Startup Mantra: Pune-based PhiCommerce ready to roll out an end-to-end tokenisation solution

Published on Sep 04, 2021 04:22 PM IST

The Reserve Bank of India (RBI) guidelines which are going to prohibit online merchants, payment aggregators and payment gateways from storing customers’ card details is bound to disrupt the digital payments ecosystem

(From left) Co-founders of PhiCommerce Rajesh Londe, Jose Thattil, Tushar Shankar, Anil Sharma, and Rajkumar Subbaraj. (HT PHOTO)
(From left) Co-founders of PhiCommerce Rajesh Londe, Jose Thattil, Tushar Shankar, Anil Sharma, and Rajkumar Subbaraj. (HT PHOTO)
BySalil Urunkar

The Reserve Bank of India (RBI) guidelines which are going to prohibit online merchants, payment aggregators and payment gateways from storing customers’ card details is bound to disrupt the digital payments ecosystem. Tokenisation (replacement of actual card details with an alternate code called ‘token’) is the next high-tech thing to happen in next five to six months in the payments segment of fin-tech space. Pune-based startup PhiCommerce is one of the few players in the Asian continent that are ready to roll out an end-to-end tokenisation solution.

Founded in March 2015 by Jose Thattil, Tushar Shankar, Anil Sharma, Rajesh Londhe and Ramkumar Subbaraj, PhiCommerce is a new-age financial technology company that addresses evolving needs of digital payments infrastructure. Its payments processing platform PayPhi enables businesses to embrace the digital payments ecosystem with smart interventions to automate, integrate and streamline payment transactions across an omni-channel and instrument-agnostic platform.

In the beginning

After completing his BE Electronics from Mumbai University, Jose went to the Narsee Monjee Institute of Management Studies and completed his Masters in Management Studies in 1997. Says Jose, “I started my career with ICICI Bank. I was AVP Technology at the organisation and responsible for launching India’s first VISA Debit Card. That was my first real exposure to payments. What I realised then is that payments are going to be a requirement through all sectors in India. That’s when I decided to focus on digital payments as a career.”

Jose moved to a Pune-based company named ElectraCard Services. He was one of the founding members of the company which was one of the earliest software product companies in digital payments. That’s how Jose’s association with Pune began.

“We built payment solutions and deployed them for very large banks and institutions – both on payment acceptance and issuance side. Acceptance side operations were ecommerce, point of sale (POS), m-commerce, ATMs, Kiosks etc, while issuance side operations were to build and roll out very large debit card programmes, credit card programmes, wallets and other facilities. We did this in India and 22 countries across the globe,” Jose said.

“As part of that 15-year journey, we were able to see how payments was evolving in countries like North America, Africa, Middle East, South Asia and South East Asia region. We realised it was not just peculiar to India, but globally also there was a lot of action happening in the digital payments space. In 2013, ElectraCard was acquired by Mastercard,” he said.

In 2015, Jose along with Tushar, Anil, Rajesh and Ramkumar, decided to quit their jobs and start PhiCommerce. Jose is the chief executive officer, while Rajesh heads the payments business and Ani heads the soon-to-be-launched credit business. Tushar heads the sales and business development across both these business units while Ram is the chief technology officer. Says Jose, “I have known them for about 15 years and we have worked together. We are virtually a family. Each one of us have our own strengths or core areas/skillsets.”

“In 2015, we were focussed on product development. In the early part of 2016, we were aware that digital payments are undergoing a revolution. There were three basic philosophies under which we started PhiCommerce,” says Jose.

Omni-channel and instrument agnostic platform

Says Jose, “For last 40-50 years, the payments space was largely led by card-based payments. However, in the last 5 to 7 years new payment methods originated. QR, mobile-based/wallet-based payments, biometric payments, IoT based payments started coming in. Most payment processing platforms globally were designed for a card-first transaction. To handle these newer payment instruments, there was a lot of programming and coding done on top of these card-based platforms. But it made these platforms lose the nimble nature. It was like getting patched on a core platform. If you build on top of a legacy stack then you will lose the benefits.”

“In payments world, there are two basic concepts – Push or Pull payments. So, you should have a platform that can do both PUSH and PULL. You should have a platform that can process cards, or QR codes, or biometric or ECS type of transaction – all with the same ease. And you should be able to do online (ecommerce) platform or an instore platform or a doorstep platform. The whole world is now moving to an online-to-offline-to-online scenario. If you have different platforms or solutions to handle these channels, it is not going to work. As a business, there is increasing premium in having a singular view of your customer, and not having siloed systems. We realised that the world really requires a complete rethink on a payment processing stack. And we need to have a technology or platform that you would throw any sort of payment at it, it will be able to process. Thus, we decided to make PayPhi omni-channel instrument agnostic,” Jose said.

Built in India and deployable anywhere in the world

Commenting on the RBI and central government stance regarding payments data, Jose says, “Globally, lot of central banks and government are becoming very possessive about their payments data. Central banks and governments are insisting that payment infrastructure needs to reside on their soil. The data should not go out of the country. Which means that thinking from a payment processing stack perspective, it has to be ‘passport-able’ to any part of the world. Whatever be the application you develop, has to be such that it can be actually shipped out to a different location to be installed there very easily.”

“Large payment processers globally had developed large and fragmented platforms which made it extremely difficult to replicate or deploy them it in any other part of the world. We came from a product background. We realised that anything that we do has to be largely productised with a view of deploying in any part of world at short notice.”

Largely use-case driven approach to payments

Jose has a “controversial” view about payments. Contrary to certain people who view payments as a commodity – involving only a debit and credit or a sender and receiver – Jose and his team believes that each industry has its own nuances of payments. He says, “The moment you treat payments as a commodity then the payment platform only takes care of the debit and the credit. As a result, whole lot of processes around it get manually done. For example, originating a payment, invoicing a payment, collecting payment, distributing payment at the backend, all of this is then manually done, since from a payment processors perspective you will be only responsible for the debit and credit. Whereas we believe that it is not so.”

Jose also gives an example of an ecommerce marketplace transaction. “An e-commerce marketplace is expected to collect money from a consumer. Now that money doesn’t end with the marketplace. The marketplace then has to pass on a large portion of it to the sellers at the backend, to various logistics providers. This splitting between various service providers and sellers at the backend, is also according to us a part and parcel of the payment transaction. You cannot say that the payment ends with money having coming into the marketplace as account. What happens to the onward distribution of funds? So, we believe that there could a core that is common but every industry will have a certain requirement of some subtle nuances around payments. That is where we set about designing various APIs drive functionalities to cater to various large industries. Once we went live, we work with very large merchants across the country. We are present across all channels, all instruments in the country,” Jose says.

Demonetisation and Covid influence

Since its inception, PhiCommerce has witnessed three major developments which has propelled it growth. Demonetisation (2016), Covid-19 outbreak and the subsequent lockdown (2020-21) and the rise of direct to consumers (D2C) brands.

Says Jose, “Demonetisation was a wake-up call for country emphasising that the shift from cash to digital has to happen. A lot of transactions, across industries, got converted from cash to digital almost immediately. But Covid-19 has forced people to adopt digital as a way of life. Cash-On-Delivery (COD) has converted to ‘Digital Payment On Delivery’.”

Sharing his experience while working with one of their biggest client – a government-owned gas company – Jose said, “We see transactions coming from very rural distant places. People are making Aadhaar-based transactions for their LPG gas cylinders. These are people who have probably done their first digital transaction in their life. Now they have adopted to that. The pandemic has taught us that there is no going away from digital payments.”

Doorstep Commerce – Next Big Thing

Jose believes that doorstep commerce is going to become huge. He said, “PhiCommerce is among the pioneers to convert COD to digital payments at doorsteps. We see that today consciously or unknowingly you end up doing a lot of transactions at your doorstep. And largely all of that is in cash. We believe that with utility payments, food delivery, ecommerce payments, recovery of loans, insurance premium payment going digital at footsteps, doorstep commerce is going to become huge.”

“India with all the action that we see in payments today, is hardly 25 per cent digitised. Almost 75 per cent people are still dealing in cash and 75 per cent of consumer payments still happen in cash. So much growth is still going to happen, over the next 8 to 10 years in India. As a payment solution provider, we are blessed to be in a country like India which is leading the world as far as new innovation in digital payments are concerned,” Jose said.

Team expansion

PhiCommerce is headquartered in Pune with a 45-member team. Jose said, “The last 5 years were the first phase of growth for us. Our entire energies have been focussed on the product development, building the whole stack and bringing the enterprise clients. Almost 60 per cent of our team is on the tech side and the rest comprising sales and operations. Now we are in process of expanding the sales team across the country, including Mumbai, Delhi and Bengaluru. In the next 12 to 18 months, our focus would be on growth both domestically and internationally.”

Future Plans

Says Jose, “We are in the process of expanding in the overseas as well. We will be launching in the Middle East in the next six months from now and we are also looking at Africa and South East Asia as two other markets.”

Revenue and Funding

While refusing to disclose the revenue and sales figures, Jose said that they are going through a funding discussion. He says, “Today from market perspective, by end of this financial year with close to 20 thousand merchants across the country, we will be processing payments for them. We will be doing transactions of 15 thousand crores.”

“Last year, we closed a series A round where we were privileged to have BeeNext as an investor. Now we have some incoming interest from various investors. We are in the process of evaluating them. We hope to culminate a round in next 4 to 6 months. The funding raised will largely go toward product development and tokenisation solution development,” Jose stated.



Behind the Scenes

Online authorisation

•Business reaches out to PhiCommerce or vice versa

•Documentation – Know Your Customer (KYC) is done

•Technology integration of PayPhi platform with the business happens (usually takes 2 or 3 days

•Transaction start


•Customer goes on the website to make a payment, chooses to pay

•Customer is transferred on PayPhi portal

•Transaction generated

•Transaction processed through the payment networks like VISA, MASTERCARD or AMEX, and NPCI or others.

•Transaction completion confirmation send.

•At the end of day or next day – for the transactions happened earlier day – PhiCommerce receive funds from bank

•PhiCommerce processes it to settle with the business

•Business gets a conformation that payment will get done right then (Real time confirmation)

Says Jose, “We choose to work with larger businesses, we don’t focus on the SME space. We are building something where the complete value of the platform will be derived by larger or medium-sized businesses.”



Each payment instrument has its own fee mechanism.

•Debit Card – can be 50 basis points to 1 percent

•Credit Card – 1 to 2 per cent

•UPI – no charge associated with UPI

•NEFT – fixed fee per transaction



•Daily transactions - 5 lakh transactions

•To process over $2bn worth of payments in Middle East Asia by 2023

•Funding – total – over $5 million

•PayPhi is used at 18000 pin codes across country by customers of the largest government LPG gas distributor.



•Pay Nearby Technologies (Mumbai)

•Paytm Payments Bank (Noida)

Fin-Tech India

•$10 billion in equity capital funding over the past decade

•India is home to the third-largest set of unicorns globally, behind the US and China, which command a total valuation of $90 billion.

•Unified Payments Interface (UPI), digital payments are growing almost 10.5 times over the past five years to an annual payment run-rate of $450 billion, constituting close to 30% of retail transactions

•Digital payments in India continue to grow, with over 200 million active users and acceptance at more than 30 million merchants

Source: ‘100 Unicorns: India’s changing corporate landscape’ Report by Credit Suisse


Customers (names not disclosed due to non-disclosure agreements)

Doorstep payments category – e-Commerce, Logistics companies

Recurring payments – Schools, housing societies, etc


Other News

Pune-based industrial robotics startup Peppermint raises 5 crore

Pune: Venture Catalysts and Indian Angel Network have led a funding of 5 crore in Peppermint, an industrial robot manufacturing company that makes and deploys commercial housekeeping and service robots. The round also saw participation from Vinners Group and a group of angel investors led by Naveen Kumar Kshatriya.

The Pune-based startup will utilize the fresh capital infusion to enhance the current production facility and ramp up its production capacity. A part of the funding will be dedicated towards R&D. Peppermint will also allocate the investment in scaling its business across India and the Middle East.

Peppermint was incubated at IIT-Bombay’s Society for Innovation and Entrepreneurship. Runal Dahiwade – CEO and Founder, Peppermint, commented, “We have the first-mover advantage in the commercial robotics space in India and our robots have been tested and deployed in various sectors including pharmaceuticals, logistics, manufacturing and hospitality. This fundraise will enable us to ramp up our production, invest heavily in R&D and scale the business across India and the Middle East.”

Dr. Apoorva Ranjan Sharma, President and Co-founder, Venture Catalysts, said, “The organized Facility Management Services market in India and UAE has crossed $30 billion as of 2020 and is expected to record exponential growth in the coming years. We believe the Peppermint team is well-equipped to bank on this growth opportunity and scale rapidly on the back of its state-of-the-art, avant-garde, made-in-India robots.”

LoanTap launches LIMITLESS Credit line backed Cards

Pune: LoanTap has launched a range of LIMITLESS Credit line backed Cards in association with SBM Bank (State Bank of Mauritius) and Rupay network.

The LIMITLESS Prepaid Card offers to turn purchases into easy EMIs and charges interest only on the borrowed amount. The pre-approved credit limit can also be used at POS, ECommerce platforms, and ATMs. The card also comes loaded with limitless rewards, offers, and discounts on 100+ brands. It also offers accidental insurance up to a limit of INR 10 Lakhs.

LoanTap’s Co-founder and CEO Satyam Kumar said, “We are taking necessary steps to empower every Indian to pursue their lives and dreams without worrying about the financial burden. With this credit line backed card, we are offering millennials with a financial instrument that offers easy credit with flexibility in terms of usage and limitless privileges. Our vision is to tap into India’s 300 million millennials residing in small towns and rural areas.”

Agri startups engage with NABARD and government officials

Pune: Agri start-ups in the country got together to interact with the policy framers and share their aspirations and growth strategies. The virtual meeting was organized by NABFOUNDATION.

The meeting saw the heads of top agri start-ups share what they desired from the system. The meeting was chaired Dr. G R Chintala, Chairman, NABARD while Anil Agrawal, Additional Secretary, Department for Promotion of Industry and Internal Trade (DPIIT), Ministry of Commerce and Industry delivered the inaugural speech.

NABARD, through NABVENTURES, has provided venture capital assistance to agri startups and today is the largest supporter in the agri sector. Dr. Chintala remarked that leveraging the power of convergence was the need of the hour with some 1500 agri start-ups on one hand and some 4500 Farmer Producer Organizations set up by NABARD on the other. Convergence between NABARD, NABFOUNDATION, NABVENTURES and agri-start-ups, he added, can bring in the much-needed youthful dynamism and technological expertise which rural India needs so desperately.

The biggest need expressed by agri start-ups across the country was access to farmer communities and self-help groups to broad base their areas of operation. Equally significant was the need for building backward linkages. The meat industry aggregator for instance would want to have more organized goat rearing among more rural communities.

Story Saved
Saved Articles
My Reads
My Offers
Sign out
New Delhi 0C
Thursday, December 01, 2022
Start 15 Days Free Trial Subscribe Now
Register Free and get Exciting Deals