikki to move out of poverty.
!MPower

6. This report provides in-depth analysis for the creation of MPower - an intelligent-based Hybrid Wallet
and Micro-blockchain Platform that drives Financial Inclusion
Bottom-up approach
Fragmented solutions. Small disconnected
communities. Micro finance. Cash-based
economy, reliance on branches
Problem-first methodology
Addressing immediate problems only like lending
and purchases.
Business and Infrastructure-focus
Micro-Finance Institutes imposed the rules and
absorbed risks. Minimal customer-experience
focus.
Top-down approach
Address the solution at a universal scale with a
broader reach.
Customer-drive, Solution-first
methodology
Iterative customer-centric design using Hybrid
Wallets and Permissioned Local Blockchains for
Banks/ MFI.
Technology-focus
Blockchain for Financial Inclusion to disrupt
existing policies and infrastructure of transacting
and integration with Government services.
IMPORTANT ELEMENTS COVERED IN THIS REPORT IMPORTANT ELEMENTS NOT COVERED IN THIS REPORT
1. This report touches upon 3 different use cases to
demonstrate the significance of a solution like MPower.
2. This report explains the regulatory aspects, its limitation and
recommended changes needed to policies, from an Indian
regulatory context.
3. This report presents a business case for Government, Banks
and MFI to uptake the solution by highlighting the benefits to
them
1. While this research can include use cases for countries other
than India, this report does not cover those in the research
itself.
2. This report does not cover regulatory aspects from countries
other than India.
3. This report does not cover the technical requirements of the
solution whose design is explained.
As part of delivering this
solution, we will
undertake a Plan – Do –
Review approach to
iterate and strengthen our
solution for all
stakeholders.

7. `
Rationale behind the currently designed Approach
A brief summary of the Whys and Hows of the MPower integrated solution and research methodology
(Universal Platform - Localized Micro-blockchains extensible to a network of interconnected chains - Data for Social Good)
The Why The How
Financial
Inclusion
Zero Cost
and Micro
transactions
Benefits
to the
poor
Regulation
Financial
Inclusion
Zero Cost and
Micro
transactions
Benefits
to the
poor
Regulation
1. Digital Transactions are not conducive
to Micropayments
2. Infrastructure prevents supporting
Digital Transactions for the Under-
banked
1. Cash economy denies them even
basic benefits like low cost of
goods, better living
2. No platform available for brands to
discover customers at this segment
1. Not conducive for the lower segment
2. Current policies universally applicable to all
payments
1. Hundreds of Millions Still Unbanked
2. The Government Of India is trying hard to
provide Financial Inclusion using the Jan
Dhan and Aadhaar services.
1. Digital payment method as easy as cash
transactions.
2. Support for using these accounts and the Aadhaar in
digital transactions and Micro payments.
1. Hybrid wallet common to all banks
2. Permissioned blockchain for zero
cost transactions
1. Digital Inclusion provides them their
first financial footprint
2. Customer discovery platform for
Merchants, Brands and Lending
Institutes
1. Proposal to introduce qualifying clauses
to the current regulation
2. Hybrid wallet license exclusively to be
used for the lower economic strata
!MPower !MPower

9. The Global Context
As extending access to finance to some of 2 billion working-age adults globally is the first building block to build
a better life, the World Bank Group set a goal of achieving Universal Financial Access (UFA) by 2020.
• The UFA goal was explicitly defined as “universal ownership of a store-of-value transaction account”.
• Based on the specific circumstance of each country, G20 members aim at taking concrete actions to
promote digital financial inclusion at their own country level.
• India has committed itself to reach 20.6% of the world’s unbanked people.
• It is crucial in India that the policy makers designing financial inclusion, G2P, and electronic governance
have a regular dialogue at the federal and state levels, and leverage resources, to make the channel
more viable.
The Indian Goals
India has ambitious goals to deliver electronic welfare payments, banking services and digital local government
services to each of its 638,000 villages
• Economic development is usually a long journey and digital financial solutions can radically speed the
progress at a relatively affordable cost.
• The challenge in the next five years will be to build a robust digital infrastructure that can reach every
remote village in India as well as a system that is transparent, eliminates leakage and corruption, and
provides a range of services.
• To face this challenge, India has launched new payment banks to bring innovation to the market and has
dispensed licenses to a range of fintech companies, telecoms firms, and even the local postal service.

10. Current pain points in the areas of Payments
Current
Pain
points1
Lack of
timely
banking
services
Long,
unwieldy
process to
access funds
Low
penetration
for saving
accounts
Untapped
channels
Low access to
credit in rural
areas
1. Reserve Bank of India, 28 Dec 2015, “Report of the Committee on Medium-term Path on Financial Inclusion”, Accessed on 11th November 2016, https://rbi.org.in/scripts/PublicationReportDetails.aspx?ID=836
61% rural
credit through
moneylenders
and family
Only 3% receive
wages directly into
account
Less than 10% receive
government transfers
High amount, but low
skills Banking
Consultants
59% of all
households possess a
mobile phone
Rollout of national
identify schemes
(Aaadhar, Pan)
Only 300 basic
accounts per
1000
population
Nearly 35% of
all accounts have
a zero balance
Inability to provide
decentralised
banking services
There is a definite opportunity to solve the problem of providing access to real-time payments for the Financially
excluded in India as shown in the current pain points

11. through our Iterative and Structured
approach to Use Cases
Plan
Do
● Define Use cases and high level interaction flows
with users
● Identify market, ARPU, and LLTV per use case
● Identify challenges and potential mitigation
strategies
● Confirm strategy and pivot as required
● Develop wireframes and test
concepts with targeted customers
● Engage and discuss with regulators to
test ideas
● Evaluate potential of
use case and pivot as
required
● Review feedback
from customers and
regulators to include
in next iteration
Use Case 1:
P2P payments
between
family
members and
friends
Use Case 2:
Government
payments and
Employee
wage
payments
Use Case 3:
Purchase for
Goods &
Services
Enabling
Technology
Blockchain as
ledger for
user financial
transactions
Enabling
Technology
API integration
with Aaadhar
and PAN for
authentication
Enabling
Technology
SMS
communication
MPower will address each of
these pain points

12. USE CASE 1 – P2P transfers between Friends and Family
• 16 Million rural households receive remittances
• Average remittance per receipt is INR 16k (USD 240)
• Each sender sends an average of INR 13k (USD 194) per transfer
• Total number of senders: U-R=19.6 M, U-U=2.7 M
• Total contribution to GDP is USD 10 B (0.5% of GDP)
• 10% leakage is typical in traditional remittance systems in
existence today
1. India has one of the largest domestic migrant (inter-state)
populations in the world (30% of total)
2. Flows are heavily seasonal, especially between states that
are heavily dependent on farming labor and those with
arid/semi-arid topographies
3. Urban-Rural and Urban-Urban are the major flows; Rural-
Rural and Rural-Urban flows are minimal
4. Government focus and state support is primarily focused
towards external inflows, and domestic flows have
historically been ignored
• Mostly impacts the poor, lower caste/strata of society,
and less educated sections
• Primary usage of domestic remittances is:
• Consumer spending (55%)
• Education and healthcare (14%)
• Housing (10%)
• Debt repayments and entrepreneurial activities (15%)
• Savings (6%)
• Domestic inflows have a very critical impact on disposable
income and food security within the rural hinterland
RTGS
NEFT
IMPS
Relevant Information

13. Benefits
• Predictable transaction costs benefit both the operator and the
beneficiary – leads to better financial planning for the end
beneficiaries
• Turnaround times are greatly reduced – the need for planning
remittance scheduling to sync with pay cycles and event triggers
is largely eliminated
• Due to absence of physical middlemen, pilferage and corruption
is largely eliminated
• Instant confirmations on personal handhelds/mobiles ensure
greater transparency and trust
• No artificial constraints on daily transaction volume or ticket size
mean that demand for this service does not have an upper
ceiling
• Helps improve cash flows within micro-economies (family/friend
circles)
Control transaction costs, increase transaction velocity and eliminate transaction leakage to improve the
earning power of the beneficiary
Implementation Challenges
• Educating the target population would be time
consuming and slow down the pace of uptake
• Interoperability across competing operators
• Target population is a highly sensitive
demographic for regulators and policy makers,
making them more risk averse than usual
• Current regulatory vacuum implies that the tide
could swing either ways once rules and regulations
firm up
• Scaling up the ecosystem of participating agencies
could be time-consuming and fraught with
roadblocks not yet articulated herein
USE CASE 1 – P2P transfers between Friends and Family

14. Market Players
- Central Government
- State Governments
- Banks
- Department of Post
- Nonbanks (MNOs)
- Banking correspondent companies (BCNMs)
Relevant information
• The Annual financial flow through
informal instruments was between
75 percent and 330 percent of the
average household income.
• An electronic platform for G2P and
P2G payments could save around
USD 22.4 billion a year – almost 10
per cent of the total payment flows
between the government and
households.
Current Situation from Nikki’s
perspective
Image Source:
S. Banerjee. S. Rotman. S. Rana. (2014)
The Current situation’s pain points
No FI progress
Digital cash transfers although is offering
movement but no mensurable effective
progress in terms of Financial Inclusion (FI)
Inefficiency
At least 16 million G2P accounts are being
used only for one transaction a month to
disburse G2P payments.
Fraud
Risks of fraud, diversion of benefits to
unintended individuals, and collection of
unregulated commissions and fees.
Manual costs
Higher transaction, administrative and
overhead costs of making manual payments,
auditing and reconciliation compared to
electronic processing.
NO easy access to cash, to financial
services and also to other basic
government services.
USE CASE 2 - Government payments and employee wage payments
Digitizing India’s $100 billion subsidy machine is a massive task organized across ministries, departments, and 29 state governments

15. Future situation from Nikki’s
perspective
Image adapted from
S. Banerjee. S. Rotman. S. Rana. (2014)
Benefits
1. Enhancing the reliability of government
programmes and simultaneously
measuring the effective progress in terms
of Financial Inclusion (FI).
1. Enabling G2P digital accounts to be used
for other payment transactions like
purchase of goods and services and
remittances or payments between family
members and friends. (our use case 3)
1. Eliminating risks of fraud, diversion of
benefits to unintended individuals,
collection of unregulated commissions and
fees.
1. Lowering transaction, administrative and
overhead costs of making payments,
auditing and reconciliation.
Implementation Challenges
• Regulatory restrictions on how financial and
other organizations can enable and provide
G2P payments.
• Lack of coordination among policy experts
who design G2P payment channels and
those who design financial inclusion
programmes.
• Limited information available for risk-averse
regulators and policy makers, when
assessing the risks of new technologies and
new payments services business
models.Create incentives for multiple banks
to use this platform.
• Need of incentives to multiple stakeholders
to use the platform.
Empowered by digital access to financial
services, digital payments and electronic
government services
(feature and/or mobile phones)
USE CASE 2 - Government payments and employee wage payments
Making possible digital payments to users ‘wherever’ and ‘whenever’ they are, and improving their overall economic welfare

16. USE CASE 3 - Payment for Goods and Services
Nikki’s Monthly Expense and Challenges Faced

17. USE CASE 3 - Payment for Goods and Services
Implementation
Challenges
• Digital illiteracy
• Financial illiteracy
among users
• Requires mass scale
tick up of digital
wallets
• Changes in Regulations
permitting payments
across mobile
platforms
• Interoperability across
mobile platforms
Making possible irrefutable payments with flexibility, convenience and benefits.
TextText
TextText
Label
• Efficient cash distribution means
more cash to afford other monthly
necessities
• Time saved for Nikki instead of
travelling to withdraw cash from an
agent
• Receive financial credits for food
into designated wallet
• Provides freedom to choose
• Purchase at her own convenience
• Reduce dependency on cash –
providing more security
• Allows greater efficiency in
transferring funds, with low
transaction costs leading to
better cashflow management
• More cash available to prioritise
and support continued
education for her children
• Could lead to monthly savings
with better control over her
finances
MPower
Benefits

18. The following value propositions were identified through the in-depth examinations of three use cases
Analytics tools help carve out a beneficial proposition for government, for banks and other financial institutions, for merchants and for
customers,. And can guide their future financial decisions by assessing multiple patterns relating to their expenses.
Value proposition for Government
Measurable effective progress on financial inclusion, more efficiency and lower cost for G2P payments, no risks of fraud, no leakage.
Government payments linked to a range of other financial inclusion services that enhance long-term customer value by facilitating their
participation in a larger transacting ecosystem makes the channel more viable.
Value proposition for customers like Nikki
Universal digital access to various options of payments, ease of use, low transaction and remittances costs, improved overall consumer
experience and financial literacy training, as predictive analytics can develop propositions and financial advice around the management of
household expenditures, investment and savings advice. For customers, the real value of a digital channel may emerge if several financial
inclusion services are bundled and integrated in the same digital access channel. By making the provision of financial services more efficient,
technology can allow services to become affordable to users, which in turn allows more users to participate.
Value proposition for banks and financial institutions
Improved ability to offer targeted products that are relevant to the customers, developing tailor-made and add-on products specific to the
requirement, once technology-enabled business model will empower the formal financial sector to more easily and efficiently reach
disadvantaged Indian households.
Value proposition for merchants
Reduction on the cost of cash management refers to the cost nonfinancial merchants incur when receiving, handling, and processing cash
payments. Digital payments also lead to simple records, reports and analytics on their business; basic customer relationship management,
including offers and loyalty schemes; and credit scoring for formal working capital. Better interest rates for small business owners that are still
relying on cash transactions and on unorganized sources for financing their daily working capital at extremely high rates of interest

19. The Competitive Analysis
Type of assessment
Comparative analysis of four key players in the Indian
market
Model used
Convergence of Business Model and Ten Types
Innovation.
Summary of findings
● Similar me-too propositions amongst Vodafone,
Airtel and PayZapp - with similar product
feature and performance.
● PayTM most disruptive in market with
strengths in overall configuration. However,
currently focussed on users with Smartphone -
thus limiting its ability to access financially
excluded.
● Profit models very similar (small transaction fee
dependent on size).
● Lack of a player that is focussing on the overall
Experience and Profit Model for the financially
excluded market.

20. The Macro-environmental factors conclude that there is indeed a pressing need for MPower to create a ubiquitous affordable digital
transactions channel for the lower half of the pyramid, leading to benefits of a digital footprint, and better finances. MPower will provide
national (and global) policy makers with a clear approach to address the gaps in the current models of digital financial services for the poor.
Notation : 100 = neutral, >100=positive viable, <100=more risks than opportunity.
As seen, Political and Legal aspects can pose risks to this model and it is
imperative to gain the support of Regulation. MPower is economically viable
and will sustain amidst current and future environmental, socio and
technological factors.
In summary, the MPower must be:
1. A business model that is flexible to adapt to changes in the
macro environment.
2. Developed as a framework that can be seamlessly absorbed
by incumbents for implementing digital transactions.
3. Built to connect as many banks as possible to make access
to payments ubiquitous for all.
4. Created as an extensible model to adapt to new
technologies in payments and authentication for digital
transactions of the future.
5. Simple and Improve access channels for those already
served by banks and other financial institutions.
The Analysis uses the STEEPLE framework to research the macro
economic factors governing the viability of MPower.
Weighing the Challenges and Opportunities presented by each of the
factors in the STEEPLE framework, we arrived at a score that determined
the positive viability of the MPower placed amidst the given Macro-
economic conditions.
The Macro Environment Analysis

21. Social Technological Economic Environmental Political Legal Ethical
• Universal ID
being rolled out
• Feature phones
still popular
• Blockchain as
an enabler for
trusted
transactions
• High migration
from rural to
urban
• Interaction
through mobile
devices
becoming key
enabler.
• Data
sovereignty is
key and should
be used for
social good.
• Focus on
reducing
corruption
• Real GDP
growth in India
• Infrastructure
investment from
India key driver
behind growth
• Interest rate
steadily falling
since 2012
• Greater share of
wallet with youth
and Millenials
• India accounts
for 5.8% of all
global
greenhouse
emissions
• Policies for digital
transactions not
suited for
financially
excluded
• Customer privacy
and security is
critical
• Barriers to entry
to provide
payment
services
• Financial
inclusion is a
initiative
Key Success Criteria for MPower
Collaboration with
Governments and
Banks
Integration with
Customer
Authentication
Simple and intuitive
user experience
Security and
Privacy via
Blockchain
Accessible to all
via feature and
smartphones
The Macro Environment Analysis Summary
Key Area of
Opportunity
Key Area of
ThreatLegend

22. Impact of the Environmental Analysis on MPower’s Strategic positioning
MPower’s
Strategic
Positioning
Differentiate
on a simple
and intuitive
Customer
Experience
Maintain
Product System
and
Performance as
per
competitors
Differentiate
on Servicing
Help
incumbents
achieve
Financial
Inclusion
targets
Target white
space of feature
phones
Based on our analysis of the macro-economic environment and the competitors within India, we have identified a
number of key areas that MPower needs to focus on with respect to its strategic positioning.
Create a
parallel model
while pressing
for Regulation
and Policy
change
Be an
extensible
framework that
incumbents
can plug into.
Combine
Analytics with
transactions to
create Data for
Social good.
Innovate in
Marketing
methods,
Customer
Retention

24. Our three use cases will provide an ecosystem of revenue streams to build the case for MPower
(facilitated by Localized Micro-blockchain)
2% administrative
fee from the government program
and employers to distribute
payments
Alternate Stream of Revenue
Monetizing data and third parties
access to provide use-cases
0.05% Transaction
fee on remittances
MPower would pay facilitators an upfront
commission within the local localized Micro-
blockchain, as an incentive, to acquire customers
and merchants acceptance
0.05% Transaction
fee from merchants -
with more than 20
transactions a month

25. Financial Modelling and Market Segmentation
Customer Acquisition Costs
Since MPower is a further-out model, we use the competitor PayTM’s CAC and make a broad assumption that our Cost will be 2x this number,
given factors like Inflation, Increase in acquiring existing competitor customers and the like. The CAC is factored into the Revenue model to
arrive at profitability. The CAC unlike other models will rise steadily for atleast 6 years. It is said to stabilize after the 6th year onwards when a
complete eco-system of merchants and businesses shall have been established.
Life Time Value of a Customer
G2P payments being our biggest revenue stream, our main customer is the Government. The Lifetime Value of the Customer is thus to be
calculated not on the basis of frequency of payments, but the retention strategy we employ and the profitability we bring to the Government.
Our revenue model projects a probable 4% profit to the Government in its G2P disbursements by employing the MPower system.
Market segmentation
Over a period of 6 years, and starting with a 0.10% share, we strive to capture a
10% market share in each of our 3 streams:
1. G2P – Total G2P disbursals nationwide
2. Domestic Rural remittances
a. Formal channel
b. 1% of the informal channel
3. P2M transactions – Transactions nationwide in Kirana stores.
The graph shows our growing market share over the next 6 years.

26. Revenue Model
Key assumptions
● 5 major revenue streams
● 2 major cost drivers
● G2P Disbursals is the
primary driver for growth
in the immediate term
● P2M and P2P streams are
expected to exploit the
network effect in the
medium term
● Revenue item = current
market size estimate *
market capture
expectation * TDR
● Different revenue
streams have varying
growth rates
Year 1 Year 2 Year 3 Year 4 Year 5 Year 6
MPower

27. Sensitivity Analysis
To help understand the key drivers of the overall revenue model for MPower, a sensitivity analysis
has been conducted to show the impact over a 5 year horizon
Sensitivity Analysis - Potential Revenue over five years (in
USD millions)
baseline
$USmillions
Key Variables adjusted
● Commission Fees (change in variability
per use case)
● Market Size (i.e feature phone usage,
financially excluded)
● Market Share
Variable range
● Tested +/- 50% range, based on a
permutation of variables above.
Analysis of findings
Revenue increases more exponentially with
increase in variables, compared to decrease
in variables.
Upper range
Lower range
Legend

29. Competitors are
currently focussing
on smartphones
capability which
limits their ability to
reach the financially
excluded. MPower
needs to be device
agnostic.
With restrictive
regulation create
barriers of entry to
accelerate this process,
and a closing window
of opportunity,
collaboration is key
In support of
government drivers,
aligning our solution
with their Aadhar
initiative will gain buy
in as well as help
achieve KYC
requirements
With the high
likelihood that the end
user will be financially
illiterate, the user
experience is critical to
achieve take up and
scale
To address political
and legal concerns,
usage of blockchain
and other enabling
technologies will
provide the security
required to satisfy
regulators and the end
customer
Key Success Criteria for MPower
Collaboration with
Governments and
Banks
Integration with
Customer
Authentication
Simple and intuitive
user experience
Security and
Privacy via
Blockchain
Accessible to all
via feature and
smartphones
Based on our analysis of our three use cases, environmental analysis and financial modelling, we
need to be successful across five factors

30. Acquiring a critical mass of customers will be a key factor for the
success of MPower. This would be achieved by connecting the dots in
the village economy.
A ubiquitous merchant acceptance infrastructure is essential for
achieving the long-term sustainability. This would be achieved by
incentivizing customers and merchants to accept MPower payments
BCNMs, CSP, Non Bank Players, Local Self-Governments, NGOs may
function like facilitators in MPower business model.
Upon reaching critical scale, MPower will generate huge volumes of
transaction data, which can be monetized to build an alternate
stream of revenue.
The MPower platform will develop an innovative open architecture
approach to easily build and integrate customer and merchant-
centric services around it. And it will be adopted to provide API
access to the developer community and other players to build apps
and use-cases using the payments platform.
All possible payments flows within the village economy.
Image from B.Lietaer, G. Hallsmith. Community Currencies Guide. 2006
To WIN, we need to sustain MPower’s ecosystem and platforms by becoming a key element of the
village economy to mitigate the entry of new players

32. MPower will redefines the way traditional banks and financial institutions approach the financially excluded
while enabling these customers to have an affordable solution to become part of the mainstream economy
1. Introduce an intelligent hybrid wallet solution based on blockchain technologies to bridge the gap between the financially excluded
with financial institutions, governments and businesses, using digital money as a powerful catalyst for financial inclusion.
1. Provide a 360 degree financial service for financially excluded by enabling them to receive money (from government, employers,
family members), store money (with the ability to generate wealth through savings) and distribute money (transact with local
merchants, and transfer to family and friends).
1. Provide a cost effective for financial institutions and governments by reducing the need for physical access points (i.e branches,
agents) by allowing the financially excluded to access their funds through their mobile device.
1. To differentiate and deliver an intuitive, and exceptional customer experience. Makes it easier for the financially excluded to conduct
their day to day activities, and provide them with confidence on the security of the solution. Thus, we need an agile and iterative
approach to test and learn the product on the market, and build a simple, intuitive process on all available mobile phone platforms.
1. The window of opportunity is tight, with existing competitors slowly moving into the feature phone market as they realise that these
technologies are not going away. Given the time to get regulatory approval, the best approach is to collaborate with financial
institutions and the government, instead of setting up a separate payment entity.
Key Recommendations

33. In order to achieve our goals
for MPower, we need to plan
a sequence of 6 monthly
steps with a view to:
(1) Develop a tested product
in the market place
(2) Engage key stakeholders
and obtain their buy-in and
support
(3) Develop the initial
business model for MPower
+ 6 months
ProductDevelopment
Stakeholder engagement
BusinessDevelopment
Capital Management
+ 12 months + 18 months + 24 months
Develop Minimal Viable
Product (MVP 1.0)
Obtain Startup funding
Test and Iterate
(MVP 2.0)
Develop prototype
Release public
solution
Initiate pilot
Develop Marketing
plan
Obtain 2nd Stage
funding
Formation Validation Scale
Define Pilot ecosystem
(market, features, KPIs)
Develop API integration
Test and on-board
Merchants
Iterate with Regulator,
Government agencies
Engage pilot
merchants
On-board team
Establish partnership with
Banks and Govt agency to
support pilot
Engage Regulator,
Government agencies
Develop Business plan
Obtain seed funding
!MPower

34. APPENDIX

35. The Team
David Cheung
Banker with more than 15 years
of international experience
across retail and corporate
banking.
He currently provides
transaction banking solutions
(i.e. payments and cash
management as well as trade
and supply chain solutions) to
some of the largest MNC clients
of the bank
intrigued by fintech / blockchain
and how can we leverage this
technology to increase financial
inclusion / benefit the lower
1billion
Kaiwan Turel
Specialist in Central Banking and
Financial and Monetary Law, as
well as in Financial Inclusion and
Digital Financial Services.
Formerly General Counsel of the
Legal Department at the Central
Bank of Brazil
PhD in Law, The State and The
Constitution, at the Faculty of Law,
University of Brasília, Brazil,
defending a thesis on “Social
Currencies: Contributions to the
Definition of a Legal and
Regulatory Framework of Local
Social Currencies in Brazil”
Awarded the Creative Economy
Prize by the Ministry of Culture of
Brazil (2012).
Marusa Freire
Technologist with experience in
business. Worked in R&D (with 2
patents in his name), systems
design, consulting, pre-sales
support and sales.
He currently handles account
management responsibilities for
a wide range of financial services
organizations and public sector
agencies in Western India for
Oracle Corporation.
MBA (majoring in Business
Strategy, and a minor in finance)
from NMIMS, Mumbai, and
attended graduate engineering
school in Utah State University,
USA.
Partho Choudhury
Data Scientist, Technology
Architect in Data Analytics, Data
Security and Business
Intelligence with 15 years in
designing enterprise-level data
warehouses and technology for a
highly regulated domain like
Clinical trials and drug research.
Certified Clinical Hypnotherapist,
Physics enthusiast and Hacker
with a passion in cracking
patterns and probabilities in
everything.
Passionate about Financial
Inclusion, Digital Technologies
and helping the underserved.
Priya Randolph
Specialist in driving the delivery of
IT transformation projects across a
myriad of industries.
He is currently working in a global
insurance firm in IT strategy
development focussing on
delivering closer alignment with
business needs.
Has over 20 years IT delivery and
consulting experience with a
specific focus on bringing together
a convergence between business
and technologists to provide
solutions to real problems.

36. OPPORTUNITIES for MPower
(CHALLENGES or GAPS in the current
system)
RISKS for MPower (Competition,
Macro factors)
LEARNINGS
LEGAL FACTORS
The business model of a payments bank
is not viable. (The cost of compliance for
a payments bank is high, they cannot
lend, and the Government imposes 75%
be invested in govt. bonds)
The MPower neatly fits into this gap and
can solve the exact problem Payment
banks face.
The Reserve Bank of India currently
mandates that a wallet of the type
“open pre-paid instrument” can only
be issued by a bank. An open pre-paid
system is one that allows money to
be transferred out of it.
Creating a hybrid wallet that
is common to all banks and
that can potentially transfer
money between banks at no
cost may be a problem with
the regulatory rules that are
currently operational.
Appeal to regulation for a
clause that can help the lower
income bracket.
Financial Inclusion is almost an
obligatory mandate issued to banks,
NBFC and Micro-finance institutes in
India. (RBI circulars, publication report,
2016)
Further, the above mandate prevents
NBFC and Micro-finance institutes
from participating in an open type
wallet.
Workaround the legalities of
partnering with banks to
create the hybrid solution.
A solution like the MPower
will help banks meet their
Financial Inclusion targets
The Aadhaar identities system is the
largest in the world with a billion
identities already available.
NPCI may not want to encourage a
blockchain-based system for Aadhaar
built by a non-government entity.
The MPower as a platform
must strive to support IDs and
authentication methods in
addition to Aadhaar.
The RBI policy of forbearance
(allowing bankers to decide charges
themselves) with regard to service
charges does not help
micropayments. Banks are charging
money for almost every small
transaction or service they offer.
With the MPower, banks will
be discouraged from charging
a heavy fee. This could be a
challenge for the MPower.
Explore how this can be
overcome.
POLITICAL FACTORS
The current government policies for digital transactions are not
made with the lower half of the pyramid in mind.
The MPower can help create a hybrid wallet common to all
banks if the government can nurture a policy for it to serve the
underbanked.
While the MPower supports a
model that benefits banks,
merchants as well as consumers,
the regulatory policies for a
hybrid wallet are currently not in
place. Lobbying for approvals
may risk the solution.
Speculate alternative workarounds
or channels to implement the same
solution until a policy change is
approved.
Blockchain protects the interests of the consumer. Agent-related
risks that create identity theft, fraud and unregulated
commissions and prices can be eliminated with blockchain.
The current system and policies
do not incentivise cashless
transactions. This implies there
is no pressing need for
consumers in the cash economy
to make the shift.
Appeal to regulation to incentivise
cashless transactions at the lower
income bracket.
The tables in this slide and the next present the list of factors that create either favorable Opportunities or Risks that the
MPower could face. Strategic pointers to overcome such risks are listed in column 3 of each table. Findings and Outcomes from
the analysis that must eventually be used to architect the MPower’s business model are highlighted in green text.
OPPORTUNITIES for MPower (CHALLENGES or GAPS
in the current system)
RISKS for MPower
(Competition, Macro
factors)
LEARNINGS
ENVIRONMENTAL FACTORS
Household patterns in semi-urban and rural India are
mainly community-based and closely-collaborative.
This encourages the spread of referrals that can
uptake a system like the MPower.
The community mentality
implies a snowball effect
for either the adoption or
rejection of anything new
in the market.
Innovate in the methods of
marketing, customer
acquisition, customer delight
and customer retention.
India being the second largest population in the
world1, with at least 450 million offline and 253 million
first time banked2, the large segment presents the
opportunity to businesses, banks and customers to
enter into a win-win model.
The economics lies in small
value and high volume
transactions.
India’s major population is youth and the Millenials are
eager to try new technologies.
Customer-experience must be a
focus area.
India’s goal is to promote a paperless world and the
MPower concurs with this thought.
MPower promotes a Go-green
initiative and must position it
accordingly in marketing.

37. OPPORTUNITIES (CHALLENGES or GAPS in
the current system)
RISKS (Competition,
Macro factors)
LEARNINGS
TECHNOLOGICAL FACTORS
The UPI (unified payments interface)
provides interoperability from a usability
perspective, it does not reduce the cost of
transaction.
MPower will help reduce transaction costs
while still employing the popular UPI
interface for its ease of use.
Although the country
welcomes BLOCKCHAIN,
it may take time for
Banks and Financial
institutes, Agents to
readily adopt a system
that could potentially cut
down on their current
revenue channels.
The MPower must
develop a win-win model
to work with Banks .
There are only 13 commercial bank
branches per 100,000 adults. This implies
high operating costs for Banks to cover un-
serviced areas.
The MPower can save
huge costs and time for
Banks and increase their
customer base.
Jio is now present in more than 18,000
urban and rural towns and over 1,50,000
villages. Also, a $17-billion government
program to build a national optical fiber
network that will connect village-level
governments, aims to cover the entire
country in three years.
The wider area will encourage higher
penetration of both smartphones and
feature phones. The MPower can capitalize
on the number of new smartphone users
and feature phone users.
Jio and other incumbents
could monopolize the
market and bring
competing technologies.
The MPower must thus
become a framework or
standard that can allow
incumbents like Reliance
to be a part of the
platform.
The current technology for authentication
using Biometrics prevents feature phone
users from accessing several financial
services without physically travelling to
banks.
The need is to also provide Biometric
authentication to customers who cannot
afford it.
The MPower proposes empowering
merchants with biometric STQC certified
fingerprint or IRIS devices that feature
phone customers can use to digitally pay.
Technological Literacy of
rural people is
considerably low.
The MPower aims to
create a digital
transactions system that
makes digital payments
as easy as cash
payments.
Feature phone users will
be able to make digital
transactions using
Aadhaar authentication
at Merchants.
OPPORTUNITIES (CHALLENGES or GAPS in the current system) RISKS (Competition, Macro factors) LEARNNGS
SOCIAL FACTORS
Smart phone penetration steadily increasing plus the
introduction of Reliance Jio that disrupts existing incumbents
forcing them to bring the cost of data plans down creates an
ideal environment for first-time smartphone users to adopt
digital payment methods.
1. The inertia of using cash.
2. Telco incumbents can partially
provide mobile-based digital
solutions that may not solve the
problem yet make people feel there
is no pressing need for MPower.
The key is in the simplicity of
such a solution. And creating a
model that incentivises digital
transactions
The consequence of Urbanization – Migratory population
increases. Remittances should be supportable from anywhere to
semi-urban and rural areas.3.
The current system is not cost-effective for micro-payments nor
does the infrastructure support easy and fast remittances.
The MPower can allow instant low cost remittances.
The community mentality means a
snowball effect for either the
adoption or rejection of anything
new in the market.
The IHAM’s model must
overcome cultural inertial
towards adopting a new
technology.
ECONOMIC FACTORS
The uniform tax regime through the GST (Goods and Services
Tax) in April 2017, implies an improvement in the ease of doing
business With better market sentiments, we can expect
businesses to be more innovative/open to adopting innovative
disruptions.
This could mean a better reception of MPower in the
market.
With a constant tension between
India and Pakistan and border
skirmishes rampant currently, this
can impact the business
sentiment, Foreign Direct
Investment to MFI and funds
directed towards the Financial
Inclusion economy and its growth.
Inflation rates growing at the slowest rates and less than the
GDP implies consumers can spend more money on non-
essentials like financial inclusion products.
The English language not being
the primary language in rural and
semi-urban areas can impact
products that do not support
regional languages.
Include language support in
IHAM’s user interface apps.
ETHICAL FACTORS
Self-sovereignty of data is of utmost importance with billions
getting onto the digital economy. A framework that gives the
user absolute self-sovereignty is absent today.
The MPower framework recognizes this need and allows the
consumers full control of their private data using blockchain.
With the right to data privacy
being questioned and the Indian
laws not stating clearly either
ways, this may not appear at first
to be a pressing need.
Data for social good.
With a digital footprint, the MPower uses Data analytics to
provide better products and financial services to the poor.
Incumbent technologies
specializing in analytics can
partner with Banks and MFI.
The MPower must seamlessly tie
together the blockchain solution
with its analytics to feed data to
each other.