Архив рубрики: COVID-19

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Nextdoor and Walmart partner on a new neighborly assistance program

Neighborhood social network Nextdoor and Walmart are teaming up today to launch a new “Neighbors Helping Neighbors” program that will make it easier for vulnerable community members to get assistance from neighbors who are already planning a trip to Walmart. The new in-app feature will allow Nextdoor users to post to groups associated with their local Walmart store to request shopping assistance.
To find the new option, Nextdoor users can either use the Nextdoor website or mobile app.
From there, users will click on the “Groups” tab where they’ll see local Walmart stores pinned to the top of the page. Members can then post a message to the group feed where they can ask for help or offer to help others.
Members who connect in the feed can then work out the details on the message board or through direct message, where they can share more private details like their address and what they need from the store.

The feature is designed to help elderly, high-risk or other vulnerable members find someone who will pick up groceries, medications or other essentials when they’re planning a trip to the store.
This could also offer a low-cost alternative to using online grocery delivery services, which require tipping. In the case of a neighbor helping a neighbor, the assistance is offered on a volunteer basis, not as someone’s job. That could be potentially life-saving for low-income community members who can’t risk shopping in a store during the coronavirus pandemic, but who also struggle to afford alternatives like online grocery.
Walmart isn’t moderating or managing these Nextdoor groups, to be clear, but worked with Nextdoor to make the feature available.
For the retailer, the addition isn’t just beneficial in terms of directing customers to Walmart to shop, it’s also seen as a way to reduce the number of people who come to the store in-person.
“I’ve seen first-hand the countless ways our Walmart team is working together during this challenging time, leading with humanity, compassion and understanding to serve our customers,” said Janey Whiteside, Walmart’s chief customer officer, in a statement about the feature’s launch. “We’re continuing to do that through our new program with Nextdoor. We’re connecting neighbors to each other so that more members of our communities have access to essential items, while limiting contact and the number of people shopping in our stores,” she added.

Nextdoor has launched several new features in response to the coronavirus pandemic in recent weeks.
Its new “Help Maps” allowed members to post and offer help in their neighborhood, for example. But this feature had been buried on the “More” menu in the app and was being underutilized as a result. A dedicated place within Nextdoor Groups for these sorts of requests is more visible, making it easier to offer assistance or to ask for help.
Over the past few weeks, Nextdoor says it has seen a 7x increase in people joining groups to help one another, a not surprising figure given its recent exit from beta.
Nextdoor will also make the Walmart groups easy to find by pinning them to the top of the Groups tab, it says.
Meanwhile, Walmart store locations and hours where “Neighbors Helping Neighbors” is available can be found on Nextdoor’s “Help Map.”

“We’re inspired everyday by the kindness of people around the world who are stepping up and helping out. In recent weeks, we’ve been blown away by the number of members who have raised their hand to run an errand, go to the grocery store, or pick up a prescription for a neighbor,” said Sarah Friar, Nextdoor CEO, about the feature. “We’re grateful for Walmart’s partnership to make this important connection between neighbors around vital services, and we’re proud to come together to ensure everyone has a neighborhood to rely on,” she said.
The new initiative is launching nationwide starting today, but may not be immediately available in the app as the rollout could take time to complete.

Nextdoor and Walmart partner on a new neighborly assistance program

Clubhouse voice chat leads a wave of spontaneous social apps

Forget the calendar invite. Just jump into a conversation. That’s the idea powering a fresh batch of social startups poised to take advantage of our cleared schedules amidst quarantine. But they could also change the way we work and socialize long after COVID-19 by bringing the free-flowing, ad-hoc communication of parties and open office plans online. While “Live” has become synonymous with performative streaming, these new apps instead spread the limelight across several users as well as the task, game, or discussion at hand.
The most buzzy of these startups is Clubhouse, an audio-based social network where people can spontaneously jump into voice chat rooms together. You see the unlabeled rooms of all the people you follow, and you can join to talk or just listen along, milling around to find what interests you. High-energy rooms attract crowds while slower ones see participants slip out to join other chat circles.
Clubhouse blew up this weekend on VC Twitter as people scrambled for exclusive invites, humblebragged about their membership, or made fun of everyone’s FOMO. For now, there’s no public app or access. The name Clubhouse perfectly captures how people long to be part of the in-crowd.
Clubhouse was built by Paul Davison, who previously founded serendipitous offline people-meeting location app Highlight and reveal-your-whole-camera-roll app Shorts before his team was acquired by Pinterest in 2016. This year he debuted his Alpha Exploration Co startup studio and launched Talkshow for instantly broadcasting radio-style call-in shows. Spontaneity is the thread that ties Davison’s work together, whether its for making new friends, sharing your life, transmitting your thoughts, or having a discussion.
It’s very early days for Clubhouse. It doesn’t even have a website. There’s no telling exactly what it will be like if or when it officially launches, and Davison and his co-founder Rohan Seth declined to comment. But the positive reception shows a desire for a more immediate, multi-media approach to discussion that updates what Twitter did with text.
Sheltered From Surprise
What quarantine has revealed is that when you separate everyone, spontaneity is a big thing you miss. In your office, that could be having a random watercooler chat with a co-worker or commenting aloud about something funny you found on the internet. At a party, it could be wandering up to chat with group of people because you know one of them or overhear something interesting. That’s lacking while we’re stuck home since we’ve stigmatized randomly phoning a friend, differing to asynchronous text despite its lack of urgency.
Clubhouse founder Paul Davison. Image Credit: JD Lasica
Scheduled Zoom calls, utilitarian Slack threads, and endless email chains don’t capture the thrill of surprise or the joy of conversation that giddily revs up as people riff off each other’s ideas. But smart app developers are also realizing that spontaneity doesn’t mean constantly interrupting people’s life or workflow. They give people the power to decide when they are or aren’t available or signal that they’re not to be disturbed so they’re only thrust into social connection when they want it.
Houseparty chart ranks via AppAnnie
Houseparty embodies this spontaneity. It’s become the breakout hit of quarantine by letting people on a whim join group video chat rooms with friends the second they open the app. It saw 50 million downloads in a month, up 70X over its pre-COVID levels in some places. It’s become the #1 social app in 82 countries including the US, and #1 overall in 16 countries.
Originally built for gaming, Discord lets communities spontaneously connect through persistent video, voice, and chat rooms. It’s seen a 50% increase in US daily voice users with spikes in shelter-in-place early adopter states like California, New York, New Jersey, and Washington. Bunch, for video chat overlayed on mobile gaming, is also climbing the charts and going mainstream with its user base shifting to become majority female as they talk for 1.5 million minutes per day. Both apps make it easy to join up with pals and pick something to play together.

The Impromptu Office
Enterprise video chat tools are adapting to spontaneity as an alternative to heavy-handed, pre-meditated Zoom calls. There’s been a backlash as people realize they don’t get anything done by scheduling back-to-back video chats all day.
Loom lets you quickly record and send a video clip to co-workers that they can watch at their leisure, with back-and-forth conversation sped up because videos are uploaded as they’re shot.
Loom
Around overlays small circular video windows atop your screen so you can instantly communicate with colleagues while most of your desktop stays focused on your actual work.
Around
Screen exists as a tiny widget that can launch a collaborative screenshare where everyone gets a cursor to control the shared window so they can improvisationally code, design, write, and annotate.
Screen
Pragli is an avatar-based virtual office where you can see if someone’s in a calendar meeting, away, or in flow listening to music so you know when to instantly open a voice or video chat channel together without having to purposefully find a time everyone’s free. But instead of following you home like Slack, Pragli lets you sign in and out of the virtual office to start and end your day.
Pragli
Raising Our Voice
While visual communication has been the breakout feature of our mobile phones by allowing us to show where we are, shelter-in-place means we don’t have much to show. That’s expanded the opportunity for tools that take a less-is-more approach to spontaneous communication. Whether for remote partying or rapid problem solving, new apps beyond Clubhouse are incorporating voice rather than just video. Voice offers a way to rapidly exchange information and feel present together without dominating our workspace or attention, or forcing people into an uncomfortable spotlight.
High Fidelity is Second Life co-founder Philip Rosedale’s $72 million-funded current startup. After recently pivoting away from building a virtual reality co-working tool, High Fidelity has begun testing a voice and headphones-based online event platform and gathering place. The early beta lets users move their dot around a map and hear the voice of anyone close to them with spatial audio so voices get louder as you get closer to someone, and shift between your ears as you move past them. You can spontaneously approach and depart little clusters of dots to explore different conversations within earshot.
An unofficial mockup of High Fidelity’s early tests. Image Credits: DigitalGlobe (opens in a new window) / Getty Images
High Fidelity is currently using a satellite photo of Burning Man as its test map. It allows DJs to set up in different corners, and listeners to stroll between them or walk off with a friend to chat, similar to the real offline event. Since Burning Man was cancelled this year, High Fidelity could potentially be a candidate for holding the scheduled virtual version the organizers have promised.
Houseparty’s former CEO Ben Rubin and Skype GM of engineering Brian Meek are building a spontaneous teamwork tool called Slashtalk. Rubin sold Houseparty to Fortnite-maker Epic in mid-2019, but the gaming giant largely neglected the app until its recent quarantine-driven success. Rubin left.

His new startup’s site explains that “/talk is an anti-meeting tool for fast, decentralized conversations. We believe most meetings can be eliminated if the right people are connected at the right time to discuss the right topics, for just as long as necessary.” It lets people quickly jump into a voice or video chat to get something sorted without delaying until a calendared collab session.
Slashtalk co-founder Ben Rubin at TechCrunch Disrupt NY 2015
Whether for work or play, these spontaneous apps can conjure times from our more unstructured youth. Whether sifting through the cafeteria or school yard, seeing who else is at the mall, walking through halls of open doors in college dorms, or hanging at the student union or campus square, the pre-adult years offer many opportunities for impromptu social interation.
As we age and move into our separate homes, we literally erect walls that limit our ability to perceive the social cues that signal that someone’s available for unprompted communication. That’s spawned apps like Down To Lunch and Snapchat acquisition Zenly, and Facebook’s upcoming Messenger status feature designed to break through those barriers and make it feel less desperate to ask someone to hang out offline.

Under quarantine, media is actually social

But while socializing or collaborating IRL requires transportation logistics and usually a plan, the new social apps discussed here bring us together instantly, thereby eliminating the need to schedule togetherness ahead of time. Gone too are the geographic limits restraining you to connect only with those within a reasonable commute. Digitally, you can pick from your whole network. And quarantines have further opened our options by emptying parts of our calendars.
Absent those frictions, what shines through is our intention. We can connect with who we want and accomplish what we want. Spontaneous apps open the channel so our impulsive human nature can shine through.

Clubhouse voice chat leads a wave of spontaneous social apps

Europe’s PEPP-PT COVID-19 contacts tracing standard push could be squaring up for a fight with Apple and Google

A coalition of EU scientists and technologists that’s developing what’s billed as a “privacy-preserving” standard for Bluetooth-based proximity tracking, as a proxy for COVID-19 infection risk, wants Apple and Google to make changes to an API they’re developing for the same overarching purpose.
The Pan-European Privacy-Preserving Proximity Tracing (PEPP-PT) uncloaked on April 1, calling for developers of contact tracing apps to get behind a standardized approach to processing smartphone users’ data to coordinate digital interventions across borders and shrink the risk of overly intrusive location-tracking tools gaining momentum as a result of the pandemic.
PEPP-PT said today it has seven governments signed up to apply its approach to national apps, with a claimed pipeline of a further 40 in discussions about joining.
“We now have a lot of governments interacting,” said PEPP-PT’s Hans-Christian Boos, speaking during a webinar for journalists. “Some governments are publicly declaring that their local applications will be built on top of the principles of PEPP-PT and also the various protocols supplied inside this initiative.
“We know of seven countries that have already committed to do this — and we’re currently in conversation with 40 countries that are in various states of onboarding.”
Boos said a list of the governments would be shared with journalists, though at the time of writing we haven’t seen it. But we’ve asked PEPP-PT’s PR firm for the info and will update this report when we get it.
“The pan-European approach has worked,” he added. “Governments have decided at a speed previously unknown. But with 40 more countries in the queue of onboarding we definitely have outgrown just the European focus — and to us this shows that privacy as a model and as a discussion point… is a statement and it is something that we can export because we’re credible on it.”
Paolo de Rosa, the CTO at the Ministry of Innovation Technology and Digital Transformation for the Italian government, was also on the webinar — and confirmed its national app will be built on top of PEPP-PT.
“We will have an app soon and obviously it will be based on this model,” he said, offering no further details.
PEPP-PT’s core “privacy-preserving” claim rests on the use of system architectures that do not require location data to be collected. Rather devices that come near each other would share pseudonymized IDs — which could later be used to send notifications to an individual if the system calculates an infection risk has occurred. An infected individual’s contacts would be uploaded at the point of diagnosis — allowing notifications to be sent to other devices with which had come into contact.
Boos, a spokesman for and coordinator of PEPP-PT, told TechCrunch earlier this month the project will support both centralized and decentralized approaches. The former meaning IDs are uploaded to a trusted server, such as one controlled by a health authority; the latter meaning IDs are held locally on devices, where the infection risk is also calculated — a backend server is only in the loop to relay info to devices.
It’s just such a decentralized contacts tracing system that Apple and Google are collaborating on supporting — fast-following PEPP-PT last week by announcing a plan for cross-platform COVID-19 contacts tracing via a forthcoming API and then a system-wide (opt-in) for Bluetooth-based proximity tracking.
That intervention, by the only two smartphone platforms that matter when the ambition is mainstream adoption, is a major development — putting momentum behind decentralized contacts tracing for responding digitally to the coronavirus crisis in the Western world, certainly at the platform level.
In a resolution passed today the European parliament also called for a decentralized approach to COVID-19 proximity tracking.
MEPs are pushing for the Commission and Member States to be “fully transparent on the functioning of contact tracing apps, so that people can verify both the underlying protocol for security and privacy and check the code itself to see whether the application functions as the authorities are claiming.” (The Commission has previously signaled a preference for decentralization too.)
However, backers of PEPP-PT, which include at least seven governments (and the claim of many more), aren’t giving up on the option of a “privacy-preserving” centralized option — which some in their camp are dubbing “pseudo-decentralized” — with Boos claiming today that discussions are ongoing with Apple and Google about making changes to their approach.
As it stands, contacts tracing apps that don’t use a decentralized infrastructure won’t be able to carry out Bluetooth tracking in the background on Android or iOS — as the platforms limit how general apps can access Bluetooth. This means users of such apps would have to have the app open and active all the time for proximity tracking to function, with associated (negative) impacts on battery life and device usability.
There are also (intentional) restrictions on how contacts tracing data could be centralized, as a result of the relay server model being deployed in the joint Apple-Google model.
“We very much appreciate that Google and Apple are stepping up to making the operating system layer available — or putting what should be the OS actually there, which is the Bluetooth measurement and the handling of crypto and the background running of such tasks which have to keep running resiliently all the time — if you look at their protocols and if you look at whom they are provided by, the two dominant players in the mobile ecosystem, then I think that from a government perspective especially, or from lots of government perspectives, there are many open points to discuss,” said Boos today.
“From a PEPP-PT perspective there are a few points to discuss because we want choice and implementing choice in terms of model — decentralized or centralized on top of their protocol creates actually the worst of both worlds — so there are many points to discuss. But contrary to the behavior that many of us who work with tech companies are used to Google and Apple are very open in these discussions and there’s no point in getting up in arms yet because these discussions are ongoing and it looks like agreement can be reached with them.”
It wasn’t clear what specific changes PEPP-PT wants from Apple and Google — we asked for more detail during the webinar but didn’t get a response. But the group and its government backers may be hoping to dilute the tech giants’ stance to make it easier to create centralized graphs of Bluetooth contacts to feed national coronavirus responses.
As it stands, Apple and Google’s API is designed to block contact matching on a server — though there might still be ways for governments (and others) to partially work around the restrictions and centralize some data.
We reached out to Apple and Google with questions about the claimed discussions with PEPP-PT. At the time of writing, neither had responded.
As well as Italy, the German and French governments are among those that have indicated they’re backing PEPP-PT for national apps — which suggests powerful EU Member States could be squaring up for a fight with the tech giants, along the lines of Apple versus the FBI, if pressure to tweak the API fails.
Another key strand to this story is that PEPP-PT continues to face strident criticism from privacy and security experts in its own backyard — including after it removed a reference to a decentralized protocol for COVID-19 contacts tracing that’s being developed by another European coalition, comprised of privacy and security experts, called DP-3T.
Coindesk reported on the silent edit to PEPP-PT’s website yesterday.
Backers of DP-3T have also repeatedly queried why PEPP-PT hasn’t published code or protocols for review to-date — and even gone so far as to dub the effort a “trojan horse.”

#DP3T entered as a candidate to so-called PEPP-PT in good faith, but it is now clear that powerful actors pushing centralised databases of Bluetooth contact tracing do not, and will not, act in good faith.
PEPP-PT is a Trojan horse.
— Michael Veale (@mikarv) April 16, 2020

ETH Zürich’s Dr. Kenneth Paterson, who is both a part of the PEPP-PT effort and a designer of DP-3T, couldn’t shed any light on the exact changes the coalition is hoping to extract from “Gapple” when we asked.
“They’ve still not said exactly how their system would work, so I can’t say what they would need [in terms of changes to Apple and Google’s system],” he told us in an email exchange.
Today Boos couched the removal of the reference to DP-3T on PEPP-PT’s website as a mistake — which he blamed on “bad communication.” He also claimed the coalition is still interested in including the former’s decentralized protocol within its bundle of standardized technologies. So the already sometimes fuzzy lines between the camps continue to be redrawn. (It’s also interesting to note that press emails to Boos are now being triaged by Hering Schuppener, a communications firm that sells publicity services, including crisis PR.)
“We’re really sorry for that,” Boos said of the DP-3T excision. “Actually we just wanted to put the various options on the same level that are out there. There are still all these options and we very much appreciate the work that colleagues and others are doing.
“You know there is a hot discussion in the crypto community about this and we actually encourage this discussion because it’s always good to improve on protocols. What we must not lose sight of is… that we’re not talking about crypto here, we’re talking about pandemic management and as long as an underlying transport layer can ensure privacy that’s good enough because governments can choose whatever they want.”
Boos also said PEPP-PT would finally be publishing some technical documents this afternoon — opting to release information some three weeks after its public unveiling and on a Friday evening (a seven-page ‘high level overview’ has since been put on their GitHub here [this link has since been deleted – Ed.] — but still a far cry from code for review) — while making a simultaneous plea for journalists to focus on the “bigger picture” of fighting the coronavirus rather than keep obsessing over technical details. 
During today’s webinar some of the scientists backing PEPP-PT talked about how they’re testing the efficacy of Bluetooth as a proxy for tracking infection risk.
“The algorithm that we’ve been working on looks at the cumulative amount of time that individuals spend in proximity with each other,” said Christophe Fraser, professor at the Nuffield Department of Medicine and Senior Group Leader in Pathogen Dynamics at the Big Data Institute, University of Oxford, offering a general primer on using Bluetooth proximity data for tracking viral transmission.
“The aim is to predict the probability of transmission from the phone proximity data. So the ideal system reduces the requested quarantine to those who are the most at risk of being infected and doesn’t give the notification — even though some proximity event was recorded — to those people who’re not at risk of being infected.”
“Obviously that’s going to be an imperfect process,” he went on. “But the key point is that in this innovative approach that we should be able to audit the extent to which that information and those notifications are correct — so we need to actually be seeing, of the people who have been sent the notification how many of them actually were infected. And of those people who were identified as contacts, how many weren’t.
“Auditing can be done in many different ways for each system but that step is crucial.”
Evaluating the effectiveness of the digital interventions will be vital, per Fraser — whose presentation could have been interpreted as making a case for public health authorities to have fuller access to contacts graphs. But it’s important to note that DP-3T’s decentralized protocol makes clear provision for app users to opt-in to voluntarily share data with epidemiologists and research groups to enable them to reconstruct the interaction graph among infected and at risk users (aka to get access to a proximity graph).
“It’s really important that if you’re going to do an intervention that is going to affect millions of people — in terms of these requests to [quarantine] — that that information be the best possible science or the best possible representation of the evidence at the point at which you give the notification,” added Fraser. “And therefore as we progress forwards that evidence — our understanding of the transmission of the virus — is going to improve. And in fact auditing of the app can allow that to improve, and therefore it seems essential that that information be fed back.”
None of the PEPP-PT-aligned apps that are currently being used for testing or reference are interfacing with national health authority systems, per Boos — though he cited a test in Italy that’s been plugged into a company’s health system to run tests.
“We have supplied the application builders with the backend, we have supplied them with sample code, we have supplied them with protocols, we have supplied them with the science of measurement, and so on and so forth. We have a working application that simply has no integration into a country’s health system — on Android and on iOS,” he noted.
On its website PEPP-PT lists a number of corporate “members” as backing the effort — including the likes of Vodafone — alongside several research institutions including Germany’s Fraunhofer Heinrich Hertz Institute for telecoms (HHI) which has been reported as leading the effort.
The HHI’s executive director, Thomas Wiegand, was also on today’s call. Notably, his name initially appeared on the authorship list for the DP-3T’s white paper. However, on April 10 he was removed from the README and authorship list, per its GitHub document history. No explanation for the change was given.
During today’s press conference Wiegand made an intervention that seems unlikely to endear him to the wider crypto and digital rights community — describing the debate around which cryptography system to use for COVID-19 contacts tracing as a ‘side show’ and expressing concern that what he called Europe’s “open public discussion” might “destroy our ability to get ourselves as Europeans out of this.”
“I just wanted to make everyone aware of the difficulty of this problem,” he also said. “Cryptography is only one of 12 building blocks in the system. So I really would like to have everybody go back and reconsider what problem we are in here. We have to win against this virus… or we have another lockdown or we have a lot of big problems. I would like to have everybody to consider that and to think about it because we have a chance if we get our act together and really win against the virus.”
The press conference had an even more inauspicious start after the Zoom call was disrupted by racist spam in the chat field. Right before that Boos had kicked off the call saying he had heard from “some more technically savvy people that we should not be using Zoom because it’s insecure — and for an initiative that wants security and privacy it’s the wrong tool.”
“Unfortunately we found out that many of our international colleagues only had this on their corporate PCs so over time either Zoom has to improve — or we need to get better installations out there. It’s certainly not our intention to leak the data on this Zoom,” he added.

Europe’s PEPP-PT COVID-19 contacts tracing standard push could be squaring up for a fight with Apple and Google

Italians stuck at home are measuring light pollution for ‘science on the balcony’

The fact that so many people are stuck at home makes for strange opportunities. Italy’s confined populace has taken to singing from the balconies — and now researchers are asking them to use those same balconies to help accomplish a bit of citizen science.
The project, created by the Italian National Research Council, aims to take widespread samples of light pollution in the country. The question of “light trespass,” or how much light from outside our homes reaches inside them, isn’t a particularly easy one to test without access to those homes. So they’re asking people to collect that information themselves.
Lots of data points!
Using their phone and a special app, some 7,000 Italians participated in an initial run of the experiment two weeks ago. All they needed to do was turn off all the lights in their place, go to their window or balcony, and point their phone at the brightest light source they could see.
The resulting data showed that the average light trespass in Italian cities is nearly twice that of homes in the country — not exactly surprising, but it’s important for even supposedly obvious conclusions to be quantified and supported with evidence. Sure, it’s brighter in the city — but how much brighter? What type of light is it? More data means better understanding of even the most basic questions.
“With this experiment, we wanted to bring citizens closer to measurement techniques, to let them see the often complex process and allow them to participate in the scientific method,” Alessandro Farini, one of the organizers of the experiment, told Nature. (I contacted the researchers for more information but have not heard back.)

Astronomers warn of ‘worrisome’ light pollution from satellite constellations

The experiment was so successful that #scienzasulbalcone, or “science on the balcony,” is having an encore — new measurements taken last week and a final one tomorrow night. The team issued revised instructions to its participants in order to better characterize the data they bring in.
Anyone interested in helping is asked to find a light bulb they can easily check the wattage on, then calibrate their phone by leaving only that light on and using their phone’s ambient light sensor to measure its output. This will help calibrate the system, since some phones are more sensitive to light than others. Once they’re done, they can make another measurement out their window or off the balcony, and submit that.
If you’re interested in taking part, you can find the instructions in Italian here; English instructions are here, but I don’t think it is intended to be a global effort just yet.

Italians stuck at home are measuring light pollution for ‘science on the balcony’

Mobile payments firms in India are now scrambling to make money

Vijay Shekhar Sharma, founder and chief executive of India’s most valuable startup, Paytm, posed an existential question in a recent press conference.
“What do you think of the commercial model for digital mobile payments. How do we make money?” Sharma asked Nandan Nilekani, one of the key architects of the Universal Payments Infrastructure that created a digital payments revolution in the country.
It’s the multi-billion-dollar question that scores of local startups and international giants have been scrambling to answer as many of them aggressively shift their focus to serving merchants and building lending products and other financial services .
New Delhi’s abrupt move to invalidate much of the paper bills in the cash-dominated nation in late 2016 sent hundreds of millions of people to cash machines for months to follow.
For a handful of startups such as Paytm and MobiKwik, this cash crunch meant netting tens of millions of new users in a span of a few months.
India then moved to work with a coalition of banks to develop the payments infrastructure that, unlike Paytm and MobiKwik’s earlier system, did not act as an intermediary “mobile wallet” to serve as an intermediary between users and their banks, but facilitated direct transaction between two users’ bank accounts.
Silicon Valley companies quickly took notice. For years, Google and the likes have attempted to change the purchasing behavior of people in many Asian and African markets, where they have amassed hundreds of millions of users.
In Pakistan, for instance, most people still run errands to neighborhood stores when they want to top up credit to make phone calls and access the internet.
With China keeping its doors largely closed for foreign firms, India, where many American giants have already poured billions of dollars to find their next billion users, it was a no-brainer call.
“Unlike China, we have given equal opportunities to both small and large domestic and foreign companies,” said Dilip Asbe, chief executive of NPCI, the payments body behind UPI.
And thus began the race to participate in the grand Indian experiment. Investors have followed suit as well. Indian fintech startups raised $2.74 billion last year, compared to 3.66 billion that their counterparts in China secured, according to research firm CBInsights.
And that bet in a market with more than half a billion internet users has already started to pay off.
“If you look at UPI as a platform, we have never seen growth of this kind before,” Nikhil Kumar, who volunteered at a nonprofit organization to help develop the payments infrastructure, said in an interview.
In October, just three years after its inception, UPI had amassed 100 million users and processed over a billion transactions. It has sustained its growth since, clocking 1.25 billion transactions in March — despite one of the nation’s largest banks going through a meltdown last month.
“It all comes down to the problem it is solving. If you look at the western markets, digital payments have largely been focused on a person sending money to a merchant. UPI does that, but it also enables peer-to-peer payments and across a wide-range of apps. It’s interoperable,” said Kumar, who is now working at a startup called Setu to develop APIs to help small businesses easily accept digital payments.
Vice-president of Google’s Next Billion Users Caesar Sengupta speaks during the launch of the Google “Tez” mobile app for digital payments in New Delhi on September 18, 2017 (Photo: Getty Images via AFP PHOTO / SAJJAD HUSSAIN)
The Google Pay app has amassed over 67 million monthly active users. And the company has found the UPI pipeline so fascinating that it has recommended similar infrastructure to be built in the U.S.
In August, the Federal Reserve proposed to develop a new inter-bank 24×7 real-time gross settlement service that would support faster payments in the country. In November, Google recommended (PDF) that the U.S. Federal Reserve implement a real-time payments platform such as UPI.
“After just three years, the annual run rate of transactions flowing through UPI is about 19% of India’s Gross Domestic Product, including 800 million monthly transactions valued at approximately $19 billion,” wrote Mark Isakowitz, Google’s vice president of Government Affairs and Public Policy.
Paytm itself has amassed more than 150 million users who use it every year to make transactions. Overall, the platform has 300 million mobile wallet accounts and 55 million bank accounts, said Sharma.
Search for a business model
But despite on-boarding more than a hundred million users on their platform, payment firms are struggling to cut their losses — let alone turn a profit.
At an event in Bangalore late last year, Sajith Sivanandan, managing director and business head of Google Pay and Next Billion User Initiatives, said current local rules have forced Google Pay to operate in India without a clear business model.
Mobile payment firms never levied any fee to users as a strategy to expand their reach in the country. A recent directive from the government has now put an end to the cut they were receiving to facilitate UPI transactions between users and merchants.
Google’s Sivanandan urged the local payment bodies to “find ways for payment players to make money” to ensure every stakeholder had incentives to operate.
Paytm, which has raised more than $3 billion to date, reported a loss of $549 million in the financial year ending in March 2019.
The firm, backed by SoftBank and Alibaba, has expanded to several new businesses in recent years, including Paytm Mall, an e-commerce venture, social commerce, financial services arm Paytm Money and a movies and ticketing category.
This year, Paytm has expanded to serve merchants, launching new gadgets such as a stand that displays QR check-out codes that comes with a calculator and a battery pack, a portable speaker that provides voice confirmations of transactions and a point-of-sale machine with built-in scanner and printer.
In an interview with TechCrunch, Sharma said these devices are already garnering impressive demand from merchants. The company is offering these gadgets to them as part of a subscription service that helps it establish a steady flow of revenue.
The firm’s Money arm, which offers lending, insurance and investing services, has amassed over 3 million users. The head of Paytm Money, Pravin Jadhav, resigned from the company this week, a person familiar with the matter said. A Paytm spokeswoman declined to comment. (Indian news outlet Entrackr first reported the development.)
Flipkart’s PhonePe, another major player in India’s payments market, today serves more than 175 million users, and over 8 million merchants. Its app serves as a platform for other businesses to reach users, explained Rahul Chari, co-founder and CTO of the firm, in an interview with TechCrunch. The company is currently not taking a cut for the real estate on its app, he added.
But these startups’ expansion into new categories means that they now have to face off even more rivals, and spend more money to gain a foothold. In the social commerce category, for instance, Paytm is competing with Naspers-backed Meesho and a handful of new entrants; and heavily-backed OkCredit and KhataBook today lead the bookkeeping market.
BharatPe, which raised $75 million two months ago, is digitizing mom and pop stores and granting them working capital. And PineLabs, which has already become a unicorn, and MSwipe have flooded the market with their point-of-sale machines.
A vendor holds an Mswipe terminal, operated by M-Swipe Technologies Pvt Ltd., in an arranged photograph at a roadside stall in Bengaluru, India, on Saturday, Feb. 4, 2017. (Photographer: Dhiraj Singh/Bloomberg via Getty Images)
“They have no choice. Payment is the gateway to businesses such as e-commerce and lending that you can monetize. In Paytm’s case, their earlier bet was Paytm Mall,” said Jayanth Kolla, founder and chief analyst at research firm Convergence Catalyst.
But Paytm Mall has struggled to compete with giants Amazon India and Walmart’s Flipkart. Last year, Mall pivoted to offline-to-online and online-to-offline models, wherein orders placed by customers are serviced from local stores. The company also secured about $160 million from eBay last year.
An executive who previously worked at Paytm Mall said the venture has struggled to grow because its goal-post has constantly shifted over the years. It has recently started to focus on selling fastags, a system that allows vehicle owners to swiftly pay toll fees. At least two more executives at the firm are on their way out, a person familiar with the matter said.
Kolla said the current dynamics of India’s mobile payments market, where more than 100 firms are chasing the same set of audience, is reminiscent of the telecom market in the country from more than a decade ago.
“When there were just four to five players in the telecom market, the prospect of them becoming profitable was much higher. They were scaling like crazy. They grew with the lowest ARPU in the world (at about $2) and were still profitable.
“But the moment that number grew to more than a dozen overnight, and the new players started offering more affordable plans to subscribers, that’s when profitability started to become elusive,” he said.
To top that off, the arrival of Reliance Jio, a telecom operator run by India’s richest man, in 2016 in the country with the cheapest tariff plans in the world, upended the market once again, forcing several players to leave the market, or declare bankruptcies, or consolidate.
India’s mobile payments market is now heading to a similar path, said Kolla.
If there were not enough players fighting for a slice of India’s mobile payments market that Credit Suisse estimate could reach $1 trillion by 2023, WhatsApp, the most popular app in the country with more that 400 million users, is set to roll out its mobile payments service in the country in a couple of months.
At the aforementioned press conference, Nilekani advised Sharma and other players to focus on financial services such as lending.
Unfortunately, the coronavirus outbreak that promoted New Delhi to order a three-week lockdown last month is likely going to impact the ability of millions of people to use such services.
“India has more than 100 million microfinance accounts, serviced in cash every week by gig-economy workers, who hawk vegetables on street corners or embroider saris sold in malls, among other things. Three out of four workers make a living by working casually for others or at their family firms and farms. Prolonged shutdowns will impair their ability to repay loans of 2.1 trillion rupees ($28.5 billion), putting the world’s largest microfinance industry at risk,” wrote Bloomberg columnist Andy Mukherjee.

Mobile payments firms in India are now scrambling to make money