If a VC gave you $100M to build a payments app for India and maximize market share in 12 months, what would be your strategy?

Indian digital Payment market is huge due to second most populous country in the world and increased mobile usage and mobile internet connectivity along with the drive to use cashless transactions, mobile payment apps, and mobile wallets. But due to low financial literacy, security concerns, low merchant acceptance in rural areas, many people still prefer cash transactions.

Clarifying questions:

Company’s Current status: new or some experience? New, no market share

Nature of the Payments app: web or Mobile? Both

Revenue Model: Freemium or in-app advertising

Goal: largest payment service provider in India

Describe the product

Payments app: Payments app is an app for money payment made for a product or service through web or portable electronic device such as a tablet or cell phone.  

Our payment app would prioritize on user experience and engagement to capture maximum market share and generate revenue.    

 Strategic choices

First, I will work on MVP which will have following features

·         Core online payment features like opening user and merchant accounts, online payment, transaction/balance reporting etc.

·         ID verification for users and merchants

·         CRM features to govern the relationship with merchants

·         Push notifications

·         QR code generation

·         Platform as a service (Paas) and “Mobile Backend as a service” (MBaaS) platforms for the developing web and mobile apps respectively.

After that I will work on marketing and Business strategy for gaining market share.

Promotion and advertising strategy

As a new brand, for raising awareness, we will name it ‘Securepay’ and use catchy phrase ‘learn and pay’

·        · Offline Advertisement: Newspaper, Radio, television

·         Online Advertisement: Ads on Facebook and twitter, sponsored post on Instagram and snapchat

·         Financial literacy: educating financial literacy to people through blog, post will make unique Proposition and increase user base.

Business Strategy

·         Offer wallet services and link to other existing e-wallets

·         Partner with online brands such as Travel, Food, Movie Ticket, Event organiser etc.

·         Promotional offering in other markets such as Cashback and rewards including scratch cards, discounts etc.

·         Services: phone recharge, electricity, water bill payments, mutual fund payments, health insurance etc.

·         Reachability: will offer all Indian languages including English.

·         Partner with Local services such as health, Fitness, Job, Grocery etc.

·         Cryptocurrency: Buy, sell and hold Bitcoin, Ethereum, Bitcoin Cash and Litecoin

Cost Structure

Software, Cloud and Data Centre Expenses: 7%

Marketing and Promotional Expenses: 11%

Employee benefit Expenses: 25%

Payment Processing Charges: 40%

Depreciation and amortization Expenses: 4%

Other Expenses: 13%

Evaluating strategic choice

Metrics

·         Acquisition

           No. of app downloads/No. of website visitor

           No. of Users

            No. of Uses who have done at least one transaction

·         User Experience

         Number of total transactions

         Average transaction per user

·         Revenue

           Average cost/User

           Average Revenue/User

·         Retention

            Average Number of transaction/User * weeks after Joining Platform

Recommendation

I will use inorganic marketing and advertising strategy to create consumer awareness, micro-target specific audiences to increase market share. For maximizing market share I will work on Organic strategies such as Partnerships, mergers, acquisition, joint ventures with other companies. For attracting rural people, I will educate them on financial literacy in regional language which will make unique.