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Paying bills for profit
Prakriti Prasad in New Delhi | January 24, 2006
Rahul Munjal is pleased with himself. Last week, his own venture Easy Bill Ltd, a service to smoothen the customer's cyclical bill payment rigmarole, won the telecom major Mahanagar Telecom Nigam Ltd over to its network. MTNL phone subscribers in Delhi and Mumbai can now use Easy Bill to pay up.
Munjal understands mass markets and cycles as perhaps few others in business do. He is a scion of the Ludhiana-based Hero Group, India's largest maker of bicycles, and this has kept his ear very close to the ground.
Thus it was that in 2003 he set up Easy Bill to simplify bill-payment. "Our research showed that an average consumer spent about 64 minutes and Rs 12 in paying one bill," recounts Munjal, "If you have to pay three bills in a month that amounts to approximately 180 unproductive minutes."
The solution was to use technology for efficiency, but with "a human face to it", to provide a hassle-free payment option at nominal cost.
But it was a non-starter until recently. For, a business like this operates on the network principle. The service is attractive only so long as it can pay all the household bills, and can reach people widely enough. It is only now that Easy Bill appears to have gained critical mass on both aspects.
Munjal now claims to have over 40 bill issuers in his network, and about 1,500 Easy Bill outlets: 700 in Delhi, 350 in Mumbai, 250 in Bangalore, and some in Kolkata, Pune, Jaipur and Ludhiana. The target: 10,000 in two years. In the major cities, Munjal wants an Easy Bill within half a kilometer's walk.
"See, it's a numbers game," says Munjal, "You have to have the numbers to succeed." And the economies of numbers have started kicking in.
The service costs the customer less than Rs 5 per bill, and this is fast falling to zero, as the network grows and Easy Bill depends more and more on a cut from bill issuers for its revenues.
Issuers such as cellphone services have expanded so fast that they would rather outsource bill collections to a low-cost player than expend their own resources on the job.
Is there a risk of goof-ups? No, claims Munjal. "Till date we have collected Rs 1,000 crore (Rs 10 billion) and lost not even a penny." India's entire pie of bills is many multiples of that, and to get a bigger slice, Easy Bill would have to advertise itself in mass media.
A brand that assures a fair deal to all would be too compelling to ignore.