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Fin-tech oiling wheels of online carts. Matters?

Pushing ease of payments and de-railing frauds can be just the protein shake the doctor ordered for e-commerce kids going through a growth phase. Would Moms be convinced?

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Pratima Harigunani
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Pratima H

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BANGALORE, INDIA:

No, we don’t call them start-ups anymore. Unicorns, is more like it.

It would be hackneyed to mention again how e-commerce and online start-ups in India shook the landscape beyond recognition in a matter of few years. So much is discussed about the wings propelling these unicorns though that we forget to look down and consider how strong their hooves are.

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Technology may open new markets overnight but practical questions around logistics, supply chains, regulations, accountability, inventories, and financial fluidity are not sussed out in a day.

The sheer complexity, safety, speed and compatibility of an online swipe that enables an e-shopping click is one such question, and a big one at that.

Is that what players like LookUp, InnerChef, Teen Patti, Chai Point, Roadrunnr, Papa John’s, Knowlarity and LocalOye have been considering too?

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Harshil Mathur, an IIT Roorkee Graduate and CEO & Co-Founder, Razorpay that services over 5000 merchants in pursuit of some answers, spends a few minutes in getting into the seriousness and the implications of such eye-of-the-needle questions as well as some possible answers.

Tell us why and how Razorpay came about?

It is a payment gateway startup and Y Combinator alum. It was started in early 2014 after discovering the dismal state of online payments in India. The vision was to simplify online payments because working on an earlier project in a different space, I figured out that payment ecosystem in India is terrible and suffers with lot of technical issues and documentation. So we set about to solve these problems with a new answer.

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Is it similar to Paypal? Why would it be a good factor for online players?

No, it’s more like Stripe and we focus on B2B segment. The failure rate in transactions in online market can be around 30 per cent and both merchants as well as customers realize the inconvenience of this problem. Once a transaction fails, it leads to a lot of hassle and suspicion. More so and very seriously and even irreversibly, for someone who is daring to try the online payment part the first time. There is no way you can afford to ruin that experience. So it is a very strong part.

How do banks perceive such fin-tech solutions? As threat or support?

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Yes, perception can be sometimes a big issue. But that’s really a mindset problem more than anything else. Last one year has thrown up lot of changes and regulator has also played a good part. The digitally-savvy banks are embracing the change faster.

What other challenges dot this space?

Fin-tech terrain has been controlled heavily by banks, at least till two years back. Getting a banking permit was an issue to reckon with most of the times. Traditional players used to frown up working with start-ups. Like I said the fast ones and savvy ones have started setting new departments and are joining the new wave.

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Harshil Mathur, Razorpay Harshil Mathur, Razorpay

Fraud seems to be a constant word haunting this industry. What’s your view, specially with standards like HCE (Host Card Emulation), SE (Secure Element), Tokenisation?

A payment gateway faces heavy penalties so fraud and risks just cannot be taken lightly. We, on our part, use lot of APIs and tools. In India, merchant-side risk is as high as consumer-side one. Sometimes we ask for extension of settlement period. The issue in India is lack of tracking systems and consistent, universal data points that exist in the US. Hopefully, Aadhar initiative will bring some relief.

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Any views on EMV (chip-based technology) payment mode here?

The US has realized it to be a good move but India has done that much earlier. In India regulators and banks have always put security first and we focused on EMV early on. India has been an early adopter of pin-based and chip-based cards. That kind of impetus and approach to security is an encouraging part. In the online market, the first experience defines whether a customer will stick to it or not so reducing frauds and making the process smooth is crucial.

Apple Pay, Mobile wallets: Too soon, too late?

Payment is an ever evolving problem. No country has solved it completely, I opine. It is a good thing in a way that Indians have not moved to credit cards as pervasively as people in the US market, so that gives a lot more room for smartphones now. We will see many use cases in the next one or two years.

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