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Reliance Jio Surpasses 400M Subscribers As It Ponders Heading West

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Alibaba Will Have Early Start To Singles Day In November

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Home Is Where The Package Is: Merchants Bring Last-Mile Delivery In House—And To The House

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FIS President: B2B Payments Transformation Needs Strong Value Proposition

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FIS President: B2B Payments Transformation Needs Strong Value Proposition

With the worst of the COVID crisis hopefully behind it, financial services giant FIS is now on the lookout for something that will utilize its now fire-tested ability to respond quickly to customers’ changing needs.

According to Bruce Lowthers, president of banking and merchant solutions at FIS, the key challenge the industry currently faces has to do with creating a strong value proposition that goes beyond just replacing a paper payment method.

“We need to find a way to create something cool that solves a problem and helps our clients so they can get better and more efficient at running their businesses,” Lowthers said to Karen Webster. “The reason things haven't accelerated faster than they have in the past is that no one has come together with that really compelling value proposition to make the move."

In addition, Lowthers said the drive to find new ways to make clients’ lives better has caused him to be “very bullish on the B2B space.” Although unwilling to give specifics on what the next “killer app” from FIS might be, Lowthers simply said he sees a lot of opportunity in B2B payments.

So, stay tuned.

Keep The Trains On The Tracks

This mindset pivot at FIS, of course, follows an unprecedented period of adjustment, which Lowthers said started out as simply “trying to keep the trains on the track” in the face of an immediate and abrupt shift to remote working for their customers – and has now morphed into finding new ways to add value to what they do day-to-day. It’s a process that would not have been possible, Lowthers said, if FIS hadn’t embarked on its own modernization process years ago.

“Obviously, we had no idea that a pandemic was coming, but the steps we took positioned us very well to make these pivots, and helped to drive the critical infrastructure that our customers needed, both on the merchant side and the banking side,” Lowthers noted.

PPP Platform Drives One Million Jobs

One area of recent accomplishment of which Lowthers is especially proud involved the company’s rapid build of a new PPP (Paycheck Protection Program) platform to deliver over $15 billion in loans to merchants, who used the funds to save a million jobs. Lowthers has also seen a surge in demand from merchants looking to go omnichannel, get digitized and drive commerce, in a business where 70 percent of transactions were previously done in-person.

“So there's been a lot of activity on the merchant side and on the financial institution side, and I think there will be a blossoming of new products coming to market,” Lowthers said.

Paper Checks – Not Dead Yet

Contrary to conventional wisdom, Lowthers said, one old business that is not going away anytime soon is paper check processing. While he thinks the long-term downtrend in paper checks will continue, he predicts that it won’t happen rapidly.

“The death of the check has been proclaimed now for a long, long time, yet it doesn't seem to go away,” Lowthers said, noting that FIS is the largest check processor in the country.

Another trend Lowthers is currently analyzing is the degree to which newly formed digital habits will retain their hold as things start to normalize, or whether things will go back to the way they were before.

“It will be fascinating to watch it unfold over the next six or seven months and see what habits stick in our new economy,” he said.

At the same time, Lowthers said the COVID era has been a tremendous internal catalyst at FIS, triggering a mindset change that has benefited the firm.

“[COVID] has really unlocked the art of what's possible for us,” Lowthers said. “If you had asked us before the pandemic if we could pivot and have everybody remote within five days, I probably would've said no way.”

But now, with rapid response projects under its belt, like the PPP platform that went from ideation to delivery in less than 70 days, there’s been an awakening of what is possible. “It unlocked [the reality that] we're capable of moving exceptionally fast,” Lowthers said.

And so as FIS winds down a year that has been filled with unexpected challenges, Lowthers is also looking forward to a new year filled with opportunities: “We’re very excited about what we can do in 2021.”

Reliance Jio Surpasses 400M Subscribers As It Ponders Heading West

India’s telecom giant Reliance Jio topped 405 million subscribers in the third quarter and is now the first operator outside of China to cross the 400 million mark in a single-country market, according to a TechCrunch report on Friday (Oct. 30).

The 10-month-old startup founded by Mukesh Ambani, India’s wealthiest man, posted a net increase in profits of 12.85 percent on a quarter-by-quarter basis, totaling Rs 2,844 crore for the quarter ending Sept. 30, according to the filing. Comparatively, last year’s profit was Rs 900 crore.

Average Revenue Per User (ARPU) is Rs 145, up from last quarter’s Rs 140. Jio said that crossing the 400 million subscriber mark makes it the world’s first telecom operator outside China to cross that milestone in a single country market.

Jio's revenue from operations spiked by 33 percent to Rs 17,481 crore. During the same period last year, revenue from operations was Rs 13,130 crore. Jio also reported that its quarterly EBITDA run rate crossed $1 billion and net profit surged to $409 million.

“The company has evaluated the implications of the COVID-19 pandemic and has determined that there is no significant impact on its financial position and performance,” the company said in its filing. 

Reliance Jio counts Facebook and Google among its 13 international investors and also said average revenue per user is Rs 145 ($1.94), up from $1.88 in the second quarter. Across the past two quarters, the startup said it added 30,000 people to its workforce.

Jio Platforms said it is deeply focused on developing a 5G solution that is open and has “interoperable interface compliant architecture” with a virtualized RAN.

“This is intended to fast track the roll out of indigenous 5G network infrastructure and services in India. Qualcomm Technologies and Jio achieved over a 1 Gbps milestone on the Reliance Jio 5GNR solution with a Tier-I carrier in the US,” Reliance said in a statement, per the Indian news outlet The News Minute.

Jio Platforms, a subsidiary of Reliance Industries, operates several tech subsidiaries including JioMoney, JioTV, JioMusic, cloud services, gaming, healthcare and more.

Kiran Thomas, president of Reliance Industries, said in an earnings call that the company has expansion plans outside of India but no timetable has been established.

Between April and May, Jio said that Big Tech and private equity had invested $10.4 billion in the platform in exchange for 17 percent of the company. At the time, Jio had 388 million subscribers.

Earlier this month, the Abu Dhabi Investment Authority (ADIA) announced it was making a $750 million investment in the Reliance Industries subsidiary Reliance Retail Ventures, giving the Abu Dhabi sovereign wealth fund a 1.2 percent stake.

Despite the jump in total subscribers, the company has had to deal with the fall-off of active users. Data from the Telecom Regulatory Authority of India (TRAI) showed a three-year low of 78 percent, down from 84 percent a year earlier.

Alibaba Will Have Early Start To Singles Day In November

In a move that will likely see a large rise in sales, Alibaba Group Holding Ltd will begin its Singles Day shopping event ahead of schedule in 2020, Reuters reported Friday (Oct. 30).

This year’s mega event is being looked at as a way to measure how formidably consumer demand is rallying in China in the midst of indications that a rebound in household spending has begun widening.

Alibaba will provide two shopping periods. In addition to its usual Nov. 11 shopping period that lasts for 24 hours, the company will also provide a new time between Nov. 1 and Nov. 3. The company says it will debut over 2 million new items — two times the amount in 2019.

A partner at the Full Jet consulting firm in Shanghai, Sam Coopersmith, said per the report, “The longer 11-11 lasts, the more opportunity they have to make money.”

Wanqing Consultancy CEO Lu Zhenwang, who is an independent online shopping expert per the report, foresees the eCommerce company’s gross merchandise volume (GMV) expansion to be slight — at approximately 10 percent to 20 percent in contrast to 2019.

Chris Tung, chief marketing officer for Alibaba, said per the report on Thursday (Oct. 2) that he foresees COVID-19 to fuel sales of luxury merchandise as international travel restrictions stop consumers in China from buying in other countries.

The news comes as this year’s Singles Day shopping event could turn out to be a disappointment for some U.S. brands per a new AlixPartners poll.

Most of the Chinese consumers the firm polled — a strong 57 percent — say they will purchase fewer U.S. brands and items on Singles Day on Nov. 11.

A much smaller portion of those surveyed say they intend to purchase fewer European items and labels in 2020, at just below 40 percent.

A big 82 percent of those polled indicate they intend to purchase items through cross-border online shopping, with Chinese consumers still appreciative of the quality of foreign labels and merchandise.

Home Is Where The Package Is: Merchants Bring Last-Mile Delivery In House—And To The House

The great digital shift hits us where we live, literally.

In an interview with Karen Webster, Khaled Naim, co-founder and CEO of Onfleet, which provides last-mile delivery management software to merchants, said year-over-year delivery volume has been surging amid the pandemic, with triple-digit increases in some segments, double-digit increases in others — and no signs of stopping.

Onfleet data shows that, as measured from the end of February through the end of August, it saw volume gains in nearly every segment supported on its routing and dispatch platform, from retail and commerce (up 137 percent) to cannabis (up 76 percent) to pharmacy (up 36 percent). The only decreases, the company said, came in catering, B2B food and laundry, all down double-digit percentages.

(Side note: Desserts and novelties, the edible kind, saw the highest growth, at more than 182 percent,  indicating that stress eating is being well supplied.)

The explosion in volume across most segments shows that in addition to the well-publicized pivots to curbside pickup and buy online/pickup in store,  consumers increasingly want the items they buy delivered right to the doorstep.

“We saw massive spikes in May and April, but the demand continues to grow.  Businesses are being built, or existing retailers are pivoting their businesses and expanding, or extending, to accommodate consumer demand and expectations,” he said.

Regardless of region or country (Onfleet operates in 90 countries), the delivery volumes trend up where lockdowns and virus infections increase.

The pivoting and expanding is leaving some retailers stretched — with not enough money or staff on hand to support full-fledged delivery operations.

That translates into supply constraints, said Naim. To compensate, that means retailers are refusing to accept new business altogether or add surcharges to help defray delivery costs.

Increasingly, he said merchants are turning to Onfleet to help manage their own delivery operations, or collaborate and schedule with local, third-party delivery services providers.

In terms of mechanics, Onfleet’s offerings span smartphone apps for drivers, a digital dashboard geared toward dispatch operations and automatic, real-time tracking for the end recipients.

The company maintains that optimizing routes and deliveries can save costs for the merchants leveraging Onfleet’s logistics software — reducing delivery costs by up to 50 percent and helping shorten the actual last-mile treks to consumers.

Food And Beverage And The Some B2B Pivots

Among the biggest spikes the firm has been seeing, said Naim, has been in the food and beverage industry, especially within the restaurant delivery sector.

Many of those eateries are partnering with DoorDash, Postmates and Uber Eats, but they’re looking to have more control over this cost center and not give up as much margin to the food delivery aggregators who can snag 30 percent commissions.

Though a high-level view may hold that Onfleet competes most directly with the aggregators, Naim told Webster that the company’s direct competition lies mainly with the manual pen and paper processes, the spreadsheets that firms use when they’re managing their own delivery drivers.

There are other delivery software platforms in the space that Onfleet competes with more directly, but over the long-term, the company looks to strike more partnerships such as one in place with Olo, which powers digital ordering for restaurants. Olo handles the point of sale integration for eateries and which integrates with Onfleet’s dispatch operations.

“We're starting to see more of a hybrid approach,” said Naim of restaurants, and where Onfleet’s integrations allow orders to be served by the eateries’ own staff and fleets.  “So they're working with third parties, but also doing a lot of their own deliveries in house.”

By and large, he said, delivery demand will continue to increase within the restaurant space.  It’ll be hard for many restaurants to have in person, outdoor dining in place through the winter months.  And in terms of longer-term trends, PYMNTS recently found a majority of consumers, at more than 80 percent — state that their online ordering habits will remain online (in whole or in part) after the current health crisis subsides.

The company is also expanding its customer support and engineering staff, and said Friday that it raised $14 million in a Series A funding round to help support that growth. Looking ahead toward the roadmap into 2021, with the new funding in hand, Onfleet is in the midst of talking with firms like Square and Toast to integrate point of sale capabilities for small and local merchants.  Having that integration would help those smaller firms sidestep the complexities of entering orders into multiple systems, he noted.

As the great digital shift continues to provide merchants new revenue opportunities, logistics software such as on offer from Onfleet, according to Naim “fills a gap, helping any retailer, making it easier for them to offer fast, affordable, even ‘delightful’ delivery to their customers.”

FIS President: B2B Payments Transformation Needs Strong Value Proposition

With the worst of the COVID crisis hopefully behind it, financial services giant FIS is now on the lookout for something that will utilize its now fire-tested ability to respond quickly to customers’ changing needs.

According to Bruce Lowthers, president of banking and merchant solutions at FIS, the key challenge the industry currently faces has to do with creating a strong value proposition that goes beyond just replacing a paper payment method.

“We need to find a way to create something cool that solves a problem and helps our clients so they can get better and more efficient at running their businesses,” Lowthers said to Karen Webster. “The reason things haven't accelerated faster than they have in the past is that no one has come together with that really compelling value proposition to make the move."

In addition, Lowthers said the drive to find new ways to make clients’ lives better has caused him to be “very bullish on the B2B space.” Although unwilling to give specifics on what the next “killer app” from FIS might be, Lowthers simply said he sees a lot of opportunity in B2B payments.

So, stay tuned.

Keep The Trains On The Tracks

This mindset pivot at FIS, of course, follows an unprecedented period of adjustment, which Lowthers said started out as simply “trying to keep the trains on the track” in the face of an immediate and abrupt shift to remote working for their customers – and has now morphed into finding new ways to add value to what they do day-to-day. It’s a process that would not have been possible, Lowthers said, if FIS hadn’t embarked on its own modernization process years ago.

“Obviously, we had no idea that a pandemic was coming, but the steps we took positioned us very well to make these pivots, and helped to drive the critical infrastructure that our customers needed, both on the merchant side and the banking side,” Lowthers noted.

PPP Platform Drives One Million Jobs

One area of recent accomplishment of which Lowthers is especially proud involved the company’s rapid build of a new PPP (Paycheck Protection Program) platform to deliver over $15 billion in loans to merchants, who used the funds to save a million jobs. Lowthers has also seen a surge in demand from merchants looking to go omnichannel, get digitized and drive commerce, in a business where 70 percent of transactions were previously done in-person.

“So there's been a lot of activity on the merchant side and on the financial institution side, and I think there will be a blossoming of new products coming to market,” Lowthers said.

Paper Checks – Not Dead Yet

Contrary to conventional wisdom, Lowthers said, one old business that is not going away anytime soon is paper check processing. While he thinks the long-term downtrend in paper checks will continue, he predicts that it won’t happen rapidly.

“The death of the check has been proclaimed now for a long, long time, yet it doesn't seem to go away,” Lowthers said, noting that FIS is the largest check processor in the country.

Another trend Lowthers is currently analyzing is the degree to which newly formed digital habits will retain their hold as things start to normalize, or whether things will go back to the way they were before.

“It will be fascinating to watch it unfold over the next six or seven months and see what habits stick in our new economy,” he said.

At the same time, Lowthers said the COVID era has been a tremendous internal catalyst at FIS, triggering a mindset change that has benefited the firm.

“[COVID] has really unlocked the art of what's possible for us,” Lowthers said. “If you had asked us before the pandemic if we could pivot and have everybody remote within five days, I probably would've said no way.”

But now, with rapid response projects under its belt, like the PPP platform that went from ideation to delivery in less than 70 days, there’s been an awakening of what is possible. “It unlocked [the reality that] we're capable of moving exceptionally fast,” Lowthers said.

And so as FIS winds down a year that has been filled with unexpected challenges, Lowthers is also looking forward to a new year filled with opportunities: “We’re very excited about what we can do in 2021.”