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#5 | Hari — Millennials

By Lakshmi Ajayan and Dharmesh Ba

Short story

Hari is a 26-year-old, originally from Kottayam, who works as a Business Analyst at a SaaS company in Bangalore. Hari finished his schooling and graduation in Kerala after which he pursued his MBA in Mangalore. Hari’s father has played a large role in his financial journey by kick-starting his insurance policies and mutual funds. Hari has not yet started planning his long term goals but aims to achieve financial stability in the next 5 years. In his free time, Hari likes to unwind by browsing Reddit and playing games on his Play Station 4. This story captures Hari’s financial journey, technology adoption, and perceptions on data privacy.

Hari’s Financial Journey

Banking and Payments

  • Hari opened his first bank account in 2011. He took an education loan with State Bank of Travancore in Kottayam for his undergraduate course. The choice of bank was influenced by his father who worked at the same bank.
  • Hari was able to avail a relatively lower interest using his father’s employee perks. Hari mainly used this account to pay his college fees every semester. He used to use his debit card for his personal expenses in college. The card has been inactive for the past 3 years since he created a new bank account with HDFC. He now uses this account to pay his life insurance premium every month.
  • Hari completed his MBA in Mangalore soon after his Bachelor’s. He got his first job in 2017 and shifted to Bangalore. His employer referred him to HDFC to open his salary account. This account has been used as the primary bank account for his expenses from then on.
  • Hari has always liked the concept of a credit card. He was offered one from HDFC when he created his account with them. He religiously uses it for most of his expenses. He received a Diner’s Club card by default and sticks to it despite its limitations on not being accepted at all avenues:

L: When do you usually use your debit card?
H: I use it when somebody doesn’t accept my credit card. My credit card is from Diner’s Club and many Indian companies don’t accept Diner’s Club and Amex cards. The most accepted cards are Visa and Mastercard. I’m not sure about Rupay.

L: So if it’s not accepted at most places then what made you choose that card?
H: I like the concept of the credit card. If used properly, it’s very useful. So I always wanted a credit card but Diner’s club was never a preference. Actually, I never got an option to select. My father told me that the bank he works at has connections with Visa, Mastercard, Rupay and other card companies. Whenever someone requests for a credit card, they usually give a Visa card unless they specify that they want another. When I took mine, I had not specified what I wanted. And I just never bothered to change it after that.

Status Quo Bias: Status quo bias or default bias is when people prefer things to stay the same by doing nothing or by sticking with a decision made previously.

  • Hari likes to use his credit card for his payments so that he can have liquid cash in his account at all times. For this reason, UPI payment is a second choice.
  • Hari carries cash on him only for emergency purposes. If given a choice, he wouldn’t even make payments in cash. He withdraws cash every month only because his maid and his cook don’t accept digital payments.
  • It was interesting to know that digital wallets may have been Hari’s first preference if KYC verification was not a barrier.

“A digital wallet is as good as an extended credit card.”

L: Why do you prefer UPI payments over digital wallets?
H: Actually, I used to use Paytm wallet but they made KYC verification compulsory and I haven’t done it till now. I didn’t take the effort and time to go there and complete it. I was just being lazy. I think you have to go somewhere in person or request someone to come, but I never did it. So I can’t use Paytm and Phonepe wallets but I can use it for UPI payments. You don’t need KYC for that.

L: If KYC verification wasn’t compulsory, would you prefer wallets over UPI?
H: Yes, actually I would. Because then I can add money to my wallet using my credit card. So it’s as good as an extended credit card.

Monthly Expenses

  • Hari’s regular monthly expenses range from house rent and food to mobile recharges and subscriptions. For all his food expenses offline and online, he uses a Sodexo card. He got it through his employer and it saves him some income tax. All his other expenses are paid using his credit card.
  • Hari has saved his credit card details on multiple mobile apps like Ola and Uber. Contrastingly, he has consciously chosen not to save his netbanking login details anywhere for security.
  • Interestingly, even Hari’s choice of mobile apps for payment is influenced by whether it allows him to pay using his Diner’s Club card.

L: How do you pay your electricity bill?
H: One of my flatmates usually pays the electricity bill. It is usually put on Splitwise. If I have to pay the bill, then I use my credit card on Paytm. Paytm has the option to choose your electricity supply board. I can type my meter number and then choose the credit card option to pay.

L: Why don’t you use UPI apps for mobile recharges?
H: If my credit card is an option then I will always pay using that. In Airtel’s app, they accept my credit card so I pay by using that. If Bangalore Electricity Supply had their own app, I would’ve paid through that. But I don’t know if they have one.

L: How exactly does the Sodexo card work?
H: We can opt for it. We can decide whether we want the amount as money in our Sodexo card or as a part of our salary itself. When we get it through Sodexo, we don’t have to pay income tax on that amount. When we receive our salary at the end of every month, an amount is also added to our Sodexo card.

  • Hari has made multiple attempts to keep track of his expenses and has failed. He now chooses to just check his HDFC bank statements on his HDFC mobile app from time to time.
  • Hari uses and recommends Cred for his credit card bill payment. His excitement rose as he spoke about Cred. His onboarding story is a fascinating one where the founder of Cred acted as his decision influencer. But it also uncovered a limitation of its features:

L: How do you pay your credit card bill?
H: Earlier I used to use the HDFC mobile app. It was quite easy. You just had to click a few buttons and you’re done. But a year ago, I started using Cred. I used to follow Kunal Shah. I used to attend his talks. He started Cred after a long time so I was interested to know what it was. When I installed it, the whole thing was quite amazing including the way in which you log in and sign up. Everything was pretty cool. They have a feature similar to a scratch card where you can pull down a card and see how much money you have won. I have won some good amounts through that feature so I was hooked onto it. Initially it was quite fun. They had some good deals. They also have a feature where you can check your spending pattern, but that is weird because if I pay with my credit card through Paytm, it shows as ‘Paytm’. So I don’t use that feature much. Bill payment is quite good though.

L: Do you keep a track of your expenses and do budgeting?
H: No, I tried but I didn’t continue. When I started my job, I tried noting them down in a small notebook. I couldn’t continue that. I also tried the Evernote app. That also didn’t work out. So now I just look at my bank statements. As for budgeting, I don’t have any clear boundaries. If I go out more than once in a particular month, I’ll make sure that I will not do that again the next month. So I have some vague boundaries like that. If there are some particular expenses for this month, I’ll try to cut down on other expenses.

Investments

  • Hari’s journey into investing started during his CAT exam preparation days. He believed that trading stocks would help him understand the market and businesses better. Hari created a Demat account in SBI with his father’s help. But it was not a good experience. His rant emphasizes the importance of the role of design and UX in fintech. He is quite aware of options that he can switch to — like Zerodha.
  • Hari has 2 mutual funds. His father took the first one for him with SBI to meet a target at work. When he realized that it doesn’t qualify for tax savings, he explored more investment options. He also invested in a mutual fund with ICICI after consulting with his brother. But he now has an informal loan with his father because of it!

“I don’t like (stock) trading on my laptop. I have to invest a lot of time because I need to log in every time.”

L: How did you start investing in stocks?
H: This was in 2015. I was preparing for the CAT exam. So I wanted to know more about the industry and the market. It was pretty easy to get a demat account created at that time from SBI because my father worked there. It had very little paperwork so it was quite fast. But I’m planning to change it. The reason I haven’t been active is because SBI has one of the worst mobile apps ever. It was horrible. I tried using their website and recently I sold a couple of my shares. We have much better apps in the market now like Zerodha. I don’t like trading on my laptop. I have to invest a lot of time because I need to login every time.

L: How did you decide to take your mutual fund with ICICI?
H: I took the ICICI mutual fund 2 years ago. My father started the one in SBI in 2017 because he had to reach a sales target for the bank. The SBI mutual fund is not eligible for 80C. I didn’t know that until my first tax-reporting. So I started looking out for more options. My brother is my go-to person for financial advice. He had an ICICI plan which I compared with some other plans. It looked really good to me. It had guaranteed returns. I think the interest rate increases if you wait for 2 more years after 5 years of payment. My father and I made a deal. He had some money that he got for his retirement. So he paid the first lump sum installment. I have to pay it back to him at a 12% interest rate.

Loans

  • Hari’s education loan in 2011 made him create his first bank account. The choice of bank was an easy decision. His father was able to avail a low-interest rate as an employee of the State Bank of Travancore. He has been a constant support to Hari and even repaid a part of the loan for him. Hari doesn’t envision taking any more loans in the future yet.
  • Hari is comfortable availing no-cost EMIs using his credit card. He has used the option to purchase his TV and his Play Station 4. It was interesting to understand that Hari would never consider an NBFC for a loan in the future. He feels repelled by their aggressive marketing:

L: How long was the repayment period of your education loan?
H: I closed it by 2018 or 2019. For education loans, the repayment period starts after the course finishes but the interest accrues. While I was doing my MBA, my father was paying the interest amount until I got my job. Then, within two years I paid off the installments.

L: Was collateral required?
H: Yes, our land and house were the collateral. But then again, the interest rates were quite low since my father was working for SBI.

L: Would you consider taking a loan in the future from an NBFC?
H: Not unless their interest rates are quite low. Only then will I think about it. I don’t trust them that much. I would rather trust Paytm than Bajaj Finserv. They are too aggressive in trying to get more customers. They are actually expanding a lot. Everywhere, they have their easy EMI cards and their loans. All these websites like Amazon have them for their EMI options. Bajaj gives a card for it and that will be almost as good as a loan account. It’s like a credit card. Credit card is a type of loan.

Insurances

  • Currently, Hari has one health insurance policy and one LIC life insurance policy. His father’s influence is evident yet again as his first health and life insurance policies were taken by him. Hari terminated the health insurance policy taken by his father when he got a new one from his employer. He continues to pay the premium for the LIC life insurance policy which his father took for him.
  • Hari has not explored insurances as he has done with investments. His doubtful responses depict his lack of awareness regarding this financial instrument:

L: What was the first health insurance that you took? Why did you stop it?
H: I think it was Star Health Insurance. My father started it in 2016 when I was doing my MBA. From 2017 onwards I paid it for a year and then I stopped. I didn’t want to continue that because I already had a plan from my employer. I think it’s New India Assurance. It’s deducted monthly from my salary. I get tax benefits on it. I didn’t want two plans at the same time.

L: When did you take your LIC policy? How do you pay the premium?
H: My father took my LIC policy in 2016 as well. From 2017, I have been paying its premium. It gets auto debited monthly from my SBI account. I transfer money to that account approximately once in two months.

Personal Data Sharing

Hari doesn’t allow various mobile apps like Swiggy and Zomato to access his messages or location. At the same time, he is tactfully aware of workarounds to use these apps despite denying permissions. Hari’s habit of choosing the path of least resistance is met with contrast here. He is not willing to compromise his data in the name of convenience:

“I’m okay with typing OTPs but not with them (read: mobile apps) reading my messages.”

L: Have you ever changed your privacy settings on Facebook or Whatsapp?
H: Yes. When various platforms announced that they were changing their privacy agreements, I went through Facebook and changed a couple of things. I think it was about who can see my photos or so. For whatsapp, I was never bothered by my online status or blue ticks.

L: Have you ever read the terms and conditions/privacy policy of any app? Have you ever denied permissions for apps?
H: I haven’t read any privacy agreements. But many times, I don’t give access to permission requests. Zomato and Swiggy ask for your permission to read messages. I don’t give them permission but that doesn’t stop me from using the apps. Actually you can use a lot of features without giving access to your camera or messages. With access to messages, they read OTPs so that you don’t have to type in OTPs. I’m okay with typing OTPs but not with them reading my messages. Reddit asks for access to your camera when you want to do live videos. I have not given access to that.

L: Has it ever happened that you denied some permission and you couldn’t further use the app? What did you do then?
H: Yes, that has happened with Snapchat, I think. If I really want to use an app, then I give it permissions even though I wouldn’t be happy about it. If it’s not important, I won’t give permission and I’ll just delete the app. There are tons of games on Google Play Store who ask for access to your location. Access to location is a frequent request. Even Google Search asks for it but I haven’t given permission. Swiggy, Licious and other delivery apps ask for your location but you can deny that and just put in the address manually.

Goals and aspirations

Hari is currently focussed on accumulating a corpus of 5 lakhs in his bank account within 5 years. He would like to be financially independent in case of any emergency situations in the future. Hari lives in the present and does not have any materialistic dreams for the future yet:

L: Do you have any short/long term goals that you want to save up for?
H: Yes. I want to have liquid cash of a minimum of five lakhs in case I need to use it for emergencies. The next five years are a buffer that I’ve set for achieving that goal. I don’t have any long term plans. Even the five years is just a vague plan.

L: What are your dreams for the future?
H: I have an idea of the lifestyle that I want in the next three to six years. And that is to not have to worry twice about the lack of money for any situation. I don’t have any big dreams otherwise.

Credits

Check out our Research Series

About the Research

This documentation is a result of the in-person interview, along with the participants’ consent. The interviews might be conducted in their native languages and translated to English in the best possible way to reach a large audience.

Disclaimer: The identities of people and places in this documentation have been changed to honour the privacy of the participants.

About D91 Labs

This research was executed and documented by D91 labs. D91 labs is an open-source initiative by setu.co to help Bharat build great fintech products. We organize and publish user research, insights, and frameworks for fintech in India. Please follow us on medium for more exciting stories and insights on Bharat.

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