Unlocking Growth for SMEs and MSMEs: Ankit Gaur’s Expert Take

[Music] Forbes India small business Summit presented by phone pay payment Gateway hello and a very warm welcome to Forbes India small business Summit presented by phone pay PG I'm mugda KRA today we are focusing on Tech driven Payment Solutions for smmes a transformative theme as digital payments continue to reshape the landscape for small and medium businesses across India and Lead this change in providing seamless and innovative solutions is phone pay PG and to explore how these Innovations are empowering businesses particularly in tier 2 and Beyond I'm here to meet anit Gore head of phone pay

payment Gateway and online Merchants hello anit thank you for having me in your wonderful office thank you so much nice to meet you I'm always excited to come to uh companies that have so many people because it's always the energy that sort of speaks about the organization ab and what a beautiful office thank you thank you so much I think we've grown tremendously over the past few years and I think this is a testament of that wonderful uh first of all um you've been with the company for such a long time you've been in the

industry and noticing the changes what according to you when we look at the payment gateways when we look at this transformation what have been uh your learnings about the trends and Milestones uh was it an overwhelming change that you noticed in the last few years I would say uh postco it sort of uh really actually you know uh for a good portion of the last decade payment gateways in India have been largely focused on the large Merchants it's maybe in the last few years and you mentioned covid postco post the rapid um increase in digital

payments that tens of thousands of these smmes have suddenly started going online and UPI has been an absolute Game Changer right it's allowed even the smallest of merchants now to accept payments and what that does has created an entire ecosystem of small Merchants who have now gone online and payment gateways have now been forced to become less fragmented less complex in what we offer and a small businessman does not I mean they're constrained by the resources they have right yeah so they don't look at a payment problem separated from a customer growth problem for them

it's one entire uh business problem and I think payment gateways have started taking that owners of sort of tying together all the pieces of the puzzle and sort of provide a holistic solution we've become you know from Mere facilitators of transactions to now almost enablers of growth game changers absolutely enablers of growth and I would actually dare say that almost the backbone of digital economy today in the country right that's true and classically we have seen ummes and msmes going through uh a lot of uh changes when it comes to the challenges you know a

lot of them are not able to scale up a lot of them face uh Financial uh uh challenges you know there is organized Finance there is uh unorganized Finance but that those those challenges will always remain but when we specifically come to the solutions that you're offering what were some of the biggest challenges that these guys were facing say and that you're solving now yeah you know unfortunately I think even today for anme or msme almost every aspect of their business right right from the time that they decide to go online set up their business

and go online almost every step today is a challenge um I'll start with the basic right accessibility of information right if I'm an msme where do I get information what are the good platforms how do I go online you know you would assume that it's simple but today it's still tough when we go out and meet these Merchants when we onboard them we realize that there's still a lot to be left in understanding that the access to Tech resources for example especially if you look at tier 2 or smaller towns access to Tech resources people

who can help them go online set up their businesses tools these are still a challenge right on top of it you add the cost of doing business setting up a business in India the uh processing uh uh transactions the cost of that still adds to that right and there's a lot to be desired in the quality of support that they get right if if if I'm an msme going online the kind of support I would get for onboarding for integration post go life support I think there's a lot that still has to be done there

and if I were even somehow to navigate all of this and go online just given my Persona the fact that I possibly don't have the latest technology at my backend call I'm more sort of uh you know open to being exploited by frosters absolutely right compared to a large organization that has a large team backing them I think as an ecosystem we have a lot to still do and I think that's what we've taken out and if you see our journey we've focused on a lot of these problem statements because I think as an ecosystem

as an industry there's so much more that we can do in just supporting them giving them a platform for information and access to resources when we go and meet these Merchants right there so sharp when it comes to their business acument what they don't know is how do I leverage this entire online segment to grow and I think that's what we're trying to do because there's so much business intelligence there but what they are uh constrained by is their reach and I think online is really the one we are able to sort of bring them

I think if you're able to help them understand what it means to go online I think 80% of the battle is won because I think there's just that mindset of I don't understand this and therefore I don't want to get in and I think that's where we trying to break it down and you know break it into pieces and say look it's not as complex as you think you know it's very simple you go you know what does it take to go online what do you need to do to start accepting payments and I think

those are some of the things that we are solving one of the things we've learned is you need these guys need a lot of handholding yeah is there still an a ratio of uh Tech and a People connect absolutely and I think that's where we are making a difference so for example while we do have a system in which you can possibly you know complete the entire process on your own we have a dedicated team that sits here that helps Merchants go online so if you don't understand what documents I need or you know I

don't understand how I need to integrate this right all of those can be done with the team that we sitting here they're always at um you know available to solve your problems and I think that's a big big learning and I think that's what we're doing differently as the world is going towards hey you know this whole concept of self serve you know you come in clicks you're ready but understand a guy who's sitting in AER three city right he's going online he's like I hope I'm doing the right thing I hope the money that

I'm collecting is coming to my bank account correct right so those are the things that we working on and saying look don't worry these guys still need that human touch right they still need that face Toof face connect so I think that's where we are working we're saying here's a dedicated team they'll work with you and the best part is this happens even before they start transacting right so there is no presumption of certain business coming these are not large Merchants I don't expect to make a lot of money out of them eventually but the

fact is we need to enable this is the segment which is going to grow India This Promise of scale absolutely which they don't perhaps understand at the moment would you say is that what connect and Confluence is all about the program that you're running or is that uh an offshoot of this uh tell me a little more about uh that one large part of it is to talk to them and assure them and give them a view of what it takes to be able to go online I think that's one part of it but the

way we structure these right and I was talking about this earlier that Merchants don't especially small Merchants don't look at their businesses in isolation they don't sort of segregate a payment problem from a sort of a customer problem this is a platform for them to just come together and network and for us to talk to them about how to grow their business and not just with payments right interesting all right okay so it's like a pan it's a holistic intervention that you're providing absolutely right so these are not a sales sessions right these are a

networking event so we call industry leaders we call leaders who have nothing to do with even a payments background or anything to do with digital but telling them you know how business is done exactly and what we have learned and it's so heartwarming when you go to these uh tier 2 towns and they say you know this is the first time that we've had a payment Gateway or any online platform come and talk to us right so we've actually tried to focus a lot more about making it a holistic problem solving thing we work with

thousands of merchants right we work with lacks of merchants on the offline side so there's clearly a lot that we've picked up and how can we translate that into information don't make the mistakes that someone else has made learn from what someone else who successful is and I think this is really that event that platform that helps these Merchants sort of look at that I think that's one part of it but a significant portion of what we do at Confluence and connect m is and this is something very close to all of us right is

listening to the merchants right I think there's a lot that these guys want to talk about there are a lot of their pain points there are a lot of things that we believe we've solved but we haven't I think someone just needs to hear them so a large part of what we do is the event itself is to listen to these Merchants you know tell me what's Sal tell me if this isn't solved can I solve this for you what will help grow your business and making that into something that translates into our road map

right for example a lot of what we build why we build how we build is dependent on the voice of the merchants that we hear on the feedback you get from absolutely right because in the end we building for these guys if the P people at my end who are building for them don't connect with them don't hear them then this is not really building for them so I think that's something that we do I'll give you an example example we were talking about you know the fact that we have people dedicated the world is

moving towards everything going completely digital you know three clicks you're ready but when we went to these Merchants we heard them talk a lot about the fact that hey I know it's very simple but I still get stuck here and that's when we said you know what we will have that entire digital Journey but we will still have people we'll even have people who will come possibly meet you people on ground who are helping them abut navigate absolutely this so I think a large part of what conference and connect does is basically this right gives

them a chance to talk to us for us to hear what their problems are and that influence what we build for them you know it's interesting you talk about networking because that is one area that uh perhaps the tier ones have cracked yeah that peer-to-peer knowledge sharing uh helps in learning unlearning finding out solution for something that somebody else already has cracked and I perhaps can learn from them but that seems to be the major problem that we face with the uh merchants and uh business owners small business owners especially they may have a fantastic

idea they have a great product but at the end of the day it all boils down to uh how do I scale it how do I take my uh product out how do I take my voice out and so how often do these events happen so they happen at a monthly level and we okay we very specifically choose cities that possibly don't have these events offered right got it we've largely stayed away from the four five b cities we've gone to a jaur we've gone to a chandigar um you know so these are the kind

of cities we want to go to and I think it's eye opening I think everyone should look at you know these cities the kind of depth of knowledge the business acument that exists in these cities the kind of businesses we have seen right you would assume that in a you know in a tier two tier three City you would not have F Tech edtech but they are massive and I think the best part we saw was just the diversity in the kind of businesses they're doing like you know it's not the flavor of the Season

no one's saying hey it's e-commerce we'll all do e-commerce there was a time when it was attech everyone so it's not just at Tech I think we do an introduction at the beginning and it is amazing to see you know someone's doing edtech someone's doing marketing someone's doing F Tech someone's doing you know something so specific right um I think it's brilliant so I think you're absolutely right I think a lot of this is just connecting with these and we do try and make sure we do it largely in cities which are traditionally not accessed

tell me about some success stories or what do you see on ground uh that must be so exhilarating to be able to empower somebody who had really never thought about doing business at that scale and has achieved that oh absolutely I think there's so many such success stories that we've seen not just from the merchant side right even on the partner side right people who started out by saying you know what I'm I know some people in my area who want to go online I'll help them go online or by the way here's a way

I could make money and today on an average they're making something like 500 to a th000 Merchants go live every month a single store 8 to 10 uh people shop and sitting and making so many Merchants go live every month right similarly we've seen success stories come out of jaur Pune where you know startups who have sort of gone out of their traditional M someone selling jewelry yeah you know women entrepreneurs I think phenomenal a game changer absolutely right so I think there's so many such success stories and I think every time we hear about

it right I think it just drives us more to be enablers of them and say that you know we have to be something more than just a payment facilitator we really have to be growth enablers for them I think there's the responsibility that we carry because of the platform that we are the reach that we have we owe it to the industry we owe it to the ecosystem to actually help these guys right and not just say okay I can help you with Payment Processing but no I have consumers I have 400 million consumers is

there a way we can help you grow because of that so we talked to Merchants and we said you know we have a customer base you guys need growth you have a fantastic product and we realize that that matching also happens absolutely right and I think that's the role we play and for example what we do is let's say you know you're an Merchant you've done the hard work of bringing the uh customer to your platform customer's chosen a product but there's a big friction point at the time of checkout and you know you'll recall

why you and I or most of us sort of generally shop in large um you know marketplaces because most of our contact details the payments are already saved right you're not going to sit and fill in your address every single time true now in an you possibly shop with them once maybe twice and you need to enter all of that again so he said hey here's an opportunity what we'll do is if the customer coming has their contact details saved with us it goes directly yes we get the customer consent I've seen that happen it's

like autof fail or you know you just click and everything comes as as soon as you punch in your number so yeah so we take the customer consent and we say hey here is a seamless experience because I know there are giants of course and you know a lot of Us shop on those giants uh um platform but authentic Indian platforms can also come up if they have their last mile sorted if they have their payment Gateway sorted if they have their reach sorted it gives you that confidence as well correct I think a lot

of times you get confidence when you know who is handling the payment yes yeah so when you get to that point where you have to do your uh transactions and if you see a familiar sort of uh an enaer as a client I'm also sorted that okay all right if there are any uh if there are any uh challenges you know there is um a person in the middle who will sort it out for me absolutely and I think that's the part of our job we possibly take the most seriously because we do realize that

a lot of customers right look at us as a trust Factor when they're doing our transaction right if you go to a website and you see a phone pay payment Gateway there right yeah you do realize that there is a certain amount of trust that you've placed in the brand yeah and I don't and I think we take that very very seriously I almost judge some if I don't see the familiar Gateway you know it feels a little scary that you you know so it always feels that so I think that connect sort of makes

a huge difference absolutely absolutely and I think that's that's something that we do very very seriously I think the safety the security aspect and the reliability aspect I think are possibly two of the most important aspects that we actually focus on because that that's one of the things I wanted to speak to you about what were the challenges in in online transactions when it came to reliability and security because you know we did see a lot of other Tech platforms also come in space what was some of the learnings that these smmes shared with you

uh when it came to challenges related with security and reliability yeah and I think it's important for me to reiterate right for us both these words right security and reliability are not just buzzword these are almost the cornerstones or the core of what we do and it for me it's I I realize that when a merchant is doing a transaction or has given me the authority to process a transaction if I fail at that point it's not just that particular transaction that has failed there is a possibly larger business impact for that in fact in

many cases it's an erosion of trust now imagine I don't know you as a merchant I've paid you you've not got the money you're saying hey I haven't got I've said I've paid yes chances that you would attribute that to the payment Gateway is less but I would attribute it to you as a merchant right and I think that's why for us the reliability and the security aspect is so important I look at security from a multip wrong strategy right it starts right from the time that I onboard a merchant there's so many checks that

we do in terms of you know what kind of merchant is it what is the legitimacy of the business the legality of the business because what I want to do is exactly like you said if you go and see phone pay at a merchant location I want you to believe that there is a certain amount of trust because company as well absolutely we've done our work so it's it's customer Centric as well from that point of view that you're sorting that problem for completely because I want I want the ecosystem to know customers Merchants everyone

that if I am a I am at a particular Merchants website then there's a lot that has gone into ensuring that the website is genuine right so I think that's the first part then of course there is that entire robust encryption because between a customer and a merchant there's very sensitive data that's being exchanged you're possibly putting in your card details you're putting in your bank details so there's a very strong encryption layer that lies between that and that's where a lot of our Tech comes into play just the amazing technology that we have and

the and I do acknowledge that a lot of this is something that today Regulators in India ask for I mean it's almost an entry criteria to being a payment Gateway but we go far beyond that unarguably I think we have the best trust and safety team in the country today what we do is once the merchant is us I have responsibility towards the merchant as well right it's not just about the merchant being genuine but now I want to make sure that I'm also able to safeguard the merchants as well which means my trust safety

team actually spends a lot of time analyzing data transactions and lets Merchants know if there's a possible fraudulent transaction okay right so it basically tells the merchant that hey now that you're working with us and we have access to technology we will see as far as possible to make sure that you're safeguarded as well so when there is this proactive approach right there's just the sense of trust right trust from customers trust from Merchants as well that you know both of us are being safeguarded so I think that's something that we take very seriously and

reliability is of course you know every time that a customer wants to pay transaction make a transaction I need to make sure I'm up yeah right it's just consistency and uptime and what we've done there is built a system by which let's say if you're a merchant and a particular bank is down or the network is down or ecosystem is down we proactively let you know so then you can take those decisions about hey you know whether I want to switch head up exactly right so I think we understand that in a payments ecosystem right

trust is possibly the Cornerstone of everything you do so for us it's not our role is not just to be facilitators of payment right but our role is really to be a trusted partner because I I know what a merchant and a customer trusting me with and I think that's where we spend most of our effort you know a lot of times the small businesses feel this is too expensive for us to afford um how do we how do we how do we even if we want to Pivot to this Tech how do we do

that and that's where the 0% transaction comes in what is that all about and after that did you see like a surge in um uh in Partnerships how has that helped smmes right so actually maybe I'll step back and tell you when we started this right it's very interesting uh last year there was a flux in the industry right um there was a period when most of the top payment gateways were restricted from onboarding Merchants for various reasons we were possibly among the very few who were on boarding right so in a typical economic sense

there was a lot of demand and very limited Supply and I think normal rational logic would have said great time to make money let's increase prices we just did the opposite we said this is is the time at which msmes are struggling to find a good provider the last thing you want to do let's build a relationship exactly instead of uh let's let's give them the comfort that we we are not here to sort of make hey while the sun shines right and it's at that Peak point when we were among the only ones accepting

payments that we actually went ahead and did a 0% and we said you know what for a certain scale don't worry about it you want to try your business you want to make sure you want to see if this works you're dipping your toes to try and seeing hey is this for me or not head your supplier will not stop will not not charge you for it your delivery guy will charge you for it but there's one aspect that I can control try it out and if it works great you're scaling up go for it

and at that point obviously there are charges so I think that was the sort of thought process behind it we continued doing it and I think it just stems from the fact that we want Merchants to not have cost as an entry barrier of trying out try it out look in offline I understand you have to set up a store there are cost online try you never know don't worry about the payment part for a certain period for a certain um setup and scale you're not going to get charged if it kicks off great you

make money I make money I think that's the way we look tell me a little more about the phone pay PG partnership program uh we do hear about uh referrals there we do hear about uh competitive commission rates what's that all about so I think of all the programs that that we've done till now I think this is the most unique in the sense that everything that we've done about this program is done in conjunction with the partner okay you know when we sat about designing a partner program we said there are tons of partner

programs out there we just build one replicate one and go out because the partners understand that and in my mind that is not a partner program that's a distributor program because I have decided everything I've decided how much commissions you're going to get I've decided what I'm going to sell to you and you just need to go out and sell it to your customer customers so we said we're going to do this differently this is not a distributor program right this is a partner program which means you need to be able to tell me what

will it oh you get to decide exactly right so right from the commissions that they want the kind of payouts that they want what products they would like to take to their customers what are their customers pain points and therefore how can I help them sell better everything of this program we went to these Partners very early in a journey and Confluence is that right where very early in our partner program we went and said look this is how your dashboard is going to look is that good is that what you want to see right

and everything about this program then customized is customized for them right is you decide and where the feedback comes from is and I'll tell you how we have done things differently in a partner program typically let's say you've referred a merchant and the merchant is doing transactions you're earning I'm earning obviously but till you don't raise an invoice you don't get paid and we we got the feedback that a lot of these Partners feel that you know I'm busy with my work or I don't have enough resources to have a accountant sit and raise invoices

so I miss out I don't realize till 4 months later that I haven't got paid so we said we'll do things differently you'll get paid irrespective right so even if you don't raise an invoice I know the kind of transactions that your referrals have given me I'll pay it out to you of course I'll work with you then you get an invoice but that will not be a roadblock exactly right we'll let you go ahead and get that so I think that's the way we've gone about designing it and course we've told them that look

a true partner program has to be a win-win win which means you win as a partner your customers win and of course I win as an organization so what we're doing is for example we support them with a marketing toolkit right we tell them grow your business I'm here to help you grow your business and I'll get a part of that I'm not trying to take away your share of whatever you're already doing so we do these meetups for them we do these Summits for them we are creating an ecosystem of a partner which says

I have thousand of merchants maybe some of them need your services you might be a tech company you might be a digital marketing company while being a partner for me maybe some other Merchant of mine might needs digital pay uh dig marketing can I help do that so I think a lot of what we're doing is basically ensuring that there's an ecosystem and everyone's gaining from it right it's not about me just treating you like a a sales Channel and trying to get but I'm saying how can I add value to you because the moment

I'm able to add value you become an advocate for me and I think that's really where we're trying to go um I I have numbers from the phone pay puls and BCG report which says Merchant payments are expected to increase from 20% to 65% by 2026 um the canas is huge what's your vision for the next few years to actually uh enable more Merchants uh be the customers uh trust point and also uh to grow the business the first would be accessibility right I think at core the biggest problem that I see msmes is the

fact that they don't have access to information they don't have access to the right tools they don't have access to the right folks who can help them go online to the best practices to the mistakes that others have made access to the best payment methods so I think a lot of our Endeavor our vision is to make all of this give platforms where they can get access to this information they are really smart people in that segment right they just need the right information to be able to act on it so for me the first

one would be accessibility the second would be affordability right you've talked about how much the industry is going to grow yeah which means you'll have even the smallest of small Merchants now wanting to go online right which means not everyone can afford the kind of rates that are there today the cost of setup of business right our vision is to actually make it to let any mer who wants to go online not have cost as an entry barrier right go out try let cost not be an entry barrier which means if you need to innovate

on pricing so be it try out new pricing models um you know so those are things that we want to do we may even partner with other fintechs make working capital accessible to them so just make the entire cost of doing business access affordable right so the second is affordability the third would be Innovation this segment is phenomenal inov the kind of innovation that stems out of this segment is I mean has to be seen to be known right and if we need to partner with them we need to innovate with them we have to

be inep with them so if my new segment of merchants are going on social media to sell I need to be able to support that if they are uh going to new business models I need to be able to support that I need to be able to be in step with everything that they're doing right um this could also mean things at my end for example can I use AI to give them better data right right a lot of merchants probably themselves don't have a sense of the larger picture of what things are doing so

can I use AI for data can I use AI for fraud detection right so I need to constantly innovate so for the next two to three years right a lot of focus will be on Innovation right and I think the final thing would be expansion scaling it up scaling it up right this segment is so ambitious and the last thing I want to do is be a hindrance to their growth it's not just on the reactive side but proactively can I in many ways support them in growth is there something that my platform offers besides

payment that can help them grow right because eventually everything it comes down to is how can I help an MSM Merchant grow so I think the bottom line for me is I really want to look at look at I want this segment to look at me as the preferred partner yeah but not just for payments for growth for growth I'm an msme or anme I come to you what are the top five features um that uh I'm I'm looking at in terms of growing my business you know the advantage that we have is the fact

we work with so many msmes not just on the online side but even on the offline side and we've realized that every Merchant has their own Journey right there is no single fits all kind of solution so what we've done is the first thing that we've done is we've said the base thing is you need to go online and you need to go online quickly and easily you have so many other things to worry about in your business going online should be the least of it so the first thing we've done is we've done almost

instant on boarding instant on boarding so you come you have everything go online the second thing that we've done is basically said not everyone who comes in the online space has all the bells and whistles on first day you may not have a full website with everything on correct you might be an Instagram seller you might be a WhatsApp seller you might just have your catalog online someone whatsapps you and says hey I like this t-shirt right how do I collect money now right so what we've done is we' have had a very easy way

of sending them a payment link does not require any integration does not require any um you know sort of development work on that send a link create a link send it and collect payments right so that's the second thing we've done and as you scale you might want to get into a full-fledged payment Gateway integration and we help you with that as well right so I think it's scalability from links to a full stack right the third thing that we have done is we've realized that as merchant scale in the beginning they want Simplicity in

everything they do which includes Simplicity in pricing right so when you start off we've kept pricing very simple we we are the lowest we've even supporting with 0% but beyond that also it's a single pricing right it's kept it very simple but we realize that as smes are scaling you might want Innovation and pricing as well as you scale you might your economics might change so we have that we reward those do more right if your scale is larger you end up paying lesser right so I think that's the third thing that we do the

fourth thing that we are able to do is everyone looks at the entire online segment as one right so give them as much information as possible but talk to these smmes there are three or four things that they look at in the report in the dashboard right one is you know how much uh sales have I made today right how much settlement has happened to me and are there any refunds if any it's is just simple so the dashboard view that is there smarter dashboards yeah and it's very simple right it's to the point it's

only about overwhelming yes exactly there's no cognitive overload on them right having to think about oh there are so many Cuts what do I do am I supposed to do something with this am I not looking at my business correctly right so we've kept that very very simplistic and the last point is we've also realized that a lot of these Merchants right when they collect payments a lot of customers are hesitant to pay even before they get the goods right a lot of us have seen we've seen a very uh smart t-shirt on Instagram I

don't know the seller I don't know if he's going to deliver I want to place an order but I'll pay when the delivery happens now from a Merchant's perspective there is Cash handling it's cash on delivery there's a cost attached to it so we said you know what we'll do we'll integrate with the delivery apps so when the delivery happens don't pay cash make a digital payment at that point right scan the QR or use your credit card to make a payment and today that's possibly one of our most highest selling products because a lot

of these msme Merchants realize that people want to pay a delivery but they don't want to handle the cash of it so I think that's the broad gamit of what we are offering the segment wonderful I think um this is uh a gamechanging time for not just uh msms but you know also you as a company as an enabler and some of the things that you have uh shared with us today are pivoting on the fact that in the times in the years to come till 2026 you know more and more uh Merchants are going

to adapt to online payment systems and how does life become easier for them when they don't have to get into the integrities of handling that and you have a trusted partner I think it all boils down to collaboration and partnership as you have mentioned thank you so much anit for uh spending time with us giving us all the insights it was so wonderful to have Wonder talking thank you and I hope all of you watching this episode found all the information and insights useful thank thank you for watching Forbes India small business Summit presented by

phone pay payment Gateway