M for Mobile Money

M for Mobile Money

Anyone who has seen the latest Idea Cellular advertisement with Junior Bachchan as a tree would agree that we are on the brink of a mobile revolution. The ad’s social motive highlight – of conserving the environment by replacing paper with mobile phones – apart, the industry has surely achieved more realistic goals over the last decade. Mobile phones are no longer just for making calls. The value-added services (VAS) provided have their own market. It’s no surprise then that the BSNL sources suggest that these services in India are expected to rake in around Rs 18,000 crore by 2012, a 300 per cent increase from the current level. A strong market potential is waiting to be unleashed.

And capitalizing on this and taking VAS to the next level, Mumbai-based PayMate is making waves in the mobile commerce industry. PayMate is a mobile-payment solutions company that makes the cumbersome task of paying bills, conducting online purchases and even transferring money, a breeze. “Even before we actually formed the company, PayMate started off as this idea incubated in Coruscec Technology, which was a value-added services company,” recalls Ajay Adiseshan, CEO, PayMate. Adiseshan has been given the tag of a serial entrepreneur with good reason; he started two companies prior to PayMate— Coruscec and Webresource.

The first level of comfort comes from the fact that we associate ourselves with credible banks, which offer adequate security platforms and several processes are in place to ensure a secure network

Apart from being a user-friendly technology which works on any handset, a customer needn‘t pay for this service too. So if you are worried about having to invest in a Blackberry just to avail these services, you can breathe a sigh of relief.

Security concern

“The most common concern when it comes to conducting online transactions is the security, which would hold good for the mobile interface as well.  The first level of comfort comes from the fact that we associate ourselves with credible banks, which offer adequate security platforms and several processes are in place to ensure a secure network,” clarifies Adiseshan. The mobile is linked to your bank account without involving any security details. Once you register with PayMate, you are provided with a four-digit PIN. Every time you conduct an online or offline transaction using PayMate, you receive an auto IVR call back where you punch in the PIN number, which will deduct the said amount from your bank account. You can conduct mobile transactions right from paying restaurant bills, online shopping, electricity bills and mobile recharges.

Challenges overcome

PayMate’s early challenges were working with established players in the banking and telecom sectors and building a viable model around it. “We went and met the same people over and over again before they were convinced with the concept and decided to partner with us,” says Adiseshan. The hard work paid off when Citibank was roped in as their first client. PayMate started off as being the first mobile-based payment service in India and has grown well  since 2006, when it was started. “I think it boils down to the passion in your cause. A startup is a small entity compared to the bigger players and you have to build a certain credibility to get noticed,” feels Adiseshan. Their funding closure of nine million USD two years after their launch by prominent players in the VC industry—Mayfield Fund, Kleiner Perkins Caufield & Byers and Sherpalo Ventures, speaks for their quick progress. “It helps to have high profile VCs backing PayMate, since there is a level of comfort and credibility attached to it,” says Adiseshan. Speaking about raising more money, Adiseshan simply says, “We will be on the prowl soon.”

Unexplored segment

Moving away from basic transactions for shopping and related payments, another segment that is waiting to be explored is money transfer. Green Money Transfer is an interesting concept that allows the unbanked millions in India to send and receive money. In collaboration with Tata Tele Services and Corporation Bank, this service from PayMate lets you transfer money to any part of the country. Currently. this service can be availed from a Tata PCO only. They are still in their early days with close to 10,000 customers. “If you look at the target market potential here, and the options available to the unbanked for money transfer – postal services, banking channels or hawala – mobile transfer would be the most convenient and provides an ease in payment,” explains Adiseshan. “When you marry the legitimacy of the banking channel with the reach and penetration of the telecom sector and exploit that for a mass money transfer you have a powerful medium,” he adds. PayMate’s commitment with money transfer facilities is to bring financial inclusion to the unbanked.

Spreading its tentacles

After making an impact in the Indian subcontinent, PayMate has spilled over to other countries including Sri Lanka, the Middle East, Eastern Europe, Africa and North America. “We have a platform in place that we utilise in these countries. The next step is to facilitate cross-border money transfer,” opines Adiseshan. The U.S. has a large unbanked population, particularly Latin America, whom they hope to cater to. With an objective of being the leading provider in remittances, and getting into other banking services including micro-credit and micro-insurance, PayMate is a reason to cel(l)ebrate in India.