Keep your wallets at home and go cashless with Momoe


Going cashless isn’t a distant dream but almost a reality in some parts of the country today. At least in a city like Bangalore, you have the luxury of cab wallets, e-commerce wallets, phone recharge wallets, and now to add to it, the comfort of cashless payments at most restaurants too. You can now get out of home without a wallet! – hail a cab with your phone, pay at a restaurant with your phone, watch a movie and very soon pay for your groceries on the way back as well.

The newly launched Momoe app enables users to pay with their smartphones at restaurants across urban areas of Bangalore. With the Momoe app, users can see live tab, split bills and pay on the phone without having to wait for the bill to arrive at the table. With the recent consumerization in India, eating out has become a part of our weekly routine. The average transaction sizes on Momoe (~Rs. 1500) are a case in point. This explains the team’s choice of restaurants first. Having said that, they will soon be expanding their coverage beyond restaurants to grocery stores, apparel and other retail outlets.

Started by Karthik Vaidyanathan (IIMA, Bain, Free Energy & Qualcomm Ventures) along with Utkarsh (Designer from IITB, Honeywell, BPL Sanyo & Godrej), Ashraf (Chicago Univ & TopCoder), Ganesh (IITB, IIMB, Bain, & Honeywell) and Neelesh (IITK, IIML, Wipro, TI & Honeywell), it's a team with power packed experience. They are well supported by seven employees across tech, merchant acquisition, customer acquisition & operations.

The mobile phone is ubiquitous. It has become everyone's personal device for all forms of communication and transactions. Today, we are very comfortable recharging our balances over mobile to transacting on e-commerce websites via mobile. Riding on the same wave and understanding the user behaviour patterns, the team was quick to realise that people will pay for their food & drinks through their phones.

The form factor of mobile phones allows presenting bill information in a convenient form at the right time and allows linking different payment options, eventually making it convenient for the user. A mobile payment in the real world is a complete white space that was the real motivation behind the team’s decision to step into this field.

Sharing his experiences of starting up, Karthik says,

With Momoe, we provide a smooth and simple way for people to pay. We believe mobile payments will happen and Momoe will spearhead the change. Changing user behavior is challenging but if you believe that’s where the world is headed, triggering the change can be very fruitful. We conceptualized the product last December and started working on it full time since April. We launched the product to users in August. It’s been great fun taking a concept and making it into a product, convincing people to build the product with us and now acquiring users and merchants.

At restaurants, Momoe allows people to view their live tab through their meal, split bill with friends and pay without having to wait for the bill. In due course, the waiter productivity will also increase, as he only needs to focus on taking the order, upselling, and customer service. Going forward, the team aims to eliminate cash handling for restaurant home deliveries. Adds Karthik,

Money will soon just be a number on your phone. Your wallet will become redundant. The rationale being the invention of the smartphone and the time we spend on it. If Momoe was accepted at all places, cashless reality will be here. Our objective is to accelerate this.

The team is looking at many potential use cases focused on real world transactions where the mobile phone can disrupt the payment process and convenience the user. At grocery and apparel stores, Momoe will enable queue busting. They also intend to power e-commerce, where Momoe can reduce cash handling.

As we move forward towards the digitalization of currency, bank balances are mere numbers on the bank’s app on user’s smartphones. Transfers are also being done with a few clicks as IMPS/ NEFT transactions. This is the exact landscape where Momoe believes they will be able to eliminate the day to day cash transactions and give users a seamless experience.

India is a great place for all payment related entrepreneurs to startup given the low penetration of credit cards and also surge in number of smartphones. Internet connectivity is getting better and data packages are becoming affordable. Another interesting trend to notice in India is rising consumerization; people’s spending powers have increased.

But the path towards cashless economy isn’t a cakewalk. RBI’s strict regulation of two-factor authentication does hamper the user experience but then security can’t be compromised at the same time. However, RBI’s policies and recent updates do suggest that it might enable single factor authentication for low value transactions. If this regulation is passed in the coming months, we would witness a great revolution in the mobile payments space.

Having launched only a few weeks back, the app has been getting good traction - 3000 downloads with more than Rs. 10 lakh worth transactions. About 10% of its users have come back, which is a good repeat usage rate, considering the market it operates in. This really serves as a confidence booster for the team considering the behaviour change of shifting day-to-day payments to mobile.

Given the dynamics of hospitability industry, restaurants do need more channels and means to value their customer and provide a rich experience. The team has been able to serve this problem for restaurants offering a unique experience throughout the dine-in process at the restaurant. Further, behind Momoe is a powerful CRM engine. Merchants can reach out to their high spending customers, target repeats, run offers for specific customer cohorts, and offer loyalty programs etc. There are no sign up fees or monthly charges for merchants. Their revenue model is primarily transaction fee that is only slightly higher than the regular transaction charges for card-present transactions.

User acquisition is one of the most difficult task startups face these days. The home screen real estate is hot and to find a spot on the user’s smartphone screens is getting more and more challenging. The team has been actively adding more merchants on board to give users a wide range of options to pay at.

At present, most of the user base has been organic owing to the in-store branding that the team has been focusing on. On every download, the user gets Rs.100 credits that she/he can redeem for the first bill. At some outlets, the team has been giving free beers on use of Momoe for payment. Momoe plans to run a Free Beer at your nearest bar campaign in a few weeks. Free Beer is something that could click with most users. Acquiring customers with offers seems to be one of the big emerging trends these days.

The Momoe team wants to be a vertical agnostic mobile payments app. Restaurants is only the beginning. Momoe powering transactions at grocery chains, apparel stores, and e-commerce would soon be a reality. The team will soon release a merchant-focused app to give them a platform to collect unorganized payments. They will be starting operations in other Indian cities in a quarter or so once they have a good merchant network in Bangalore. The team also believes that Momoe is a potentially international business. While merchant acquisition and operations is very local, the latent need to pay with the mobile phone is there everywhere. After they prove the model in India, they may look at South East Asia and Middle East as potential new markets to enter.

We believe Momoe is trying to provide convenience to users and can potentially change the way people pay.