Weekly Startup Profiles > mChek

Entrepreneur Sanjay Swamy's award-winning product mChek makes the mobile wallet concept come real.

Quick Facts
Entrepreneur : Sanjay Swamy
Age : 43
Company : mChek
Based in : Bangalore
Founded in : 2006
Industry : Mobile payments and security

Business Summary


Payment through mobile phones by SMS

The Idea

Imagine walking into a supermarket, buying all the stuff you wanted (and a whole lot you didn't), getting your bill made and reaching into your bag to whip out your stylish wallet -- and then realizing with a growing sense of horror that you left it at home. What can you do except walk out, leaving all the things you painstakingly chose?

If Sanjay Swamy of mChek had his way, you would never have to face this scenario. You could just whip out your mobile phone, send an SMS to the vendor, give your credit card or bank account number along with your mChek PIN and voila, your payment would me made with the transaction showing up in your next credit card bill or bank statement.

That's the power of mChek, Swamy's mobile payment software product. If all goes well, the scenario described above could be reality very soon. In fact, the service is already on the ground in Sri Lanka, where mChek has tied up with mobile service provider Dialog Telekom and almost 500 merchants enabling secure payments ranging from utility bills/ pre-paid top-ups, over-the-counter and remote commerce, and mobile banking.

In India, mChek has entered into strategic partnerships with VISA, Citi India, ICICI Bank, Corporation Bank and e-commerce merchants like MakeMyTrip, Yatra, Indiatimes, FutureBazaar and SifyMall to enable safe, smart and simple mobile payments.The mChek on Airtel mobile payments service today has more than 1 lakh transacting customers with 90% repeat usage pattern and has processed more than Rs 100 million of mobile payments since its launch in September 2007.

The idea was a brainchild of Sanjay Swamy, an engineer from the University Visvesvaraya College of Engineering, Bangalore who also has an MS in Aeronautics from University of Washington, Seattle and a a higher studies diploma in Avionics from France's National Aerospace School under his belt.

In mid-2003, Swamy, then a Silicon Valley senior marketing and business development executive, visited India. While traveling by auto rickshaw, he happened to ask the driver the time and was astounded when the man smartly took out his mobile phone to check. That was the eureka moment - Swamy realized how widespread and ubiquitous the mobile phone had become in India.

From there, the next step was figuring out how the same auto driver could receive non-cash payments without having a point of payment machine at his disposal. Swamy realized the mobile phone was an electronic device that the auto driver already possessed, and could be used to make and receive payments.

The company is basically targeting four verticals - bill payment, Internet shopping, merchant transactions and P2P (Peer to Peer) payments. The regulatory policy on P2P payments from the Reserve Bank of India hasn't been announced yet, though experts say the RBI will issue draft guidelines for mobile payment systems by June.

The Opportunity

In 2003, Swamy did some investigations into the market and realized it wasn't quite ready for his product. He waited until 2005, when he moved lock, stock and barrel to Bangalore to set up Ketera India, a wholly-owned subsidiary of Kleiner Venture backed Ketera Inc., a leading provider of on-demand eProcurement and spend management solutions.

Before he joined Ketera, 'Start-up Swamy', as his friends call him affectionately, also set up and ran the Indian arm of mPortal, a Virginia-based startup in the wireless data services arena. He had gathered 12 years experience in Silicon Valley by that time in senior marketing and business development positions in the online/mobile content field at companies such as Portal Software, Xerox PARC and in embedded systems at Wind River.

Apart from Xerox, where he spent about a year, Swamy had mostly worked in small companies and start-ups. Even in Xerox, he worked in a division that was being conceptualized. That was the way he had always liked it. Working with huge organizations and big teams was never his cup of tea, and in a way, he was always preparing to start his own company.

He admits to developing and rejecting tons of ideas, and mChek might have remained one of those that never saw light of day if it hadn't been for his move back to India in 2005 and his meeting with two Indian software professionals, John Kattakayam and Bharavi Gade, who were working on ideas similar to his. They got together in 2006 and started mChek from scratch.

The idea really took off after a meeting with serial entrepreneur Rajesh Jain, founder of Netcore Sotware Solutions and the IndiaWorld consortium of websites. Jain, who is on the board of directors of mChek, provided the necessary push to make mChek a reality.

Along with this, they could clearly see that the timing was right. Mobile phone penetration in India was stupendous and unprecedented. "Here is a country that went from 100 million mobile phones to 300 million in a matter of years and is now approaching the 500 million mark. We also realized that the mobile phone was connecting a whole lot of people who were never connected before - who never even had a landline. This was a huge potential market," says Swamy. "In a matter of years".

The next step for the company was transforming a functional prototype into a carrier/ banking grade solution that was mass market-ready. Another important requirement was to bring together the ecosystem - telecom operators, banks, regulators and associations like Visa and MasterCard and convince them of the importance, viability and security of mobile payments.

But is the consumer ready? Swamy certainly thinks he is. "The first question that every entrepreneur should ask himself is whether my product is a vitamin or an aspirin," says Swamy. He says mChek was launched as a vitamin, though he sees it growing to be a combination of both very soon. "It involves bringing about long-term behavioral changes in the consumer," says Swamy, "But the Indian public is absolutely ready - everytime I show the product to perfect strangers, they tell me 100 things they would like to see happen with mChek."

Swamy believes that whether you are a bank, a telecom operator, a merchant or a consumer, this is by far the most convenient and safest way to do a transaction. All information is encrypted at all times and no secure information is shared with the merchant in a manner where it could be used maliciously. Education will happen with time - and more likely by word of mouth, he feels.

Also, Swamy is realistic enough to admit that he sees mChek as a mode of payment that will initially only augment other modes. He also foresees it to be more of a success in certain sectors, such as bill payment and buying movie tickets, at least initially. "We are at the 5th over of the first ODI," he says laughingly.

But in the long run, Swamy's vision is to get to the point where every mobile user uses mChek at least five times a dayand it becomes the first choice as a mode of payment. He also wants to leverage mChek as a tool for rural banking, micro-finance and sees multiple social entrepreneurship opportunities in his product.

In February this year, mChek, along with partner Airtel, won the 2008 Global Mobile Award of the GSM Association at the Mobile World Congress in Barcelona. They won in the category 'Best Billing and Customer Care Solution', and Swamy says even after winning the award they kept wondering 'how come no one else ever thought of it.'

Today, there is competition for them in the mobile payment market through global companies such as Obopay and Paymate that have entered the Indian market, but Swamy thinks they have the first mover advantage, and also provide an integrated solution that links credit cards, debit cards and bank accounts. Besides, it is too early to think of competition in the same category. "It's early days - the concern is less about competition and more about customer awareness and adoption and that is our focus now," says Swamy.

The Money

The founders, Swamy, John Kattakayam and Bharavi Gade started the money with their own seed capital. In 2006, they got substantial funding from Draper Fisher Jurvetson and the markets say they are now looking to raise the second round of funding.

The Team

It was entirely fortuitous that Swamy happened to meet John Kattakayam and Bharavi Gade, for mChek wouldn't have become a reality without all three. Today, they form the core team of the company, along with Suresh Anantapurkar, Vice President, products who is responsible for all aspects of product development and operations. Kattakayam, with 14 years' experience in bank card technology and financial systems is responsible for the information security and management of operational infrastructure, while IIT Kharagpur alumna Gade is responsible for the enterprise software architecture, transaction security and transaction switching aspects of the mChek platform.

The Company - today and tomorrow

Swamy is justifiably proud of the fact that subscriptions have touched 1 lakh in the eight months or so since mChek started operations. While he is hesitant to pin down exact figures, he agrees that mChek has about 50 per cent share of the mobile payments market as present, which, according to a study by Gartner India, amounts to around $ 1.6 million or 1 per cent of the data services market. "My ultimate vision is every mobile phone user will use mChek five times a day," says Swamy. A project that cannot be achieved on a large scale is not worth doing, is not financially viable, the CEO firmly believes.

What keeps you awake at night?

"I am eternally optimistic and a very sound sleeper," laughs Swamy. Still, mChek being a heavily partner-driven business, he does worry about relations with all the various telcos, banks and merchants with whom mChek has tied up. And since the partners themselves have inter-relations (such as Visa with HDFC Bank) he also worries about keeping the relationships between them working and healthy.

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