Building Indian Mobile Banking: mChek CEO Sanjay Swamy (Part 3)

SM: When did you finally move back to India, and when did you decide to do mChek full time?

SS: We moved back in 2003. Initially, I came to the conclusion that the business was not viable at that point, largely due to Indian regulatory issues. I ended up starting up the Indian operations for Ketera from scratch. I tried to make that as exciting as possible. When most companies set up operations in India it is typically as a back office, doing the less creative tasks. I decided we would not hire anyone whom we would not hire in Silicon Valley. We set up a Valley-style culture in India, which at the time was unique. You really need people to believe in the business first. During the annual performance reviews, employees had to present the business to me as if they were salespeople. The smartest engineers had trouble explaining the business. It really worked, however, because once they knew we were serious about them understanding the business they took it to heart. People who understand technology and understand the business come up with the best technology. It is typically not one or the other.

We also did something similar to the Google 20% model, where people were able to do their own projects and see how they could impact the business. It was fascinating to see the number of unique ideas that led to patent filings, all of which stemmed from India. When you empower people to think and develop solutions, there will be mistakes made. So be it.

SM: How long did you run Ketera operations?

SS: I did that for a couple of years. Towards the end of the second year I got a call from an angel investor about mChek. It was a funny twist of faith because mChek was not my prototype, but I had built a prototype in that space. The opportunity came, this time via an investment team that already had a regulator-approved technology.

SM: What were the regulatory issues?

SS: The regulation in India is that a non-bank cannot take a deposit from a consumer. When you open a PayPal account in the US, you can transfer money into that account and send it to a friend who has a PayPal account. That person can then either use the funds or transfer them into their own bank account. This is not allowed in India. The entity that takes the deposit has to be a bank. That means we have to work with the banking system and the money must reside there.

SM: This team you joined had already figured that step out?

SS: Yes. They had built out a concept on the cell phone. They were people who work in the space; some of the founders are still with the company. One is John Kattakayam, who has worked a lot in the payment card industry space. The other co-founder is Bharavi Gade, the technology architect of the system. He has done a lot of work in the open source point-of-sale industry. The team had a lot of experience and credibility in the industry. They really understood how payment networks operated and were able to successfully identify a way to execute those transactions via cell phones.

This segment is part 3 in the series : Building Indian Mobile Banking: mChek CEO Sanjay Swamy
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