And the Most Important Question- How Do We Collect the Money?

So assuming people like us and want to pay us, the next question we need to answer is…how do we collect money from people?  I don’t have a good answer yet (hope to have one in the next month or two).  But here’s what we have so far (in order of preference)

  1. People give us their bank account info and we directly debit 10 INR per month (Through the ECS facility) Initial research (i.e. Google) tells me that most banks (if not all the banks in Hubli) have this facility.  So the roadblock doesn’t seem to be capability.  Now the question is: will people give us their bank account info?  We think that if our customers trust us enough/like our service enough, they will give it to us.  Apparently a lot of companies use the ECS facility in India.  So how much is liking us/trusting us enough?  Don’t know.  But we are going to try to start asking people for their bank info next month and see what happens (when we come around to collect the first payment).  (Good) Press will help with the credibility part- so we are hoping to get some of that soon as well.  Also, if we find that the facility is there (which I”m pretty convinced there is), and people are willing to give it to us (possibly), then we need to figure out if this option is prohibitively expensive for the running of our business.  (And if so is there anything we can do to cut a deal- maybe we can get them more bank accounts or they give discounts for social enterprises/good press?)
  2. Partner with Hubli Dharwad One Centers:  Basically, they are the places people already go to pay utility bills.  This is what the Water Board Suggested we use, but I’m not the biggest fan for a couple of reasons.  First, it’s not scalable (i.e. not all cities have these) but more importantly, I”m not convinced people will actually make the effort to pay a 10 INR NextDrop bill (I mean the time taken to write the receipt is probably worth more than 10 INR).  One way around that is to require 3 month, 6 month, 9 month, or 1 year long subscriptions (i.e. collecting larger chunks of money up front) but it still doesn’t seem like the top choice because I believe inevitably, it forces us into the situation of cutting off services for people who don’t pay.  We will probably eventually encounter this, but I don’t want laziness to be the main deterrent to paying a NextDrop bill.  (Why put more barriers between us and money?)
  3. Tacking 10 INR on to the water bill:  This sounds like the best option but it’s still comes in second to last place.  At the end of the day, people complain about the water utility, but they complain about its billing processes even more. We want to use the water utility’s name for credibility, but not be associated with the things people really don’t like about it.  Also, internal sources tell me that it will take forever to actually see the money (due to the beauracracy which is inherent in any government institution) which is definitely not optimal for running a business (i.e. we need to pay people’s paychecks in a timely manner).
  4. Mobile Payments:  I thought this may be the first option until I actually asked people how they felt about it.  In 10 minutes I realized that this just plain wouldn’t work for normal residents in Hubli.  Why?  Nobody trusts mobile banking.  Period.  This may be a good solution for people who don’t have bank accounts (maybe based on papers I’ve read in rural areas) but I am not sure.  I don’t have any real evidence to back this up, but its still an option and honestly, not something we are immediately going to tackle.  If the percentage of the unbanked is less than 25% (as estimates indicate) then, I think it would be cheaper to just collect money from people.  We will have to run numbers and see, but at the end of the day, labor is really cheap in India and I still keep that as an option.
  5. Door to Door Collection:  I am putting this up here just to say that labor costs are really cheap in India (as stated above).  The prohibitive factor is not money (necessarily) but the fact we need that many people that we trust with money. Still the last option but I don’t want to completely rule it out.

That is currently, one of the main issues we are grappling with/trying to tackle.  First iterations/prototypes of a solution to come within the next few months.  

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