Jose Thattil is the CEO and Co-Founder of Phi Commerce. He has 20+ years of retail payments experience. Prior to founding Phi Commerce, Jose has worked with MasterCard, ElectraCard Services (ECS) & ICICI Bank. The core team at Phi Commerce are experts in the field of digital payments and credit. They have directly been responsible for some of the most innovative payment solutions that are standards in the Indian market today. This team was responsible for the design and roll-out of the solution underpinning the payments network of the largest bank in India as well as the largest outsourced credit card management program in the country.
This interview is part of the ‘Fintech India‘ series.
Cash is still a very dominant mode of payment globally and India is no exception. Experts cite multiple reasons such as cash brings anonymity, cash is cheap, cash is easily available. Despite, a buoyant push by the regulator, citizens of India are not embracing digital payments as expected. Some of the reasons being lack of acceptance infrastructure, lack of parity between digital payments versus cash, lack of awareness and trust.
According to us, one important reason is the way digital payments are deployed. Either they are not seamless to the internal processes of the businesses which are leveraging them or they are not frictionless from a consumer point of view.
To gain universal acceptability, digital payments should be adapted to the unique way in which consumers of varying businesses make payments.
The co-founding team at Phi Commerce plans to leverage their years of experience, deep understanding of the payments and credit domain and their expertise of implementing large scale projects requiring integration with diverse systems to create an omni channel platform – a platform which converges the offline and online business but is still not only able to cater to the unique payment requirements of each business but also present a consolidated view of the consumer transacting across channels thereby enabling businesses to engage with consumers and rollout personalised funded offers, promotions and finance schemes.
How did PayPhi come about setting your focus on this particular category? Please tell us a little more about the company’s beginnings as well.
The first opportunity was noticed in the (COD) cash on delivery mode of payment for e-commerce purchases.
A personal experience of one of the co-founders – Jose Thattil provided the early inspiration for PayPhi. Earlier, while living in Sydney he had gotten used to shopping online and prepaying online at the time of making the purchase. The same practice in India, led to a harrowing time while obtaining delivery for one of purchases. Repeated calls and a lot of aggravation preceded the delivery of a shipment from one of India’s most well-known shopping portals. Further investigation showed that the issue was even more acute with the smaller, or more speciality sites. Our experience clearly suggested that despite the challenges, even consumers with the means and intent to pay digitally opt for COD as a way to ensure timely, accurate, and quality delivery, essentially driven by lower confidence in eCommerce sites.
This led us to think how such consumers could guarantee delivery by making payments only on receipt of goods, yet be able to make payments digitally? It would be even better if they could complete the payment remotely if required. To add to that, a simple, intuitive consumer experience that did not demand any app download or call for PINs while still allowing the consumer to complete the entire transaction on their device would be just perfect!
This was the gap we set out to fill by seamlessly bringing together the e-tailer, the consumer, the bank, and the logistics company. This revolutionary eCOD solution underpinned by the core PayPhi transaction processing platform from Phi Commerce, provides consumers a simple, safe, way to digitally pay remotely, only on delivery of goods – bridging the trust gap, while still being “cashless”.
Besides eCOD, Phi Commerce has launched solutions for other sectors that have traditionally relied on cash as mode of payment. By enabling digital payment using multiple modes of payments which are best suited to the sector Phi Commerce is doing its bit to help Government achieve its objective of less cash society.
The company has a solution for offline merchants called Merchant Pay. This platform is primarily targeted to the untapped small merchant segment, who currently lack any acceptance solution and rely only on cash based payments from consumers.
What challenges have you had to work around at an early stage?
When we started our journey, the payments space supposedly seemed crowded. However, having been in the payments industry for more than 20 years providing solutions across 4 continents, the co-founders at Phi Commerce realised that most existing solutions were commoditized – one size fits all. We strongly feel that solutions have to be tailor made to various large use cases to generate usage volumes. The few solution providers that have been around for a long time and were successful were those that had the patience to develop solutions for the market of one. Deliberations with investors echoed the same sentiment that payments industry was under served with such adaptable payment systems.
Backed by supportive angels, Phi Commerce took up the challenge of building payments solutions which were optimized for varying businesses and thereby boost customer usage.
Thoughts on the present Indian fintech landscape? How does it compare to the rest of the fintech majors in the world like Hong Kong, Singapore, United Kingdom, Sweden, etc. according to you?
India is abuzz with the “less-cash” story.
The country has been clubbed under the ‘Break Out’ segment, according to the Digital Evolution Index 2017. The ‘Break Out’ segment refers to countries that have relatively lower absolute levels of digital advancement, yet remain poised for growth and are attractive to investors by virtue of their potential.
Fintech is playing a major role in propelling India towards digital advancement. There are many factors which are working in favour of fintech working in the space of displacing cash.
- Introducing of new payment methods such as UPI (a real time ACH payment), Aadhaar based payments (biometric authentication enabled payments) , BharatQR (interoperable QR code across networks such as Mastercard, Visa, NPCI), creation of systems such as India Stack will allow millions of people from Bharat to embrace digital payments
- There are digital payments targets to banks and government bodies so that the overall target of 25 billion digital transactions by end of March 2018 is met by the country.
- Mobile payments are growing in India. This is because of the rising smartphone penetration, increasing mobile internet penetration and rising disposable income. India is the second largest country next to China in terms of number of smart phone users. Research estimates say that there are about 300 million smart phone users in India.
- Growing e-commerce market. Indian market is expected to reach $64 billion by 2021, growing at a five-year CAGR of 31.2 percent.
- Growing demand from consumers for easy to use, simple, safe system to do a plethora of activities such online shopping, booking tickets, buying insurance products, getting loans etc.
- Collaboration of fintech with traditional banks
Which are the sectors in Indian fintech where you think there are untapped opportunities? How does it fit in with your product and growth plans for the immediate future?
We strongly believe that there is a lot of scope for enabling seamless and frictionless payments in our everyday life for e.g. making cashless payment only on delivery of online purchases, paying at the nearby store where we shop for our daily necessities, paying school fees, paying for utilities such as gas, electricity, DTH etc.
As mentioned above, the market today lacks an omni channel digital payments processing platform. A platform that brings together consumers online and offline spends as well as consolidates all the payments modes into a singular platform. In the long term, Phi Commerce plans to assist businesses engage better with their consumers and rollout personalized promotions and finance schemes.
Please tell us a little about your funding journey – the requirements & objectives in mind when you decided to raise a round/s; the fit you found or were looking for with your investors; what would you be looking for in the future as the business grows?
The company has received angel investment of around $1 million from a consortium of investors including payment industry veterans.
Over the coming few months, the company intends to raise its series A funding. The funding is intended to further strengthen the comprehensive technology platform created by the company and business expansion.
What advice would you give to other fintech entrepreneurs?
Technology is an enabler. So long as your solution/product addresses a core business problem or requirement you are bound to succeed.