Building Indian Mobile Banking: mChek CEO Sanjay Swamy (Part 4)

SM: When you joined, was it a commercially viable solution?

SS: There was a big gap between the concept and a commercially ready solution. We had investments and a team and had to take the idea and build it into a large-scale enterprise system. That took 18 months.

SM: What timeframe was it?

SS: That brings us to the end of 2007.

SM: How much had been invested in the company?

SS: Rajesh and Tim Draper had invested $5 million. There were some other investors as well who had previously invested. Today we have about 70 people in the company, 50 in Bangalore and 20 in datacenter operations.

SM: Tell me more about how it works today. What were the pieces you had to bring in to make it a scalable solution?

SS: There are a lot of interesting challenges in any business. It is important to understand that while you may build the absolute best product in the space, the bigger challenge is that people need to get the product and use it. It is very important to ensure there is a means of instant gratification. It may not expose you to all of the features and capabilities, but at least the customer can touch it now. That is what we had to do. We had to simplify the product and get it out there.

The product is a very broad platform. It can be used for any form of payment: merchants, friends, utility bills, etc. As long as the other side is equipped to receive, you can send. The question is, how do we open things up so we can target the existing install base of merchants with minimal effort yet make it available to consumers and let them sign up with their mobile phones. If you have a mobile phone and a credit card, you can start transacting in a matter of 30 seconds. Earlier the model required a new SIM card, a trip to your bank, an application form, and a PIN sent in the mail. Nobody would adopt it. We then decided to offer one compelling application. It did downplay the product, but it made it accessible.

We moved the product to a model where you just send a text message. It immediately started a process where you could create a PIN, register your card and then 30 seconds later pay your telecom bill. That payment would then immediately be reflected in the telecom’s billing system. It was one small application, but it was absolutely seamless and had instant gratification.

This product was launched in September of 2007 all over India on Airtel. You needed a Visa or MasterCard from any bank. Within months, we got the Best Product card at the GSM association annual conference in Barcelona.

SM: How many users did you get through the process?

SS: Everything goes through an adoption curve. If any product has value over a period of time, early adopters will be the first to use it. The numbers are probably a few hundred times what they were in the early days. We got to 1,000 users in the first month. We then had about 10,000 three months later, and today we have about 250,000 users. This growth does not happen in a linear way.

At the end of our first week of business we had only processed a lakh, and I was disappointed. My telecom partner looked at it and said “Wow, this is great. Let’s take it national”, and I was amazed. However, that team had launched other products and they had experience. That is one of the benefits of working with large companies.

This segment is part 4 in the series : Building Indian Mobile Banking: mChek CEO Sanjay Swamy
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