The growth of mobile-based commerce has changed the way consumers and corporates make payments in their ecosystem. Gartner Inc. says that India has over 250 million smartphones, which are a major source of inspiration for startups to build services. Payments have become central to mobile commerce, and investments have been poured into this industry. Recently, ShopClues acquired payment solutions company Momoe and Flipkart acquired PhonePe. The acquisitions were all stock payments, and sources add that these were less than $40 million. Of the 50 million registered small and medium-sized businesses (SMBs) in India, there are more than a million SMBs with revenues worth $1 million or Rs 6.7 crore that need payment solutions and qualify to pay corporate taxes.
Having these data points as a backdrop, Sirish Kumar, a veteran from Nokia, Motorola and PayPal chanced upon the idea of not just starting a payment solution, but also enabling social commerce (payment through chat and Facebook) and creating identities for these SMBs through social commerce. In October 2013, Sirish took a break from his corporate job in Singapore and travelled to Dubai to validate his idea. In three months he spoke to over 240 SMBs to understand whether there was a market for mobile-first payment solutions. "I tested the idea in Dubai because the usage of smartphones in Dubai is very robust," he says, adding that the product gained acceptance and by early 2014 he began to commercially roll out the solution in the UAE.
The company was born in Singapore and he aptly called it Telr—after the bank teller that helps customers—to resound with SMBs. He seeded the company with $250,000 from his own savings and from a couple of angel investors. Two years on and 1,000 customers later the company has raised $7 million from a clutch of private investors (undisclosed) and is already a $1-million business. It is yet to scale up in India and is investing all its resources in doing so. The team is close to 50 members.
"The phenomenal growth Telr has experienced over the past two years has been exciting for us to witness as investors," says John Sharp, Managing Partner at Hatcher, a venture capital firm, which invested in Telr.
Today, the Registrar of Companies holds records of 30,000 websites being registered as business. Several of these businesses are one-or-two-man operations that want to sell their product to businesses or consumers over the Internet. Mobile and social media are central to their products being catalogued and sold. Say, a young company is selling aromatherapy and has catalogued its products on Facebook. When the customer likes the product he may leave a message saying he wants to purchase it immediately. Telr will help the aromatherapy product company settle payments with their customer by sending a link or QR code or an email invoice asking for immediate payment. Now, because of the payment details, Telr can now go to banks and tell them that these SMBs have a great payment cycle. So, for banks this data means that they have a gold mine for loan disbursements and their non-performing assets can reduce. The business model for Telr is pay-per-transaction and also annual maintenance contracts with larger SMBs.
While digital payments become very popular there is competition. There are payment gateways, like CitrusPay and CCAvenue, - wallets, like PayTM and MobiQwik, and banks, and payment aggregators like FonePaisa. FonePaisa is the closest competitor to Telr and has already aggregated over 150 small businesses. It is yet to integrate on social commerce, but enables payment through all other technology solutions. "Digital payments is the future of Indian business and merchants will appreciate the value as they cater to a younger audience," says Ritesh Agarwal, Co-founder of FonePaisa.
According to consulting firm KPMG the payments industry in India is supposed to have a market opportunity worth $1 trillion. With the Unified Payment Interface coming to the fore—thanks to IndiaStack, an Aadhaar-based digital infrastructure solution—it's only a matter of time before we have billion-dollar consumer and business service companies emerging out of India. "In five years we will see mobile payments becoming a prominent force in the country," says Srikanth Nadhamuni, Chairman of Novopay, a financial technology company. He adds that adoption is the key to making payment technologies a success in the country.
Trends show that startups like Telr will make big money, by creating an impact on their customers