Let’s Talk Payments team recently interviewed the founders of Happay. Happay is a prepaid card based, business expense management solution that automates client's expense workflow from purchase to accounting, and enables real-time visibility and control over employee spending. The company is based out of India and recently raised a US$500,000 seed round from AngelPrime.
LTP: What is the vision of Happay? Why did you change focus to B2B from B2C? What are the key challenges you faced in the market?
Anshul & Varun: The aim of Happay is to make paying a happier experience. Happay started with a consumer-based product focusing on P2P transfers. At that point, Happay was the first product which was a platform-agnostic mobile app which worked on GPRS technology and allowed peer-to-peer payment solutions with mobile being the enablers. The product was focused on simplifying peer-to-peer payments, mobile and DTH recharge, and we were soon planning to expand payment services for merchants at brick-and-mortar stores. By the end of 2013, the platform had more than 200,000 users who were mostly young college-going students.
However, we felt that the revenue model was not strong. While loading the wallet, the company would lose close to 2% as payment gateway charges. So, the company had to earn this 2% plus our profit margin from the merchants. As the retail industry in the country works on wafer-thin margins, it was impossible for a closed loop wallet to scale up its merchant base to make profits. At the same time, we had requests from corporates to address their problems with payments. We realized that the gaps in corporate payments were much wider and there was no innovation in B2B space. Hence, we shifted our focus to B2B payments.
LTP: What are the key challenges faced by businesses when it comes to payments?
Anshul & Varun: As a matter of fact, there has been no innovation in the B2B payment space. Every business has a different payment need and banks have not come up with solutions to solve this problem either. The key issues faced by businesses include no real-time payments; there is a need for approvals before the spending occurs and the CFO doesn’t have a clear picture of where the spending occurs. Furthermore, the current products in the market provide a two-month delayed view of spending. Our focus at Happay was to ensure the real-time visibility of payment flow for the CFO.
LTP: Can you tell us more about your expense management product?
Anshul & Varun: Happay Card (Ratnakar Bank Ltd. is the Issuer) is integrated with Happay’s web and mobile dashboard—an expense management solution that helps businesses to track, control and manage employee spending in real time, from any desktop or mobile device. Our clients can give each of their employees his/her own Happay card for business expenses. Cards can be funded instantly from Happay’s web or the mobile dashboard. Happay Cards are accepted everywhere: at any Visa merchant online, in-store and at ATMs. This solution allows CFOs or any other decision-taking authority to get a real-time view of where your company money is being spent as they don’t need to wait for their employees to submit expense reports. They can also view merchant details, the amount charged, transaction type, etc. along with a digital record of the receipt. Furthermore, they can also decide budgets for individual cards, define policies and approval flow for approvals and set hard and soft spend limits across each channel. If the person spends cash, he can also enter the details of cash spent by category while on the go from his mobile app (either by manually entering it or by speaking).
LTP: What is your product’s USP? Do you plan to develop a full-blown solution for the B2B space?
Anshul & Varun: “Flexibility, visibility and control” is the key USP of our product! We started with expense management as it has low barriers for entry. In the future, we plan to integrate module for all other variable expenses such as vendor management, employee expense management and petty cash. Employee salaries are something which we are not focusing on currently but are open to looking at it as an option. Our product can integrate with SAP, Tally, QuickBooks and we plan to add more to this list. Integration with accounting software is not an issue as our product is flexible enough to export data.
LTP: Why did you choose RBL and no other banks? Are you open to partnership with other banks in India?
Anshul & Varun: The speed of execution matters. When it comes to payments, RBL is the card issuer and we use each other’s sales capability to complete our businesses. Furthermore, our technology and product compliments to that of RBL. RBL has been quick in decision-making and is a very flexible partner; hence, we choose to work with them. We are open to partnering with other banks and a few discussions are already on. Our value add is technology which is not a bank’s forte.
LTP: What is your business model and what is your growth plan?
Anshul & Varun: Our solution fits any business which has a distributed network. We currently serve clients across eight industry segments. Some of our clients include Habenaro, Subway, Ayurveda hospitals, Grofers, FreeCharge, Urban Ladder, Knowlarity Solutions, etc. We charge our customers on a per-account basis and have no setup or one-time fees. We plan to have more than 100,000 accounts by the end of 2016’s financial year.
Anshul has two years of experience in Microsoft Research Lab with 2 patents and 4 papers published in International Journals to his credit. Over the past 3 years Anshul has gained deep insights and experience into the functioning of payments platforms across the globe.
Varun has two years of corporate experience at TATAs. He comes from a business family, and entrepreneurship runs in his blood. He is obsessed about technology and looks for ways to make life easy with it. Varun has got the insights into the customers actual pain point and how the end user intends to use technology to solve it.
As they like to put it, Varun sells what Anshul builds.