Catalyst is an initiative funded by United States Agency for International Development (USAID) under the mSTAR Program to increase adoption of digital payments in India, using a targeted ecosystem approach.
Our vision is to realize an inclusive digital economy that meets the needs of all Indians.
CATALYST IS UNIQUELY POSITIONED TO PUSH THE NEEDLE
Catalyst has three distinct engines of activity, coordinated in a manner in which we hope their sum will be greater than its parts. Our Digital Payments Lab involves implementing a set of coordinated initiatives in a local geographical ecosystem to shift consumer, merchant and supplier behavior from cash to digital payment transactions.
Build digital payment labs in urban and rural geographies to test and to demonstrate workable cash-light systems for consumers, merchants and suppliers, targeting a 10x boost in payment digitization rates.
Institutionalize and scale successful initiatives in close partnership with public and private sector stakeholders, thus crystallizing replicable models for implementation.
CRACKING THE PAYMENTS JUGGERNAUT
Distinct economic geographies (cities, rural clusters or small towns) where local networks of merchants, consumers, distributors financial services providers, and governments transact with each other
Technology and business models by rolling out initiatives and experiments that combine technologies, business models and institutional innovations to drive large-scale digital payments penetration
Policies and regulations that enable digital payments through analyses and recommendations based on success on the ground
Successful digital payment initiatives across the country by leveraging strategic partnerships and government programs to inform and institutionalize
OUR ROLE - BOTH THAT OF A SPEEDBOAT AND TUGBOAT
Design project portfolios, partnerships, end-to-end solutions, enhanced interfaces and hypotheses to be tested on the ground
Incubation grants and USAID credit guarantees to promote entrepreneurial efforts to solve market failures
On-the-ground Project Management Unit to track progress and coordinate stakeholders
Collaborative, multi-dimensional research on adoption and use of digital finance, and its long term impact
Multisector partnerships to address key challenges, disseminate learnings, scale successful initiatives, and advocate enabling policies
EVOLUTION OF CATALYST
EVOLUTION OF CATALYST
In November 2015, the Government of India (GoI) and USAID formalize a partnership to promote interoperable digital payment solutions in India, with the objective to expand merchant acceptance and build consumer confidence towards greater adoption and use of such solutions.
In its first phase, USAID commissions Dalberg Social Advisors to conduct structured research and implement ground-level experiments with different payment stakeholders across multiple environments (e.g., urban, rural) and contexts (e.g., consumer retail, lending, supply chain). The program generates insights and ideas to overcome barriers faced by small merchants and low income consumers in the adoption and use of digital payments. USAID also convenes 40 partner organizations including private, public and non-profit sector organizations to advance this program.
The seminal report highlights the lack of compelling digital payment value propositions grounded in specific needs and behaviors of end-users. It shows how the vast majority of merchants not using digital payment solutions are simply unaware of associated benefits, and tend to have unconscious biases that prevent their understanding of implicit costs of cash. More interestingly, the report also underscores high satisfaction and endorsement rates among users of digital payment technologies citing benefits linked to speed, security, and lower transaction frictions (e.g., ease of use, no loose change requirements).
PARTNERSHIPS FOR ACTION
PARTNERSHIPS FOR ACTION
The Catalyst Inclusive Cashless Payment Partnership expands to 200+ organizations including major banks and FIs, telcos, fintech innovators, business correspondents, MFIs, local governments, policymakers, regulators, think tanks & knowledge partners, trade associations, donor and development agencies, and domain experts.
In late November, Catalyst signs an MoU with the Govt. of Rajasthan, to set up its first “digital payment lab” Jaipur, a city of over 3 million residents. The goal is to systematically activate last mile digital transactions across consumers, merchants and their suppliers, make Jaipur into a “cash-lite” ecosystem, and then scale successful interventions across the country. This will amplify existing policy efforts like Jan Dhan Yojana, Direct Benefit Transfers, and development of the India Stack.
Catalyst launches a vernacular literacy campaign to help small and informal merchants navigate the complex and fast evolving landscape of digital payment solutions by making available credible, accessible and relevant information. To disseminate its content, Catalyst partners with Niti Aayog, the Confederation of All India Traders, Tally Solutions and iSpirt to take the campaign to over tens of millions merchants across the country.
WATAL COMMITTEE REPORT
DIGITAL PAYMENTS LAB
Based on learnings from a systematic digitization drive in a dense local Jaipur market, Catalyst sets up multiple digitization experiments across the merchant payment ecosystem, spanning supply chain payments, direct-to-merchant propositions, newspaper vendor collections, city-wide transit payments, and integrated digital finance in an urban slum.
Fintech for the Last Mile Incubator
To address gaps between existing products and unserved segments, Catalyst launches the ‘first of its kind’ incubator to promote innovative and scalable fintech solutions that address the needs of traditionally underserved users. It on-boards five exciting companies targeting varied user segments, employing different strategies, and leveraging different digital technologies.
Mapping the Merchant’s Mind
In partnership with People Research on India’s Consumer Economy, Catalyst publishes novel research on digital payments use, behaviors, and perceptions across different urban micro-merchant segments, including fixed store merchants, home-based businesses, individual service providers, and street & roving vendors.
Building further on its support to Watal Committee, Catalyst engages with its partner ecosystem to distill a set of case studies that address specific regulatory impediments that are holding back business model innovation in mass fintech applications. Report forthcoming.