Meet the Paymaster Who Has Made Our lives Easier With His Payment SolutionHow Phi Commerce Co-founder and Chief Executive Officer Jose Thattil built a ubiquitous payment mode that saves cost for e-commerce and payment gateways firms

Thattil - an old timer in retail payments market was agonized over the perpetual delay in delivery of a product he purchased online. "Repeated calls and a lot of aggravation preceded the delivery from one of India's top e-commerce marketplace," he says. Another challenge and even a broader one for e-commerce firms has been cash on delivery (COD) - the de facto payment mode for most of the digital shoppers - 70-75 per cent to be approximate. That's due to huge cost implications in managing cash and infrastructure to accept cash payments.

So Thattil gauged the profile of Indian e-commerce buyers through multiple interactions with retailers, delivery companies and a quick consumer survey. And the result was positive for both – consumers and businesses. "Cash was a problem for customers too since 70-80 per cent of online shoppers simply wanted to pay on delivery but not necessarily through cash," he says.

Feasibility of Various Payment Options

By far the logical answer to the above problem would be card payments. E-wallet payment on the other hand still has a long way to go. Thattil however, didn't buy the former argument. "For cards, mobile point of sale (mPOS) device is required. Also, these devices often face connectivity problems. This is a real problem in India. So, mPOS-based payment is not a scalable option."

How PayPhi Came to the Rescue

Thattil tweaked the card-based digital payment option to a web link-based alternative in his payment gateway solution PayPhi. This enabled customers to pay when the product is delivered but through online mode. He explains, on product delivery day, a deep web link is sent along with a text message to the users. They are apprised about the online payment option through the link. When the user clicks on the link, apart from all the order details, he/she can choose from options like card, net banking, UPI, e-wallet etc., to pay. The payment notification is sent to the customer as well as the delivery agent.

"User can pay without being physically present at the delivery location. For a delivery agent, the hassle of connectivity and carrying the mPOS device is not there. The location is usually home or office where the user has more stable connectivity than the device," explains Thattil. This saves re-attempt deliveries and saves costs for the e-commerce companies. It is quite like a prepaid delivery option for the agent and so, he doesn't have to wait for accepting payment. "Card payments or rendering change in cash payment can take around two minutes whereas, through the link, it takes around 45 seconds," he adds.

The Key Differentiators

Link based payment in India has been around for quite a while and used by larger payment gateways. But what separates them from Thatttil's solution is the deep technology integration it has. For instance, the link also shows air waybill number for a user's shipment.

Within six months of launching the service, Thattil saw conversions as high as 50 per cent from cash to the digital payment mechanism in certain pin codes of delivery. For him, the effort has gone into deep integration which is 20-30 per cent of the incremental cost incurred by the company. Thattil didn't disclose the amount though.