Startups may have been the reason behind the sudden surge Indian ecommerce witnessed, but they sure as hell aren’t the only ones driving the continued surge we see right now. Startups in this domain have been shutting down, laying-off, but the space is on an ever-increasing rise.
All of this — the increasing ecommerce market and shutting down of duplicate or irrelevant businesses — has opened up the new avenues for newer innovative niches. Out of all those, digital payments is anytime, the most prominent one. And its prominence is such, that what was once a supporter of ecommerce n India, has now become a sector in its own might. EMI is again a popular method, preferred by users to make payments for big purchases online.
What has changed in online payment system recently? Can you payback your big purchases amount through easy instalments without using your cards, unlike wallets?
Well, ZestMoney is a new payment option that users can find on the checkout page of some of the well known e-commerce portals. Ideally, it is good in many ways for e- commerce companies as well as for users. It is helping e-commerce companies to increase their average order size all along increasing conversions.
What’s more to know about this innovative payment technology and its role in the e-commerce eco-system? Let’s explore:
The Product
Lizzie Chapman (CEO), Priya Sharma (CFO) and Ashish Anantharaman (CTO) who have been obsessed with the idea of developing a new form of digital credit for the Indian market, co-founded ZestMoney in mid-2015 and started operations early in 2016. All founding team members have almost 30 years combined experience in digital lending from around the world.
They jointly add,
With rising income levels there has been a sharp increase in consumer spending, especially online, yet the on-line financing options available remain very limited. We spent some time thinking through different models and studying digital customers and their behaviour.
We realised that many young Indian consumers did not want to use a credit card; this was not an appealing financing option to them. We felt smaller, more transparent and completely digital, transactional credit made sense for this market.
The Process
Headquartered in Bangalore, ZestMoney reduces cash collection cycle and benefit e- commerce businesses in many ways. It helps in instant accounts opening, customers’ verification and transacting payment online. Conversely, it also enables customers to finance their online purchases without the need of a credit card.
The company’s founders claim, ZestMoney is India’s first cardless EMI product that allows customers’ payback big online purchases amount in flexible instalments. The team has a vision to revolutionize the online payment experience and disrupt the credit card market.
The platform allows for instant account opening and real time credit approval as well as digital loan servicing and repayments by setting up a flexible EMI at the checkout page. Whereas, returning customers can check out with a couple of clicks and a new customer needs to set up an account and be risk approved – a process that takes a couple of minutes.
The Tech
ZestMoney is an intelligent, context-aware platform that automatically judges a user’s credit worthiness through pre-set parameters. It has a heterogeneous tech stack and choices made on the principal of using the best tool to solve a problem. All development choices are based on a combination of using established and newer languages/frameworks.
The whole system run on the cloud and tech strategy is based around software-as-a-service (SaaS) and platform-as-a-service (PaaS) foundations. The company is dedicated to build a truly data driven, intelligent and ever-evolving model for evaluating creditworthiness and lending risk, based on a machine learning algorithm.
We believe this software and data driven approach to risk assessment creates a faster turnaround time, a more accurate credit risk assessment and allows for constant on-going learning and refinement of the model, based on new performance data. Our familiarity with and proficiency in APIs are vital core capabilities for our digital business. API business cases drive our API model to maximise strategic impact.
Real Impact
A fact that cannot be denied- the most of the online customers is still cash strapped and dependent on resources like banks, wallets and EMIs for buying high priced products. It means, ZestMoney is a good option for them to make easy payments. It helps in maintaining data backup and disaster recovery etc. In a nutshell, ZestMoney is good for customers, e-commerce companies and lenders in many ways.
- Customer (consumer) uses the product at the checkout (no homescreen)– best way to experience this is to do a checkout.
- Merchants/E-commerce companies who integrate ZestMoney also get access to a dashboard. It’s a screen similar to that which any payment gateway would offer.
- Lenders (Banks or NBFCs) get a customised dashboard based on their individual requirements.
Safe Payment
When customers see ZestMoney payment option on a merchant site, they need to follow some key steps before choosing it for payment. A first time user will select ZestMoney payment option then create an account by answering a few simple questions about his/her income and expenses. As a next step, the customer is required to digitally submit KYC and a bank statement and upon final approval his purchase is confirmed and shipped by the merchant.
What’s more, customers can also pre-enrol for a ZestMoney account on its webiste, so that they receive approval before transacting on a partner checkout. Are you worried about sharing sensitive data with ZestMoney? It is all safe.
The team says,
We ask the customer for bank statements (or access to his net banking account) and we scrape various data points from these statements using well known, extremely secure, third party software. Customer gives full consent to this. The data we obtain from these statements is stored securely in the cloud, with his enrolment form data.
[Important to note – we do not scrape any data from the customers phone, the data the customer gives us in the application form is combined with alternative database verification as well as bank statement data]
Ahead of the competition
ZestMoney does not have much competition today in India. There are a number of companies focused on extending EMI loans to customers via an on-line portal, but these companies have not integrated directly on a merchant checkout so the customer experience is very different. A couple also require the customer to download an app and submit various data in order to get pre-approval.
In contrast, it works closely with merchants to design a Cardless EMI solution that works for their customers. We can create completely customised solutions for any e-commerce or digital partner. Our technology platform improves the customer experience and turnaround time significantly. It’s also worth noting – that few other digital consumer lending companies are focusing on completely automating the entire consumer experience.
The Road Ahead
The market size for this product is enormous. In India today, less than 10m people have credit cards, whilst up to 100m people are shopping online already. India is a fast growing internet market and the number of people coming online is growing rapidly, yet the credit options available to them to remain very limited.
The company aims to be customer centric and has created its product roadmap to enable shoppers to shop worry free. It has raised a seed funding in 2015, from two global VC funds (Ribbit Capital and Omidyar Networks) and some local angel investors. Now they are looking to raise more funding for expand business widely.
