How This Payment Gateway Aims to be the Big Fish in Fintech Pond In today's cut-throat competition among increasing number of fintech start-ups, the challenge is also to stay relevant

Whether it was the shock of demonetization or the gradual, yet grand roll out of the GST, India has been waking up to a financial transformation quite often this year.

With the intent of going cashless, the government of India has been driving initiatives that promote digitization. And while many across the country try to figure out what's happening, smiling away in their offices were founders of e-wallets or payment gateways.

It is in such hard times that Harshil Mathur and Shashank Kumar find their constant validation. From operating from their parent's house in Jaipur to finding a space in every kirana store today through their payment gateway, the founders of Razorpay have come a long way.

The graduates of IIT Roorkee had started working on a side project around crowd-funding and it was then that they realized that merchant payments in India were not an easy task. Both of them left their high paying jobs, moved to Jaipur and started working on Razorpay.

The Challenges

The duo realized that most start-ups in India start with cash as the only method and only when they have scaled significantly, they turn to digital payments. And that's what they wanted to change. But it wasn't an easy task.

"The biggest challenge we saw was getting the bank approvals. We did our research and spoke to a couple of banks. But we didn't come from a banking background, we are pure technology guys. But, as we started working for Razorpay full time, we applied for the prestigious Y Combinator programme and we got in," said Harshil.

Hiring became the next challenge. Operating out of Jaipur, they found the right talent but not the experience. "As we started scaling up, we had to convince larger organizations to use Razorpay and that's when we hired our first sales head, who led enterprise sales for us," he added.

Getting the Right Experience

Having started off right after college, there were many things that were new for the duo. But instead of holding themselves back, the start-up brought in top executives from different companies to head various segments.

"We focused on getting experience on board. Be it target enterprise sales or the banking vertical or someone who can lead technology, we brought in the who's who of the industry to work with us," explained Harshil.

While it's often common to see founder refusing to let go of their reins, here the situation was different. And Harshil explained the same and said, "As the organization grows, you need to grow as well. You can't be attached to everything and there will be bigger problems that will need your attention. It's a constant process for evolution."

Staying Alive

In today's world of cut-throat competition, where the number of financial technology start-ups is increasing by the day, the problem now lies in staying relevant and ensuring that they are actually solving a problem.

"You have to start with solving a problem and then build a business around it. If you just want to build a start-up and then solve a problem, it doesn't work. There are many unique problems in India, especially in the payments sector that you cannot just copy from the West. You have to locally understand the problem," he explained.

Post demonetization, while most start-ups looked at solving problems of the consumer, they reached out to the merchants. But competition from rival start-ups never really mattered to them. "We were also one of the first platforms to enable UPI payments. The merchant doesn't care about the instrument used for payment, he/she only cares about receiving the payment. The common competition for all of us is cash and if we are able to turn into a cashless society, there will be ample opportunities for all to survive," said Harshil.

GST, too, brought in a lot more possibilities for them. "Merchants usually avoided digital payments to avoid taxation. But with GST and everything going digital, they just had another reason to switch to digital payments," he said.

The Future

With the future of fintech looking bright, Harshil and company are switching onto the speed mode. They are currently working with NPCI to enable Aadhaar-based payments. "Aadhaar will be a breakthrough technology because most of the people in the rural areas receive subsidy through Aadhaar and they remember their unique identification numbers. That's what will shape up payments in the rural ground. It's for us to enable acceptance among the users," added Harshil.

But it doesn't stop there. They also plan to go international by next year, having already taken the first step towards that by partnering with Telegram. "We are looking at markets that are similar to India's, the ones that face same issues as we do, yet are evolving rapidly. B2B payments is a huge market that is often not looked into but we want to focus on that completely," he concluded.