Saurabh Suman had a successful business running for close to 14 years. Being in the web application and ERP solution development space, his previous company, Candeo Tech, had created over 900 websites for businesses over this period.
But as Saurabh says, life has its ways of testing you.
In 2014, he saw his successful business derail and move towards an unexpected doom. The flow of projects ceased as developers in the market preferred freelancing and taking projects from clients directly rather than working for organisations. Eventually, after a few months, the business died a slow but inevitable death.
It took a personal toll on Saurabh.
It was then that the real crunch came. With close to nothing, Saurabh had to part with most of his belongings, including his car, which was his first cherished purchase after his marriage. Living in a posh society, Saurabh used to pay close to Rs 7,000 as housing society maintenance.
Unable to procure the amount, he wanted to pay the maintenance with his credit card. That’s where he really got his next idea to start up.
Being informed that there was no real mechanism for him to do so, Saurabh wanted to find ways to use the liquidity of his credit card.
Making it a reality
On approaching banks, he realised that the cards could be used for payments for services and goods only. Getting right back up again, in February 2015, Saurabh started Paydeck solutions. During the process, he broke his fixed deposit of Rs 18 lakh to fund the company.
So, what does Paydeck do?
Paydeck is a website that allows individuals to use the liquidity of their credit card for either service-oriented or goods-related payments. This includes rental, housing society maintenance and even tuition fees payments. Saurabh explains,
Let’s say you have a credit card for a long time, and you need to use your credit card for a payment where there are no mPoS (mobile point of sale) machines. That is where Paydeck comes into the picture, allowing you to make these payments.
On the other end of its solution, the product also allows individuals to collect these payments from credit cards without having an mPoS solution.
We are enabling professionals that come under the SoHo (small office or home office) module. This can include event managers, professional photographers and tuition teachers. We let these professionals accept payments through someone’s credit card.
Only online as of now, the firm is looking to launch its app in the next two to three months. The solution also allows customers to automate the payments, where a set recurring payment can be done month after month.
In the month of June this year, Saurabh was joined by co-founder Tarang Agarwal.
How does it work?
On signing up on Paydeck, the solution asks for PAN card details and does an OTP verification to onboard a customer.
The PAN card details are further used to verify whether it is the same person’s credit card. Putting in the PAN card details also allows the company to be sure that the payer is not transferring money to their bank account, which would be linked to the same PAN card.
There is also a vault system, where the payer can save his credit or debit card details. Further, a service fee of 2.5 percent is levied on the payer for making a transaction on Paydeck.
There are two options from the payer perspective. During the process, the system asks for the details of the receiver of the payment and the reason behind making that payment.
The money is usually transferred to the beneficiary’s account in two days. Saurabh says that there are different models for this. Based on the volume of the money transferred, the transaction might take one to two days to reach the beneficiary.
The average size of payments made on the platform is Rs 10,000, with big ticket payments going all the way up to Rs two lakh.
Launching the product in the first week of February with an MVP, the firm usually sees Rs 70 lakh to Rs 1.25 crore in transaction volumes monthly.
For receiving payments, the payee can either send an invoice or a quick request to the payer through an e-mail or a mobile link. This way, according to Saurabh, the solution lets even the unorganised players come under the gamut of using online payments.
The firm has partnered with IndusInd bank for providing them payment gateways as well as HDFC for payment settlement. Further, the firm accepts all Mastercard and Visa cards from any bank.
At present, the firm’s volumes are growing by 10-20 percent month-on-month, closing around 500 transactions on average every month.
The firm has been approached by several venture capitalists and is currently making close to Rs one lakh in monthly revenues.
It should be noted, however, that in a market with only 25 million credit cards, there seems to be limited scope for these entrepreneurs unless they keep innovating to add other payment mechanisms to their services.
But the good news is that the payments space seems to be the hottest in India, gathering almost $867 million (as of July 2016) in funding over the last one and a half years, according to YourStory Research.
Paydeck will have to open the scope of its services and try multiple models, but as of now, the firm remains fairly unique in terms of its value proposition in the market.