PremiumCatalyst will combine new technology, business models, and innovations to help merchants and consumers (in particular the poor and disadvantaged) to move towards a cashless economy
New Delhi: Launched about a month back, ‘Catalyst’—a joint initiative by the Government of India and United States Agency for International Development (USAID), has decided to roll out its first pilot among a series of changes in Jaipur by January. Catalyst will combine new technology, business models, and innovations to help merchants and consumers (in particular the poor and disadvantaged) to move towards a cashless economy.
The pilot will conduct tests on 4 themes.Firstly, aiming to convert the flow of wage accounts in the informal sector from cash to digital.Secondly, incentivizing and strategizing the consumers to use digital accounts. Thirdly, developing innovative business models for the merchants to reduce their cost of conducting business. Lastly, it aims to digitize the collections of consumer brands and distributors.
The city of Jaipur was chosen after going through various indices such as Crisil Index of Financial Inclusion (2013),Direct benefit transfer(DBT) Index and Biometrically Authenticated Physical Uptake( BAPU) index, as per ‘Catalyst’. Data from last mile delivery partners like Suvidha was also used in ranking cities in terms of unique customers and number of transactions.
“Jaipur is a Tier II city which has the enabling infrastructure in place, however the behaviourial shift towards digital payments has not happened. Therefore it makes it the perfect geography to test different business models and incentives here," Badal Malick, CEO, Catalyst said.
The DBT index is based on Aadhaar penetration; bank account penetration and Banking correspondent (BC) density, whereas BAPU index is based on Point of Sale(POS) machine availability besides Aadhaar penetration.
Currently, talks with various companies are on in Mumbai, Bangalore and New Delhi regarding finding partners for this project. They range from banks like ICICI and Yes Bank, wallets like freecharge to National Payments Corporation Of India(NPCI), Mastercard or startups like Mindtree and Instafeez .
The idea of Catalyst was conceptualized when Prime minister Narendra Modi visited the white house in June last year. Aiming to achieve universal financial inclusion, Catalyst is expected to to promote the use of digitization in other locations in India too. A Memorandum Of Understanding (MOU) was signed with the state of Rajasthan on 17 November this year, following which the entity zeroed in on Jaipur to start its operations.
Never miss a story! Stay connected and informed with Mint. Download our App Now!!
