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The platform supercharging your reward points | Amit Koshal @ Twid
81 Plays1 day ago
Amit Koshal’s entrepreneurial journey began while working on a groundbreaking product at Intuit. Now, at TWID, he’s disrupting payment networks by turning reward points into a currency for transactions—an idea refined over five years of experimentation and failures, eventually leading to the product-market fit. This conversation delves into his path as a founder and his vision for a "happily ever after."
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Read more about Twid:-
2.From Points To Payments: Transforming Loyalty Programs For The Digital Age
3.How rewards-based payment app Twid lets you use loyalty points to shop, eat out, and travel
Transcript
00:00:00
Speaker
Hello listeners, I am Amit Kaushal, founder and CEO of Twit. Really excited to be here with Akshay today. Look forward to it.
00:00:21
Speaker
I have always been fascinated by journeys of finding product market fit or PMF. A lot of founders struggle to define what is PMF for them. And startup gurus also don't have consensus on what is PMF. In way, it is like finding love. You feel it in your bones when you have found true love. But at the same time, it is hard to make a formula to find it.
00:00:43
Speaker
Amit Koshal was working on a groundbreaking product at Intuit, an American accounting SaaS company, when he found his calling to be an entrepreneur. And the next five years after that were the journey of experimenting, failing, experimenting again, to finally reach PMF. At Twid, Amit is building an alternative to payment networks like Visa and Mastercard, except that the platform is built to enable payment to the currency of reward points instead of actual money.
00:01:11
Speaker
This fascinating conversation will give you a peek into the entrepreneur's journey of finding true love and discovering what a happily ever after would look like. For more such candid conversations, subscribe to the Founder Thesis Podcast on any audio streaming platform. you're a serial entrepreneur this is not your first venture and love to understand that journey of becoming an entrepreneur. ah You are like an MBA from IMT Ghaziabad, right? So just tell me like what happened in the intervening years which led you to become an entrepreneur. Sure. So Akshay, first of all, um it's been it's been a roller coaster ride since we have started. But this journey did not start from here. Actually, to be honest, um it was really, really long ago when um this bug bit me.
00:02:01
Speaker
ah When I was um very, very in my early days when my father had actually bought a Maruti 800 car. ah um And we had three brothers. This is the time when my dad asked me that, how's the car? Are you kids liking it and all that? And um at the end we are as we come from a service class family. So you know everyone is only about studies, studies, studies, et cetera.
00:02:31
Speaker
And i so I told my dad that you know this is a great car, but I think if he would have bought a Mercedes, it would have been even better. And and my and i was the yeah I was the youngest of the three um ah brothers that we are.
00:02:45
Speaker
So my brother started laughing and they were like, you know, do you even know the spelling of Mercedes? Have you ever seen it, et cetera, et cetera. And my father told them that, hey, you know, I think Amit seems like on a very different trajectory as you guys, um because at least he's aspirational, right? He's thinking way ahead of, you know, that I should have achieved more as compared to settling for less.
00:03:09
Speaker
So I think that, ah so I was right from the beginning, I was like that, in whatever I did. ah so So even in my career, I was probably the fastest um growing in all the all the companies that I was. I was the youngest M3 manager into it. And ah you know globally, you know I was the youngest to grow that fast in the organization. so ah so So this has started from the beginning. So whenever I had some money,
00:03:38
Speaker
And I could earn some money. The whole thought process was that I want to do something with this money and I want to start something. And I always had this part that I never wanted to build something like a B2B platform or this or that. Never knew such concepts as as a whole. The idea was that I wanted to create something really big, which will which everyone in the world uses. right I think that is what the approach was always.
00:04:05
Speaker
ah I mean, people have different approaches that somebody wants to build a rocket, somebody wants to build a seed, somebody wants to build something else. But for me, everything was whatever I will build, it should be for masses. That was the beginning. How did you land up into it?
00:04:23
Speaker
So um um I was working with a company called as Balaji Telefilms and I was the senior vice president for their oh internet and mobile ah businesses. And I had set up the streaming, they have a streaming service. You set that up. the they They had a streaming service. They had a platform called as Hunnar, which is no more exists now. Hunnar was the first platform that Balaji had or or India had seen in terms of anybody who's wanting to be in acting, um you know they will go to Hunar, they will create their profiles, and there will be people who will shortlist them. And then we had mobile content. So ah like ah web series was something that we launched. um Mobile series of those web content was launched by us because everyone in the rural market, the the mobile penetration was picking up and internet was picking up that point of time.
00:05:17
Speaker
So everyone wanted to listen to the such content of you know some raunchy content ah that Balaji is very known for producing. So people wanted to hear that on their phone, et cetera. So i had I had made that as a scalable platform. And we launched it. So I was part of the group CEO's office. um And I was advising them on how digital should transform, et cetera.
00:05:39
Speaker
But yeah, so post that, um ah you know Intuit had um ah came up with a platform called as TextWeb, which was, and I was not at all aware of by the way Intuit as a company. So I was not fascinated by name of companies. I was always fascinat fascinated about the kind of work and is this like a great work that I will be part of.
00:05:59
Speaker
So when I read the JD and I read about TextWeb, which was about you know getting giving internet to masters on SMS, I really liked that platform. And after that, I started reading about Intuit. What is this company? What do they do? Oh, then I was like, this is such a big company. um And then i then I got interviewed by a lot of senior management at Intuit. And then they chose me to lead the business at TextWeb in India. What was TextWeb? That was the journey at Intuit.
00:06:28
Speaker
So TextWeb was actually the largest platform India ever saw in terms of ah its own Play Store in India, like a Google Play Store or an Apple Store. But it was on SMS.
00:06:42
Speaker
So developers were developing apps on um on this platform. And consumers were consuming this content through SMS as a channel. Because the internet was not that popular. Astrology, cricket, ah movies, reviews, et cetera, et cetera. Even like Make My Trip as an app, um Ola as an app, WhatsApp as an app. right Everything we actually got the developers to build it on. So 40,000 developers used to build apps on text web.
00:07:11
Speaker
And over 15 million monthly hacktives were using it on the content consumption was happening on SMS. um So we were we actually launched it on long code, which is a 10 digit number. So it was sort of free for consumers, because if s SMS pack used to be very, very popular at that point of time. So you can send an SMS, you can get a content back. right You want to chat, do anonymous chat with people, find friends. You could do that on on that that platform. as So it became really, really big.
00:07:40
Speaker
um But monetization was a big concern onto that platform. So when that started happening... I guess this would have been killed by the mobile wave, right? So that is what happened. Actually, what happened was that the when the internet was picking up, ah you know everyone was moving to apps that, okay, Android app is something that we should create.
00:08:07
Speaker
But we were sticking around with SMS because SMS was picking up. But then what happened was there was a war at that point of time between telecom operators, wherein the mobile termination charges was increased multifold, approximately 10x of what ah used to be there. So if you are consuming my content and you are using it for free, for example, because it's a free long code,
00:08:30
Speaker
I as Intuit still needed to pay money to the mobile operator because some consumption is happening on those messages. yeah And it was in um millions and billions of messages, right? So it was absolute a cost, but for Intuit it was okay. But then when it went to 10X after this war, it became completely unsustainable because now your cost has just became 10X.
00:08:51
Speaker
So the the funding needed was also 10x for that. right So then then we then we actually went ahead and changed the model because we were not very ready for the app side of it because the consumers were like that right at that point of view.
00:09:07
Speaker
so um So we we actually um went ahead and ah partnered with all the telecom operators. And we moved this service to a short code, which is a five-digit number, 56767, for example. right um And that's a chargeable number. So consumer, if now wanted to use, they have to pay some money to use the content. We got a very cheap but you know pricing on the messages so that people can still use it, like on a 50-pesa basis. But it was still not you know like equal to a free service.
00:09:36
Speaker
So definitely when you do that kind of a model, you will become financially little bit stable, but the business will come down by 100th, right? What you were doing. So definitely those things at a macro level, I mean, like, you know, there there are, it's not, it's adverse, a transitory business, right? Like eventually technology would ah become cheap, internet would become cheap, apps would, phones would become powerful. And, you know, the whole,
00:10:04
Speaker
but promise of convenience and accessibility of SMS would disappear, which is what did eventually happen. But so how did this lead to your first venture? Right. So I was about to come to that. So I was at Intuit. I was sort of reporting to Scott Cook, who's the founder of Intuit and one of the only amazing leader I have come across that is so humble, so amazing. Always in the learning and teaching mode, even at this age of his career. So, you know, I had
00:10:41
Speaker
um I wanted to start something on our own again because I had the same problem. right So I've got some money now in my bank and it was the itch was again that here and the money is there, ah now I can put back and start my own venture. Never had an idea what I wanted to build. But then I started working on it. So what happened was my first venture when I asked came out of Intuit was Fashlot.
00:11:04
Speaker
which was an omni-channel platform for you to discover offline fashion stores ah near you and you can go into those stores and buy the stuff. What happened was there was a time when I was with my friend Rishi, who's my co-founder today. we were ah we We are very thick family friends because we are IMT Ghaziabad graduates and since then we have been family friends.
00:11:24
Speaker
So we were having dinner together at my home. And um when we were talking about business and what we should do together, he he also has the same you know itch about doing something ah with me. um ah Our wives were ordering food from Zomato or Swiggy.
00:11:40
Speaker
um But at the same time when they were they were discussing about fashion, that istope yilda ya cha um yevalla traia delime so so they were talking about these things, right? and and that And we became curious and we went to them and we said, you know, you're actually ordering food from your phone using an app.
00:11:59
Speaker
But you are when you're talking about fashion, you're not going to mantra. You're not going to any other platform. But you only want to go offline and you know buy fashion from those places. So they said, yeah, of course, because food is you know we know that this is a place where you get good food.
00:12:15
Speaker
but the pro and and But when it comes to fashion, it needs to really fit your body. right And and you that touch and feel becomes very important for you. um And that's why we would prefer to go out in the market, and it's a different shopping experience. So we want to do that. That led to our thought process that, you know um and and since our problem statement was also that we wanted to build everything which masses can use. So we saw we we we were discussing about it, and we said, whenever you actually structure an unstructured space,
00:12:45
Speaker
there is a large opportunity that can create get created, right? So for example, Zomato had ah literally got the offline menus to become an online menu and they they started with that as an app and then Zomato becomes Zomato.
00:12:59
Speaker
Make My Trip, literally the offline travel agencies, they got everything together and they built it. Yellow Pages was changed by Justile. They got the books too online. So when we thought about all that, we thought that there is one space of offline fashion, which is very big. The clothes is something that we always need, ah will not go online as such because of the sheer reason that people want to really experience that fact.
00:13:27
Speaker
So if somehow we can do just the reverse, all people, what they have done is they have got the offline place players to come to online or offline customers to come to online. We wanted to get these online customers to go to offline. And if we can connect these two, then we can create wonders. That was the genesis of Fashlot. So I went to Scott and I said, hey, no Scott, I want to start this venture and I want to go.
00:13:52
Speaker
And it's like, no way, you can't go and all that stuff. So it it was ah it was a really long discussion that we had. But Scott Bing, Scott, he sits on the board of eBay and and PayPal and et cetera, et cetera, so many companies.
00:14:03
Speaker
So he said, Amit, OK, fair enough. You want to do this? I will let you do this. um But I want you to speak to some folks ah before you start this. And I was like, that would be the best thing that can happen to me. So he got me connected to all the senior managements at these companies in the US. So then I happened to speak to them, um different companies, Foursquare, et cetera, et cetera. So I spoke to a lot of people.
00:14:28
Speaker
And then he said that, hey, do you think that it's the right space? I said, yeah, I mean, I still think. I can understand what they are saying, but they are talking about from the US market. I think India is different, so I definitely want to do this. ah So he's like, OK, you're all all fair and square. Please go do it. And if you need anything, let me know. That's how the journey started, and we started fashion.
00:14:49
Speaker
And you must have discovered that your assumptions were not necessarily true. And they must have been a journey of pivots. And tell me about that. Exactly. Exactly. And that is what the experience tells you, right? And that's what Scott was trying to tell me. And that's what many other leaders were trying to tell me. um and And being in the young age, when you are really passionate about what you have built, you generally try to ignore all this. And you see your consciences, everything, beard what you're thinking is right.
00:15:18
Speaker
yeah um and And when we started this, you know ah um we what we had to do was we had to get offline stores to come online. So we started with ah with getting their inventories also digitized, which became a real problem because we had to set up the complete studio, a team, a remote team. So there'll be a photographer, there'll be a dresser, there'll be models.
00:15:45
Speaker
They will go to their stores. They will do all the exercises. Was your pitch to a store like complete fulfillment, like from order to fulfillment, that you will also provide them a runner? That was the point, right? So the idea was not that we will get you omni-channel. That means that from your store, somebody will pick up the product because somebody has asked for that product and it gets shipped. So not like an online end-to-end because that is not what the brands were looking at at that point of time.
00:16:13
Speaker
they were thinking that people should come to my store more, right? So this will enable discovery, like people will discover that your store has that product which I want and therefore I will visit your store.
00:16:27
Speaker
So you can explore the products, you can explore the offers that are running. You will also explore some more benefits around it. And then you decide, hey, yes, I want to go to this butter store to buy it. right um because Because till the time you don't visit the store, you will never knew that you know what are the products that are lying in that store. ah So that was the problem statement. So when we went with this idea to the brands, everyone welcome welcomed us. They said, yes, this is what we absolutely want. So one side of the equation was right, that what we are thinking is what people want.
00:16:57
Speaker
then we so So of course, a lot of stores never had their digital products. So of course, the larger national chains had it. ah But if you look at regional chains, they never had their products digitized. So we started doing that. And we very soon realized that we are we are doing very absolutely wrong thing. This is not going to scale, because with this logic, I will probably be able to only digitize 100 stores in India. But I want millions. right That's how it it needs to evolve.
00:17:22
Speaker
So we again pivoted from that model. We said, hey, you know we have the merchants, they like us, ah but but we can't run with this model. What we can do is that we can only we can start a currency, like a rewards currency, which can be universally accepted and people can discover the stores but not the products as such. But yeah if there are some products, you know they can actually see it if it's already digitized. But we will not digitize that. But you will discover the stores, locations, what offers they have, what will you get if you go to that store, ah what are what is the what is the free loyalty points that you will get at the store, et cetera, et cetera. So we created that as the model. And we launched a currency called as fcash.
00:18:05
Speaker
which was fa alert cash of course a fashion cash. ah So we launched that and ah we started in two markets, Delhi and Bangalore, partnered with over 30,000 stores in India and got our stickers just next to Paytm etc. on the doors that, you know, Fcash accepted here. ah like phone't pick accepted here a predium so So we got that in place.
00:18:26
Speaker
We got funding from Yardnest and some other players in the market. Capillary was also, which was one of the largest players in the ah you know like a retail POS provider. So they also funded us. Loyalty. right So we we we started scaling from there on. We started building teams. How much did you raise? launched I think at that point of time, it was around around six to seven crores is what we had raised. Pretty decent number. Pretty decent round. Yeah, of course. So so everyone got really, really excited about the business. And we said that, yes, we will be able to scale it. So we launched our app called as Fashlot. So it was a location based discovery platform ah for people.
00:19:15
Speaker
And it started scaling. We also got a lot of people on roads near the fashion stores to tell people that this is what we thought, you know, that's the best place where you can do it instead of just promoting it on ah Google or Facebook.
00:19:28
Speaker
um the business started happening but then again after ah we we actually scaled to a very large number so in terms of GMVs etc so everything was working out ah but we we clearly could see that there were two problem statements into this business number one um it was a leaky bucket because you would not shop for fashion every day right so ah probably it's once in a three months or once in a six months you would go to a store to buy something so People were opening the app, that was not the problem, but they were not literally making a transaction. right um so So of course that monthly actives or daily actives that investors or we would like to see as well was not hack and what was not happening. And the business will only become business once you actually start making money out of this so and money will be once you go to the store and make a transaction.
00:20:19
Speaker
ah Second was that we were giving this F-cash as a currency, which was on top of any retailer branch currency. But it became very powerful because you know you were giving more to consumers, so they were loving it. And it was fungible, so you know people started liking it. um But because that was our ah cost, so it became started hitting the P&L really hard. When people were using it, we were bleeding. It was not very fruitful.
00:20:48
Speaker
So then we went back to the drawing board and we said, you know, everything's working, people are there, money is drying out, um but but we still have a business in place. We have large merchant network, um but people are still having these problems. And that is when we re wendy the way when we thought that, you know, let's go back to our merchants and understand where we are wrong and what we are doing right. So they started telling that, guys, you have done a great job because and we don't understand what you have done.
00:21:15
Speaker
Because people come because of you, because of fcash as a currency, people are coming back. They are buying. They are not coming back for my loyalty points, let's say a barter point or a shopper stop point. They're not coming back and asking that this is my point. They somehow comes and say, hey, and know I want to use fcash.
00:21:33
Speaker
so um So something is working out. And and then we realized that, yes, of course, because this ah this currency is fungible. And you know it's more and more people are getting it. And that's why people are liking it. Now, if that is a problem and the money was was literally very less into the company, um we thought this is the right time to make a decision of what we want to do.
00:21:57
Speaker
We were going through a very tough phase because um when there was and the business was at that stage, when the revenue was not coming through, ah investment would always get a hit. they um And we also never had that money to put it back because whatever money that we had saved from our job days was also got over because we were literally not taking any salaries into that business.
00:22:22
Speaker
um So um so we we we got to a conclusion that maybe it is a time that we stop the business, we go back to jobs, because we have family to run, we are we are married, we have kids. um So maybe we'll not be able to sustain. And ah so we told the team that, hey, you know this is what's happening. We might not be able to sustain for long. We'll see what we need to do. But if you guys want to stay, we will not be able to pay. So a lot of people, by the way, we were very lucky. A lot of people stayed back.
00:22:51
Speaker
with the business, we said, we are with you. And we saw that as the that also as a pull for us to sit together, think about me, Rishi, Amit Sharma, we are three partners. We thought that you know it may be a good idea that we re-look at our business. But instead of you know going back to jobs, we have put in so much heart and soul. Let's give it another shot.
00:23:17
Speaker
But with an hour short, which is really, really scalable, and there are different ways to do it. And that's when the idea shook to us when we spoke to customers, a lot of people that we started speaking in the last early in the last one month, consumers specifically. They said, you know, we like you, F-cash, but literally we have so many other points.
00:23:36
Speaker
that we are not able to track. You are giving me another point. ah So definitely, it is not that because of if cash I'm opening your app again and again. But yeah, when we go to the store, we remember because your sticker is outside of if cash accepted here. So that's why we remember we opened the app and do that. And and and that led to our to the to the next stage of the business is that like if we are able to aggregate the current points of customer and give it to them, maybe that is a next game changer.
00:24:05
Speaker
ah Then we started comparing ourselves with Apple Wallet, which was very successful. People used to use Apple Wallet everywhere in the US. It is because it is aggregating all your things at one place. and similarly vol What is the Apple Wallet? It's just a place where your credit cards are stored digitally. and you Credit cards, boarding passes, loyalty cards, everything can get stored at one place.
00:24:29
Speaker
And then you can use... On your wallet you can also see how much balance you have in each of your loyalty cards. like Exactly. Like that level of integration. Correct, correct. correct which Which even Google Wallet has just launched. okay um so so bill So we got another investor then. He was a guy from the US, he said, you know, if you guys are thinking on that line, I'm ready to put in 10 crores into your business.
00:24:54
Speaker
So um that was another ah you know zeal for you to get started again and get um get up and and run again. um So so we that's the genesis of Twit. We launched Twit. But again, we launched Twit as an app. So we launched Twit as an app, and we said you know you will be able to aggregate your points, but you will see the app, and you can then use it.
00:25:17
Speaker
And we had 10 crores in the bank. And again, so because we wanted to build for masses, so we always thought consumer first, right? So we will build everything consumer first. Fashlot was also consumer first. Tweed was also consumer first. um But the problem statement was again the same that, you know. To build Tweed, you would need these alliances, right? So that your Marks and Spencer's points come into to it. So you have to do an integration with Marks and Spencer's or exactly if like Flipkart has some coins, so integration with Flipkart. I'm assuming you would have wanted this Omni channel like online, offline retailers, everyone.
00:25:54
Speaker
I think it was, um and we learned on the way actually, you know, it was nothing was like so pre-planned because and we never knew where we are going, to be honest. ah But we we never stopped learning. I think that was one of the key thing that made us where we are today.
00:26:11
Speaker
ah ah Perseverance was key into this. We kept going. we kept going yeah Did you like start by building these alliances first and then launching the Twitter app? Because otherwise, why would a consumer use it? If you remember, first of all, in Fashlot days, we had built a large network of merchants. yes So we capitalized on that we and that's what happened. right So merchants were already there.
00:26:36
Speaker
Some consumers were there. So we had to utilize our strength that we have a merchant network. We now need to get the consumer to start using the points. What kind of merchants were these? Were they like a Marks & Spencers or like a Haldiram or like a small... All fashion stores. Kirana. Fashlot was all about fashion stores. So it was all fashion stores at that point of time. Chains or individuals. Chains. All national chains, regional chains. Organized retail.
00:27:03
Speaker
basically. Organized retail, absolutely. We were not into ah unorganized, so it was all organized retail, 100%. And so so that was the genesis of Twit. and But then we thought that we are, first of all, we have launched an app. So of course you have to acquire consumers. So it will bug again become like a very, very expensive. A little bit more on the idea. So your pitch to a chain was that, ah let me integrate with your loyalty system. And when a customer comes to the store, he can figure out how many points he has ah through the Twitter app, which will tell him that these are your marks and Spencer's points.
00:27:41
Speaker
So yes and no both. Because when we went to the merchants, we we spoke to them that we will be bringing traffic to you. they ah That was the pitch and everyone wanted that to happen. And we said if the traffic is there, you know things will happen. and your asked book What was your ask to merchants that let me integrate with your loyalty system?
00:28:01
Speaker
So that was the first part that we wanted them to do it. The second part, after they agreed that, yes, they want traffic and you know all these things happen. So we said that, hey, know can you give me access to your reward program? And we will show it and people can use it. But we were, again, thinking from a point of view of fungibility.
00:28:17
Speaker
right that you integrate with me Marks and Spencer and I will let your points to go use in Bata. Long approach. Absolutely wrong approach. um ah We could have told them that, hey, you know, give me your points, but I'll make sure that people come to Marks and Spencer and use your points. So with that approach, when we said that the merchant said, no, we are okay with being a merchant. We do not want to give our points to you.
00:28:44
Speaker
okay When that started happening, we thought that then we started looking at the complete space of rewards, etc. ah large Large but growing space in India, I think it's very, very developed in other markets. um And then we then we divided the market into three buckets. there was so ah Very extensive study that happened ah from us. So we realized that 70% of the market is with banks or payment instruments.
00:29:12
Speaker
So whatever reward points exist today, 70% are with credit card, debit cards, et cetera. Very natural because you are swiping that more. yeah um Second largest kitty was with these large players like Flipkart Supercoins, which was becoming very big at that point of time.
00:29:29
Speaker
Payback, which was a coalition program between ICICI Bank, Future Group, HPCL. Intermiles, which was earlier, a Jet Privilege. So there was a lot of points on Jet. So if you combine these, these they carry around 22%, 23% of the space in India. So 70% and 23% is 93%. And only 7% left was with with these brands. Let's say a Bata pointer, a Marks and Spencer point.
00:29:55
Speaker
So they were very, very small in terms of their kitty as compared to the other 93%. And that is when we decided that, no, let it let them be as merchants.
00:30:06
Speaker
because they should accept these currencies. What we have is 93. And we should not ask them to give their currencies because they will never allow it to happen. And it's too much of a hassle for me to actually go up to 7% as compared to 93%. So we focused our energies on the 93% of the space. So our first part was going to, and when we and we we we knew that Supercoins was growing and doing really well, and Flipkart is a Flipkart as a large commerce player.
00:30:34
Speaker
So we approached them through our connects, we reached out to them and we said, um you know, um we really like Flipkart Supercoins to be part of Twitter app because we will allow it to be used in the offline stores. And, um ah you know, the person who was there at that point of time was Anil Gotetti, who was the SVP of Flipkart, multiple businesses. And he said, Ambit, to be honest, this is a beautiful business that you guys are building.
00:31:02
Speaker
But I do not want to be part of it. because um Because you are running your own app. You are a consumer business. You are trying and you have your currency, other currencies, et cetera. I don't want to compete with that. but I mean, I'm very different. I'm very big. What I am interested in is you give me your merchant network. So you go and speak to all these players. That Flipkart users will use Flipkart app and come and shop at you and use Supercoins.
00:31:31
Speaker
I am fine with that. I'll pay you enough money for this. you know um I'll give you setup cost, this cost, management cost, but you give me this network of your merchants. So we we so again, we went to the drawing board.
00:31:47
Speaker
But I must say this guy is very savvy, you know, in terms of being able to very clearly articulate what was a real good proposition for Flipkart. Absolutely. And there was a time when when they they and and same time, you know, these guys said that, hey, you know, I think you're building great. We want your merchant network. So let us acquire you. And I was like, we had just started, right? I mean, if somebody is wanting to acquire us, there is a value that we're trying to build here.
00:32:16
Speaker
so So again, that's what I was saying. we We went back to the drawing board. We said, are we again doing the right thing? Do we think that we should be an app? ah And then we then we came to a conclusion that there is no point because people have spent enough dollars to acquire millions of consumers and became a consumer app.
00:32:35
Speaker
In order for you to compete with them, you literally also have to spend, again, millions of dollars to acquire those consumers, retain those consumers. So it's an expensive burn proposition. You have a good network of merchants. And now there are players like Supercoins, et cetera, who wants to be part of it. So that means issuers are also interested. So why are you thinking of a B2C business? Why can't we literally externalize our merchant network to these issuers and issuers to these merchants and then connect them both? And that will that will make wonders.
00:33:04
Speaker
So that is how really what it is today was born that day. ah And we we said that we don't want to operate the app, so we shut down the app.
00:33:15
Speaker
We created this as a platform. We we created our APIs so that Flipkart, for example, can integrate these merchants onto their app. And they can show that now you can go to Bata and this and that store, and you can shop, and you can you can use Supercoins. So that was the first win, the big win. um Got a lot of money. um yeah Business started happening. yeah We placed the QR code of Flipkart at every store. OK. How are you monetizing this? so For a merchant, yeah it makes a lot of sense because they now get Flipkart's customer base ah coming to their store. But I don't know if a merchant would want to pay for this to you. ah For Flipkart, it is probably adding more value because the supercoins become more valuable. But ah from whom were you deriving value?
00:34:07
Speaker
So I think the complete network, to be honest, you know, from Supercoins as well and from merchants as well. But from a value, if you mean who's who's paying you money, both again were paying us money. But literally every transaction, merchants pays us a commission that when you actually go, ah it typically ranges from three to four percent on every transaction that happens. Similar to a MDR for a credit card.
00:34:29
Speaker
Exactly. MDA credit cards are very low in India as compared to other developed markets. We are around 1.2%, 1.5%, 1.8% depending on the type of the card. ah But we were always premium because we said that we are literally allowing the customers to use their rewards into your stores. So you do not need to give any discounts.
00:34:49
Speaker
it So merchants, we were telling that you don't need to give discounts. India is always price sensitive market, so they will always be looking for offers. If they are able to use supercoins into your stores or any other currency into store, user is literally getting some discount. Yes. Which you are not sponsoring. So, and I'm getting the user to your store because the user is opening the app, which means there is a clear attribution of a consumer that this consumer was brought into your store by Flipkart. And hence you need to pay this money to us.
00:35:18
Speaker
right ah which was it Which was a smooth sell. I can imagine that would be a smooth sell. So that's one part. What was the other part of monetization? So again, so for example, the issuers were started paying us right that, hey, you know you are enabling us on so and so places. ah so and And I want these ABCD services. So hence I will pay you extra for this. right so What is the nature of payment? Was it a subscription or a what? like No, so of course, so it was it was some sort of a retainer fees. It was some sort of a per transaction fees, right? So everything started happening. So that's how that's how the business got started and, you know, Netbook started growing and then we started adding more issuers. We started adding more merchants. Who are the issuers that you added?
00:36:09
Speaker
So Flipkart, of course, I know who is besides that. like Of course, all these all these names, right, words I was talking about the 93%. So we we started adding in payback and started adding payback and etc. that So Indus and Bank. But the time when we when we were we were we were but're trying to grow, ah COVID happened.
00:36:30
Speaker
And um offline business got a hit. Nobody wanted to go to the offline stores. um and um And we were also so thinking that what we need to do next and that's where. And and we then we started definitely because the business was actually working out.
00:36:49
Speaker
We started raising funds, so we raised our seed round because we created a new company altogether because we never wanted to have the backlog of Fashlot and Inundaga and all that stuff. right So we created a new company. This company acquired the older company and you know all that stuff happened. And it was a clean slate. And then we raised our seed round. ah Very fortunate to have all the big names with us. Be Next and Sequoia. Be a Sequoia surge invested in us.
00:37:16
Speaker
and but But COVID happened. right so Money was there. COVID happened. um The offline was not working out. And we immediately shifted our focus to online. um Online was starting because COVID just had kicked in and and people were trying to shop online. um And b we put all our energies into online. so So that also movement happened. So online started picking up. And then online picked up so well for us in COVID.
00:37:45
Speaker
that we became everywhere, popular, people started doing us, issuer wanted to be part of it, merchants wanted to be part of it, because they knew that this is this is the wave that everyone wanted to capture. and So you mean that's how everything started. Who were the online merchants that tied up with you? like I imagine that Amazon would not have tied up with you, right? like ah but At that point of time, maybe yes. ah But now everyone wants to be part of it. So, you know, Amazons or Flipkarts or et cetera. You know, everyone want to be using this as a service, right, for the consumers. But I think at that point of time, it was book my show.
00:38:31
Speaker
um Geomart, groceries. um um I think just when we started, what was the name? I don't remember exactly. um ah CCD Online, ah because people wanted a cafe coffee, is so people wanted to order you know some sort of a coffee at their home. um Netmeds, so people wanted to order medicines. right so So these were some of the partners initial partners that we got onboarded.
00:39:01
Speaker
But since then, there is no looking back. like ah So in the offline world, I can imagine the flow would have been that there's a sticker there, use your Flipkart Supercoins or whatever, use your Payback points here. And then the consumer would either open the Flipkart app and there would be a mechanism to redeem Supercoins or with Payboi, maybe they have the card and that card can be swiped.
00:39:23
Speaker
at the merchant location yeah so i would So from a consumer journey perspective Akshay, when we were with let's say a Flipkart app itself, so you can open Flipkart app, you can go to a Supercoin zone.
00:39:37
Speaker
You can click on Supercoin Pay, and then the stores will get listed down. You can click on the QR code scanner, scan the code, and and you can pay the money. But in online journey, it's a lot more frictionless. One more question on the offline journey first. How about the others, like say in Intermiles or Payback? How did it? Because they may not have an app, right?
00:39:58
Speaker
So would just say everyone has an app. Payback has an app. Intermizer has an app. But I think we um ah before we could do any integration with them for offline, and that is what I was telling you, that because COVID had kicked in, everything started happening online. right So offline was shut completely. okay okay okay okay and sos okay So it was very fortunate. and I think the team executed it so well that we instead of thinking about what happened, we we quickly grabbed the opportunity of all online.
00:40:28
Speaker
because online was good. So we moved the business to online and then the journey was very, very, very smooth that we built. So when you go to a consumer, or sorry, any merchant, ah you are logged in primarily ah with your mobile number.
00:40:42
Speaker
right um so we So what we did was we we reimagined the way this these things should work because we thought if you literally have to think of for your account number or card number to fetch your balances, things will never work out because nobody remembers, nobody carries at that point of time. So we created new APIs into the ecosystem. We said mobile numbers should be the unique identifier of the consumer.
00:41:04
Speaker
because mobile number is something that you remember always. What's your mobile number? um So we got even the issuers to ah you know change their APIs to from the card to or account number to mobile number driven. So when you land to a merchant and you're trying to buy something, merchant will ping me with your mobile number and bill value that how much you're trying to buy. In real time, I will use that mobile number, ping all issuers, understand know how many points you carry, fetch your balances, show you at the checkouts, so your discovery becomes completely frictionless. You do not need to download any Twitter app. Whatever apps or websites that you use, you can go, you can see your rewards there.
00:41:41
Speaker
apply them, get a discount, pay the remaining balance in checkout. rate so So we literally made it so frictionless for consumers that it was a big delight. Oh, I've got so many points. I never knew. Oh, I can get a discount on this try section. I never knew. Hey, I don't need to wait for six months now to accumulate a lot of points. I can actually use it in micro transaction. I'm doing a recharge of 200 bucks. I'm buying food for 400. I can still apply 40 rupees from my points.
00:42:07
Speaker
So it was it was that kind of a super delight that happened in the country. Amazing, amazing very interesting. Yeah, I can imagine the delight of it. like Typically when you're checking out at Zomato and then right at the moment of payment, they choose an offer. you know So obviously this is something similar like that. ah guard it card interesting oh and ah So what is the network today?
00:42:32
Speaker
ah For example, does Zomato integrate? Does Zomato accept ah these points of the issuers? ah And for example, does CRED allow its points to be used in this network? I'm just using these two networks. I mean, from a consumer standpoint, these are very popular, sure like CRED for points and Zomato for consuming points.
00:42:57
Speaker
sure Sure. So I think we are still a very early stage company. um And um I don't think so. We have reached that level where I can claim that everyone and everyone in the country uses us. ah But still, ah so for to answer your question, Zomato currently does not. But I'm sure very soon Zomato will do it.
00:43:17
Speaker
um But having said that, we we have, you know, in entertainment, we have Book My Show, we have Make My make my Trip, we have Mantra to buy you fashion, um we have Netmeds, Milk Paskets of the world, Geomart, Ixigo, all these large partners uses us today. okay um So from ah from a strength of the network, Akshay, we would, from an issuer part of it, where we call them issuers because they're issuing you points, now they can be bank or non-banks.
00:43:45
Speaker
We would be having access to around 20,000 crore rupees worth of points with us, 2.2 billion dollars almost. And on the other side, it would be around 100,000 plus merchants or approximately 1 lakh plus merchants where you can use your rewards and and and get discounts or or earn more points. right and ah check So that's the net. Is credit as an issue on the platform?
00:44:10
Speaker
oh ah Unfortunately, no. because i think and By the way, i Kunal is an angel with us. so yeah he's ah he's a great He's a great entrepreneur, amazing friend. But I think from a perspective of Cred, ah it's a community of itself. And Cred points are within its ecosystem. I think it does not have a value as such in their books.
00:44:33
Speaker
So what we want rather that if those points get used, we need the money. they if youre If you're using 20 rupees of points of credit, I want credit to pay me 20 rupees so that I can give it to the merchant because merchant wants money.
00:44:46
Speaker
right But on the value and the on the books, I don't think so. Cred has a value as such. So that's why, you know, you are able to, um ah you know, gamify your experience with Cred by using, let's say 10,000 coins, spin this wheel, you get this and that, right? So I think they do amazing job with with keeping the customer engaged, but literally externalization is not, ah that can be done with Cred. Okay. ah This, ah putting the value of the points on your books, what are the norms around that? like from ah And I'm asking from ah like you know from an accounting standards perspective, like when does an issuer of points need to put the value of those points on their book? And they show this as an advanced sale, or what do they show this as? and This may be too technical, so feel free to like
00:45:36
Speaker
Pass on the questions. No, no and not at all. I mean, we understand the space well. So ah probably I can tell you what I know about the space. So there are two mindsets, Akshay, in our country. One um are typically the international players, like a city who got acquired by AXIS now, but Stansies, et cetera, et cetera. Or Starbucks. Or Starbucks, for that matter. What they do is that in their P and&L,
00:46:05
Speaker
the ah the what If they have given you 1000 rupees worth of points, right they will use all 1000 rupees as a cost into that line item that we have already added it into our P&L, so it needs to get used. If it does not get used, it's a problem. We want people to use it more because I've already added it into my line item as an income statement. right But we have another mindset which is primarily Indian mindset, ah wherein we provision it. What that means is that same example, you have given 1000 rupees worth of points to some ah to people, but out of that only 200 got used this year. So in my balance sheet, I will only show 200 and I will show remaining 800 as my revenue.
00:46:52
Speaker
Oh, okay. and becausester Once the point expires, then that becomes revenue. like That becomes revenue, right? so because So I was trying to say the same thing that let's say 800 got expired and 200 got only used. Then 800 becomes my revenue. So i am so Indian Mindset says is that more and more things get expired good for us. And my point is that if you really want it to get expired, then you are literally, what you're doing is you are giving an earn to a consumer. So I'm giving you money, I'm giving you salary every month.
00:47:22
Speaker
But I'm telling you, hey, you know, you can't use this money, by the way. So which is not fair, right? You should be allowing to use consumers. I mean, OK, so leave aside the fairness of it. Purely from what is a good business decision, ah should a business want consumers to consume the loyalty rewards fully or should a business want to give consumers the illusion that they have a lot of loyalty rewards if they buy from them?
00:47:51
Speaker
and but the business is happy if the rewards don't get used. I mean, you can consider the similar example, what you're talking about credit, right? I mean, you are also using credit. um So the initial delight of that, I will get equal number of points if I pay whatever, if I'm paying one lakh rupees on credit, I'll get one lakh points, which was first time ever heard of right in the country that you will get these many points. So and literally everyone got into it, right? Whoever had a credit card is like, okay, let me use this.
00:48:20
Speaker
So initially a few months it was a very good delight. that hey and oh i've got And it was like a statement that people, were hey I've got 5 lakh points, I've got 13 lakh points. But today you ask people and people say, you know oh shit, I've got 30 lakh points and they're worthless. I can do anything with it. So I don't think so. This is the right way to build businesses wherein you are your you are actually playing around with the emotions of people.
00:48:45
Speaker
and then you are not letting them use it. So ah you should do restrictions, that's fine. But you should not restrict the consumer on how to use it. right You can say that, hey, you know you can use 10% of my balance today, which is fine. But don't tell them that you can't use it ever anywhere, but only at these three places because I make more money here. Interesting.
00:49:08
Speaker
interesting ah okay Got it. So like essentially, What you're saying is that the credibility takes a hit. The reason to run the... I mean, so consumers see through it. When you are doing loyalty for the sake of showing that you're like, like as a marketing gimmick rather than as a real way to give value back to consumers. See, the consumers are smart. Consumers are amazingly well placed when they know about these things because they're financially, you know, they are transacting. They know things, right?
00:49:42
Speaker
Now you are you your you can always say that hey you know I have ah played with your emotions and all that. But customer also understand that I know yeah at this point will get expired. So actually this point is worthless for me. So you are giving me, but it is not luring me at all. ah There is no motivation. ah If there is a motivation, I would love to use it. So so consumer understand. So people can do a lot of marketing gimmick with it. But consumers knows that this is this is not going to help me.
00:50:12
Speaker
Become loyal to this brand. See loyalty was always created and i and I presume people should understand this. It's called as loyalty because you need to become loyal. So hence this becomes engagement tool. Loyalty is not to acquire new customers.
00:50:31
Speaker
yeah drive repeat you can't ask hey you know you come to my storage because guy i'm giving you this You have come to my store, you liked my product, you liked my business and I've given you some benefit out of it. And you're saying this benefit is great because I liked your product.
00:50:49
Speaker
So you need to become tally with the brand because of convenience, services, product quality, pricing. And then on top of that, you engage the customers with loyalty.
00:51:01
Speaker
but ye concept so much jazaru reaction long yeah Very interesting take. ah India I think culturally does not value loyalty points as much as other countries and I'll tell you where I'm coming from so I'm currently recording from Japan and the amount of cards in my wallet you know I have I think maybe some eight cards loyalty cards in my wallet which I never did in India even though when you buy at big bazaar used to buy at big bazaar you would get a
00:51:35
Speaker
payback card there and all that but I never used it because they were consumed the points but here I carry those cards around with me you never know when I might go to one of those stores and then those points matter ah because and every point gets used I none of those points are what wasted so there is a culture here of that you know stores offer the genuine loyalty which is not there in India I guess India the culture is more of discount like say a demart would never give a loyalty point, but they would just give you a lower price. And same for like here in Japan, Amazon gives loyalty points, but in India they don't.
00:52:11
Speaker
right So um by the way, we have we have very, very valuable partners as investors from Japan, including Rakuten, which is the largest rewards commerce on in in Japan. Yeah, Rakuten has this add point. Yeah, yeah, yeah. ah Yes, right. um And then they have Rakuten Pay, et cetera, over in and Japan. ah But we also have other like Jafco and ICMG, et cetera, et cetera. They're all partners from Japan.
00:52:42
Speaker
What I have understood Japan and the reason for us to choose investors from Japan was that Japan is a beautiful market to learn about rewards. right If you look at everyone in Japan, I think 94% of people in Japan are part of reward programs. like That's why rewards are everything in Japan. yes and And if you go to the stores as well, you would literally see the comparison between different payment instruments and they tell you that If you use this particular instrument, you will get these number of points or 10x point or 5x points. They never tell you that you will get 10% discount. So Japan runs on rewards, typically. That's why it is so popular. and And they have understood that for me to bring that customer back again, these rewards are the beautiful manner as compared to a discount. i think and And that's a very developed market. So in in Japan, whatever my understanding says, ah in a typical year,
00:53:42
Speaker
28 billion dollars worth of points are given. 28 billion. but It's that big as a market. US s is around by the 54 billion. okay um At the same time, India is just five.
00:53:56
Speaker
Because India has just started. I think we are we are we are we are at the stage where we are and MVP stage, like a minimum viable product stage. We are exploring how the reward should work. But do you think, I mean, it could just be that the Indian mindset is different of preferring... No, I was about to come to that. I was about to discount over loyalty. like I was about to come to that. Yes, of course. So what happened was if you look at it, um um even the banks, they started offering you discounts or cashbacks that you will get 10% discount if you use my instrument here. Now, literally what happened with discounts and cashback? And you would have seen with everyone, right every company had done it. Google Pay had done it. Paytm did it. Everyone started doing it.
00:54:41
Speaker
and everyone now gives you nothing. When you were early days, you used to get all these discounts and cashbacks because they wanted to get the customer intact, but now it's nothing that you actually get. Payment banks still do it because you still get those discounts. Now what everyone understood literally, if you go and speak to them why you did it, is of course one is that they wanted to get the customer hooked to them, but they also understood that discounts and cashbacks are not letting the consumer stay with them.
00:55:09
Speaker
right So you are currently using them, but whosoever gives you a better discount tomorrow, you will just shift to that brand. ah You are using an SBI card, you got a 10% discount, but now you also see that the other merchant that you wanted to shop from it has an HDFC offer, but you don't have an HDFC card.
00:55:29
Speaker
so you will actually call up your friend and say yeah therapistpa htc card which they they are meru and and discount another i put it up for so merku qui loyalty re sb card say htf c say meo jahae jojittan discount mila manusu yuka right But if everyone would have played it with rewards, what Japan did right and does today, then you start creating the loyalty of that customer with you. So now what people are doing is they are reducing this and they will start, and if they are not, they should. They should increase their spends and everything on rewards so that it can drive you repeatability. Because rewards is all about repeatability. Discounts and cashbacks will not create loyal customers. And it's a cost.
00:56:14
Speaker
Okay, interesting. So discount is like a drug, you can ah spend money, get immediate high of customers coming in, but it doesn't last. If you really want ah the customer to stay with you, then instead of discount, you should pivot to loyalty points and rewarding customers. And which you have already seen yourself in Japan, by the way. Yeah, yeah, yeah, true, true, true. Though I mean, you know, so like Dema at Indigo are these examples of companies who focus on discount instead of reward. Like, I don't think Indigo has any kind of loyalty program, airline miles, etc. Probably they nos they have now started to create it. They have already created a 60 Edge rewards is what they have already created.
00:57:00
Speaker
Okay. Airlines needs to. You know, the the genesis, ah by the way, do you know how the genesis of rewards came into picture? I was studying it somewhere, by the way. and So for the audience, i can I can probably tell them whatever I read. It helps them to you know focus on better things.
00:57:16
Speaker
yeah So um it started from airlines, by the way. By the way, even if if you look at early days of our our life when we used to do barter or barter chodiap,
00:57:29
Speaker
jaap k sub jirija So your mother always goes and say, you know, evilval is subjectly araborasa dana machide yeah withachi was a rewards to you la likevaliki capacity jo yuki mujiga de the hamishas or could you be a yeah and right so okay So now actually literally the um the whole, um this reward started picking up, loyalty started picking up in the airlines industry. industry Or airlines industry, ma theharki when you when you fly business class,
00:57:59
Speaker
you used to get a lot of points. So typically, being an Emirates flyer, if you're traveling three times in a year, you can actually become a gold member within just three flights. Because business class flights are 5x, then the economy flights, right? so right and And for economy, you literally need to fly 15, 20 times to become a gold member, right? Now why did this happened? ah so So why rewards started picking up? Because business class was primarily sponsored by the company. You were not putting your own money. yeah You are a corporate traveler. but Companies are paying for your business flights and you are becoming a gold member because of that.
00:58:42
Speaker
So free May, you get a gold ma tier and you get the benefits of gold tier. And now what you will do is whatever points that you have, you will use for your family travel and economy. You will take your family maybe puty flights for free economy. meangoi problem business may my business flights my yeah So loyalty started picking up from airlines.
00:59:02
Speaker
because of business class flights which are sponsored by your corporates and not by you. And and and the loyalty started happening. So the loyalty literally started in airlines like this. Okay, interesting, interesting. Okay, so ah understood now what is the, you know, what's the way forward for you? ah One approach is to make the network deeper in India or a second approach could also be to replicate this in other countries which already have deep loyalty programs in place like say Japan. oh What do you think is a better way forward for you?
00:59:40
Speaker
So of course, Akshay, we have a global emission. So India is just the first market. I i remember when i was I was getting introduced to a lot of founders across the globe, this whole community that we are part of, right? Sequoia, Binax, et cetera. So they have global founders, right, network. So whenever we started and introducing ourselves that, hey, you know I am this, so and so, and I'm building this, um I remember in all my such introductions, everyone just told me one thing. Hey, Amit, when are you launching in my country?
01:00:11
Speaker
yeah This is my problem. right I think everywhere this problem exists that rewards get unused, utilized. So of course we have global ambitions and we wanted to build a business something very similar to like a Visa and a MasterCard. So um what they built it is with fiat currencies. We are trying to build it with non-fiat currencies. And so India just happens to be the first market and we still believe we are just scratching the surface in India. But definitely our our focus is that we should go into the international markets and expand this business.
01:00:41
Speaker
But what is a bigger focus for you, like to make Indian network deeper or to go international? Oh, of course, of course, India, as I said, we are just scratching the surface here. So the current focus is remains India and we wanted to grow deeper and bigger in India before we even think of externalization.
01:01:01
Speaker
I mean, why not do it the other way around? I suspect that ah the effort you invest in setting up a new country would pay back a lot more than the effort you invest in making India deeper. I mean yeah i totally agree. It will take its own sweet time, I think. was like You don't have to get deeper. And you have no competition in India as in when the appreciation for loyalty, rewards, increases, ah there will be a natural affinity to come on the Twit network. ah Network effects, unless you feel it's too early for you to have the network effects power. ah To be honest, Akshay, this is also one of my learning after so many failures, pivots, up ups and downs. I think focus is the key. um And learning to say no to things,
01:01:53
Speaker
that you would not do makes you a better leader as compared to saying, hey, you know there are 100 things that we want to do. And these are great things. But um you know what you should not do today is more important than what you should do. So in my opinion, with at the stage that we are at, with the penetration that we have, if I can focus more on India and and and become more stronger with respect to how the business should become stronger,
01:02:22
Speaker
understanding the consumer because you can't have a better consumer experience than Indian consumers, right? um So with those learnings, with those data, there's those understanding, if I can know this... woke agarrami india manga just the lima gariclan is silkki up canva bega eachla yeah Exactly the same part. So I think that should be my focus.
01:02:51
Speaker
ah But you are also right that um ah the struggle required and the money making capabilities in other markets are far, far superior than India. ah But I think what I can learn from the people and from the market about how to build a better network and a business, it can't be better than India, to be honest. And is anyone else trying to do this in India?
01:03:19
Speaker
To be honest, I want many to do it because the time it started happening, the markets start getting created and which is good for for for businesses. I think people are trying to do it in bits and pieces. There are payment gateways who are trying to do this. See, I think everyone wanted to be part of us. um Many people wanted to invest in us. um But I think it was too early for us to get any strategic into the picture. That was also one of our decision to not get strategic too early ah and and build your business on your own terms.
01:03:52
Speaker
So I think when you do that and when you build and when Twitter has shown, because we created this as a category, right, not in the country, in the world. So when we, of course, there will be a lot of friction, people will not believe that this can work out. But now once we have shown it, that it can become big, there's a lot of money to be made on this, right, etc, etc. Then everyone wants to do it.
01:04:12
Speaker
so um So I think that's where the the situation is that players would be trying it. Some players are already. But I create the like a raisezor payment gates etc but i think is a very unique um benefit. ah If you look at it, we are a neutral party. actually So we and we are connected with everyone. Now, if a bank wants to externalize their points, right?
01:04:38
Speaker
They would say that to my consumer, Akshay holds this X card. I want him to give a benefit that he should be able to spend it, you know, if it may make my trip, then you should be able to spend it at Exego as well, Yatra as well, wherever Akshay wants to go and spend it. But at the same time, you should be able to use it on fashion, non-fashion, offline, etc. When you come to a payment gateway, payment gateway will not be able to give them that benefit because They can say that payment gateway will say, sir, I have make my trip, but I do not have Exego because Exego is with another payment gateway. So, so payment gateways always have this problem wherein they will not be able to provide the value to the issuer for their consumers. The way we will be able to do it as a neutral part. Second, I only do this for living. For others, this will be a side business.
01:05:31
Speaker
Yeah, features, not the primary product. So I think there will be a lot of difference in the way. And of course, there's a lot of understanding that we have in the market, which people take a long time to build it, right? Technology, stack, data, et cetera. I suppose that there would be two types of merchant mindsets. ah One mindset would be like your scope of butter, saying that butter would not want that you can use my butter points on other merchants.
01:06:00
Speaker
And the second mindset is the Flipkart Supercoins mindset where Flipkart is saying I want Supercoins to be very very powerful in the minds of the consumer and he should be able to spend Supercoins everywhere. ah What is the mix you see here? What kind of companies fall into the Bata mindset? What kind of companies fall into the Flipkart mindset?
01:06:23
Speaker
Oh, I think I covered that in the earlier part. Actually, if you remember, I said that the way market is divided is 70% of the spaces with these banks and payment payments instruments, which carries the 70% of the loyalty market. Yeah, so they obviously want the the loyalty to have value. yeah Yeah, exactly. For them them, ubiquitousness is natural, that you know you should be, because they're an instrument. So they should they they don't have any place there where you can use them.
01:06:50
Speaker
You use their instrument at other places, right? So they are they're absolutely fine. The remaining 23% are the larger players like Flipkart, Supercoins, etc, etc. they They definitely want their currencies to be more powerful. And we have shown them that how powerful it could be because, um you know, the way we can actually run their businesses is much far better profitable as compared to what they do. So on the reward space, so they are absolutely fine with it.
01:07:13
Speaker
The problem statement remains with the 7%, which is of ah you know they have their smaller kitties, but they want it to be into their own ecosystem itself. and so we Make my trip fall. because I'm sure these travel portals also offer some sort of reward points. So they would ah make my trip fall. like Would it say that I'm OK with...
01:07:37
Speaker
I think it would be between the second and the third, wherein they would have an in the they would be having an inclination to make it ubiquitous in nature. But at the same time, they also become, a because it's a travel thing, you know they want to keep it for the travel as a community. So they might want to do it, but I think time only is going to help them out in understanding what needs to be done. ah But the frequency of you using travel is also not that high, to be honest.
01:08:05
Speaker
I think where you have a higher frequency of transactions right and um and the larger usage is where that brand would like to externalize it right because they want to make it more powerful.
01:08:21
Speaker
Where there the probability of you coming back itself is very, very less, which is like six months in ah in ah in a year. okay There is no point of you know externalizing because... aka upka frequency human may a man huskiba just say harmmain any aju up but right right try right So like you would buy shoes maybe two, three times in a year. so Bata doesn't want to externalize it because Bata wants you to use your Bata points in Bata next time you want to buy shoes. Correct. And you can i mean they can keep sending you. abkaba so point as so and server abbulagahai meujajute karri i' and at imagine on yes so point he semaju dein na ya and and This is a good model. Like infrequent purchases will typically prefer not to externalize. Correct. Like say a lens card would probably not want to externalize but a Zomata would.
01:09:12
Speaker
Correct. 100%. Interesting. Because the time it gets externalized, Akshay, you will start remembering them even more because everywhere, wherever you're going outside their ecosystem, you are now seeing their brand. So it's a brand recall. If it's a brand recall, you would say... achaya or kamanli bai siva shean butra Yeah, right, i tre right, right, right, yeah, yeah, yeah, yeah, okay, very interesting, very interesting, okay, okay, cool. So, ah can you share what kind of revenue you do now, what's your ARR, a little bit about that? I think that's very that's kept very confidential as of now considering we are a Series A, moving to Series B as a company. But what I can help you understand is two things, right, how big is this and how bigger this network is growing. um To all the merchants that we are live with today,
01:10:03
Speaker
whatever GMV and sales that they do in a month, Tweed has started contributing to approximately 8% of their businesses. OK. Which is fairly the largest, probably, contributor by any instrument, payment instrument, out of the ecosystem, right, credit card, debit cards, net banking, Google Pay, phone pay, et cetera. Pay with rewards carries approximately 8% of the share. Similarly, on the on the issuer side,
01:10:32
Speaker
like ah We so whatever card spends if you go to let's say an RBI ATM statute would get to know that what bank how many cards are there? What is the volume this month that they did? What is the value that they did? ah We have already reached approximately 3% of the tour the card transaction that happens in India Are powered by rewards now so you can use you're using your rewards and then your card which is completely powered by Twitter and I didn't understand this 3% number. How is this different from the 8% number? This is offline or? No, no, no. So 8% is merchants where you are yeah getting to their share.
01:11:14
Speaker
ah merchandise soccer road carthe thema a roadroment right right right okay On the credit card, for example, a bank A would be doing a million transactions in a month of around 100 crores again.
01:11:29
Speaker
ah So 3.3% is basically powered by me out of that, which is by rewards only. So in 3% of those transactions and value, you are using twit to use your rewards and pay the remaining balance to those cards. The remaining are without rewards, you don't use twit, you just swipe it, just paid ah you You're using your rewards oh while swiping your card, the rewards of the card. Sorry, I'm still not very clear on this. So like if I'm swiping with a card in an offline environment or even how would the points get used with that?
01:12:13
Speaker
so or is it here When I get a bill of the credit card, then to repay that bill, instead of paying cash, I can use 20 rewards to repay my credit card. For offline, we are yet to launch. We are currently online heavy and offline is about to come. What I was trying to tell you was that whatever commerce transaction that happens, of so Akshay does 10 transactions with his Indusyn credit card.
01:12:37
Speaker
Okay. ah In a day or in a month, for example, right? Yeah. Out of that, he does six in online and four in offline. so Okay. So out of six, let's say 3%, which is, um you know, 0.18 transaction is done by pay with rewards, twit, et cetera. Remaining he just swipes it just like that, which he used to do earlier. Okay.
01:13:05
Speaker
ah But in point one eight transactions, you are also applying rewards on these transactions. Got it. Got it. Okay. Okay. So 3% of the transactions, there is a reward also applied along with the. which power graduate Yes. Okay. Okay. Okay. Okay. Understood. Understood. Okay. Interesting. Which is a fairly large volume in India, by the way. Yeah. Yeah. And what is the GMV that you're responsible for? Like how much of rewards are being consumed through to it?
01:13:33
Speaker
What is the value of rewards being consumed through to it?
01:13:38
Speaker
oh I think from a value, instead of value, what I can share is that in almost all the transactions put together, approximately 12% of the payment that you do is going through reward points. The remaining is going through your bank account or your credit card thing.
01:13:55
Speaker
um So, so that's the that's the bifurcation. So, 12% of your transaction value. so a ela rubbeca checkyap is my ume say ane barra has our rewards mess yukada ah batchewe eighty eight thousand rubies up they make credit card basicly hakaja repayment to ah ah laro baggage is crazy but you only paid repaid eighty eight thousand yeah okay okay okay okay and So, let me end with this.
01:14:25
Speaker
what ah What's your advice to founders? You know, somebody who is trying to build today and you have been building for almost a decade, what advice would you like to share?
01:14:38
Speaker
It's multiple to be honest Akshay, but to be, to the biggest one would be in my opinion is your perseverance with the business. Whatever you want to do, but whether don't think of it as a small or a big opportunity, etc. Just think of it as as your passion that you really, really are keen about it. You have to zeal to build it bigger. But have, make sure that you are in it for a long run.
01:15:05
Speaker
ah You're not in it for a smallest 10. Be ready for a very, very, um you know, sinusoidal ride. So um there'll be a lot of downs as compared to any up. So be ready for all that as well. So perseverance is the key. keep Keep at it. Things will turn out in your favor ah if you are going in the right direction.
01:15:28
Speaker
And I was, as I was telling you earlier, they in your earlier journey, there will be a lot of people who will come up with a lot of ideas. that are a ymbi carlo wobi kelo carlo wobi makaro And you get tempted to do a lot of things.
01:15:40
Speaker
youbi karlin there youbi tiger correct ah Stay focused. right um ah pararatize What are the things that you should do and what should what are the things that you should not do today? Some things are important in long term. The way I put it, by the way, I have a matrix that I have played always with. Let's say on y-axis I put, on the top I put urgent and the bottom I put important.
01:16:06
Speaker
On the x-axis I put, on the right side I put simple, on the left hand side I put hard. So anything that is falling under the extreme two buckets is something that I would like to ignore. But the business is about today. So have baby steps, think of tomorrow. Don't think of what will happen five years down the line. Those are corporates that can think of what is my vision for five years, et cetera. Think tomorrow.
01:16:32
Speaker
like So with that, my my suggestion to everyone would be that it's um it's great to be a founder. Both sides of this both sides look greener. um bute um But it's ah it's a fun ride, but it's a very tough ride. But be ready for that tough ride. So if you are if you are risk-averse, don't get into entrepreneurship.
01:16:59
Speaker
If you are a risk taker, absolutely go for it. Amazing. Thank you so much for your time, Amit. The pleasure is all mine, Akshay. Thank you so much for having me having me with you.