Wallets cannot succeed on a standalone basis: Sirish Kumar

He was the CFO for PayPal in ASEAN and India. A Chartered Accountant by profession, he started off his career with Cargill, worked with Motorola in senior leadership roles and later joined Nokia Solutions and Networks as the Senior Business Finance Controller for APAC.

This year he’s won the title of ‘Most Promising Entrepreneur of 2016’ at the Asia Pacific Entrepreneurship Awards. Meet Sirish Kumar, co-founder and CEO of Telr. His company offers a payment gateway that instantly enables businesses to accept and manage online payments via web, mobile and social media.

Business Insider caught up with Sirish to chat about where India’s placed in this transition from cash to cashless.

1. India’s still a cash-driven economy. Does that worry you?
Over 85% of the world’s GDP is cash. Only recently in the UK cashless exceeded cash. It’s a myth that cash is a problem for developing markets only.

If you look at the proportion of cash a few years ago, and now, you’ll see the cash to overall transactions ration has reduced by up to 40%. India is one of the few countries where you have government push on digitization, a massive Aadhar project and opening bank accounts becoming easier. Incentives are being floated as logistic players can deliver faster if consumers go cashless.

The cost of business would make India move from cash to cashless.

2. Will Wallets take off big time in India?
If you really look a large scale, multi-country level, there’s really been one success in the world – PayPal.

Wallets cannot succeed in a standalone basis. A lot of merchants and buyers have to come together, and it should be used interchangeably with a payment gateway. That’s where India’s rightly placed.

It’s also very crucial for Wallet companies not to pay incentives to consumers. If consumers use it even after stopping incentives, the wallet is a success.

3. Will proprietary wallets survive?
UPI is one of the signals from the government to bring inter-operability in Wallets. Some say it will endanger wallets, I don’t think so. My Paytm or Oxygen Wallet shouldn’t be limited to a certain number of merchants.

As UPI is introduced, the big players will embrace it, and it’ll slowly trickle down to the SMEs. Some wallets will move on the payment bank methodology, and some will integrate a payment gateway.

If you have a payment gateway and a closed loop it brings down transaction costs by 80-90%. That’s how the Wallet becomes a good option.

However, if it’s an open loop, you always have Visa and MasterCard and end up paying 2-3% anyway. That hits the margins of many merchants.

4. Why should Indian merchants partner with Telr?
If you’re looking for someone who can offer proprietary fully stacked technology, there are few in the market. Most are outsourcing specific modules or licensing their tech to different companies across the world.

With our international experience we bring customization for specific verticals and merchants. Call it tailor-made Telr solutions.

5. Why should proprietary tech matter for startups?
Large merchants have the privilege of accessing big players and ensuring their fraudulent transactions are limited. Typically fraud transactions are stopped by restricting number of transactions.

In case of SMEs, that might mean blocking 4 out of 10 buyers. That impacts cash flow and growth. We can empower an SME by tell him on a real-time basis what’s a suspicious transaction. We don’t force buyers to register on the merchant’s website before they can pay.

6. Biggest limiting factor for online startups
The government should allow merchants to sell on Facebook and Instagram without a website, period. We don’t have that today.

There’s no need to create a website and drive traffic if you already have a network on Facebook.