China’s transition to economic powerhouse has been so striking that India’s potential and progress is frequently overlooked. India is the world’s largest democracy, and is expected to surpass China as the world’s most populous country sometime in the next decade.
The economy is currently growing at 7% ,and the Indian telecoms sector is the world’s second biggest. In such a period of technological and economic change farsighted companies have the opportunity for rapid growth.
Payportal, a private company established in India in 2011, provides payment options to service providers and their customers, allowing for domestic money transfers and bill payments through the Payportal wallet. The company is based in Delhi, where it has a network of 80 distributors and 2,300 retailers. Last year it processed 500 million rupees, over 7 million USD, up 45% on the figures for 2016.
Now Payportal plans to a step onto the blockchain, allowing for more transparent transactions and international remittances.
India is the world’s largest recipient of international remittances, the sending home of money earned abroad. In 2016 alone $62 billion was transferred into the country by overseas workers. These payments are often subject to high fees and long delays, and that’s if the recipients have bank accounts, which many do not. The remittances market has long been seen as one of the business sectors most ripe for disruption by cryptocurrencies.
Concept and White Paper
The Payportal white-paper is relatively short and sweet at a brisk 24 pages including contents and risk disclaimers. Much of that space is spent describing how the Indian market works and a description of the current Payportal solution.
Small local retailers have a particularly important position in the Indian economy. Due to what the white-paper describes as a deep history of “relations in India based on trust,” consumers often have more faith in their local shop than they do in larger, more anonymous, companies. These shops now frequently function as hubs for paying mobile phone bills or recharging credit.
However, the system is not ideal. Retailers have to purchase a prepaid SIM card from which payments can be transferred to customers’ phones via SMS. If there is insufficient credit on the card, the bill may not be paid. Credit is not transferable between the retailers’ cards, so they may be unable to help a customer with his or her bill, while having surplus credit elsewhere. Multiple utility providers, all with their own prepaid systems, means that no individual retailer can offer a full payment service.
Payportal has developed its own wallet which links banks, mobile operators, utility companies and their customers. This frees small retailers from having to deal with multiple separate companies, each with its own handset, and leaves them to concentrate on their core business.
Payportal has a team of distributors throughout Delhi, each of whom looks after a group of retailers. Through the wallet customers may pay recharge their mobile phones and DTH (Direct to Home satellite television), as well as pay utility bills and make domestic money transfers.
Integrating blockchain into the platform brings new opportunities for expanding the Payportal offering. Decentralising servers should reduce security vulnerabilities, but most importantly, it offers a safe and cheap way for overseas Indians to send back remittances. Transactions will be made in the company’s own currency, PPTL Coin, and converted into rupees for deposit with the recipient.
Retailers will pay a subscription fee in PPTL for access to the platform. Payportal will also receive commissions the mobile companies, TV operators, banks and other service providers who are paid through the platform.
Payportal’s roadmap is refreshingly specific and reflects its status as an established company that knows its market and has particular goals it wants to fulfill. So, instead of vague items like “expand into overseas markets” or “advertising campaign”, the roadmap details clear goals such as “finalize an integration with BBPS (Bharat Bill Pay System).” This is expected during the summer and will extend the option for Indian consumers to pay their utility bills through Payportal.
In Q3 Payportal will release new versions of its domestic money transfer (DMT) service to Android and iOS and step up promotion of the new BBPS utility payment services in Delhi.
The focus at the end of this year is on online advertising and developing the blockchain technology needed to decentralise data, collect fees, and effect international money transfers.
2019 should bring expansion, first into the cities of Faridabad, Ghaziabad and Noida, all near Delhi, and then to India’s biggest cities – Mumbai, Bangalore, and Pune or Jaipur. The loyalty program for retailers and distributors will also be developed and implemented.
The Payportal team has considerable experience in the industries relevant to its ICO, particularly payment processing. It has also managed a good balance of technical knowledge, business strategy and marketing. The management team have worked together for some years, and they have brought in an experienced advisory board to help with the specific issues which arise with any token sale.
The team’s leading figure is undoubtedly Alexandr Shishlov, who co-founded Payportal in 2011. Prior to that he was department head of the Interbank Settlement Center for the National Bank of Kazakhstan. Shishlov has run several fintech startups, has years of experience in various payment system companies and coordinated the CISPI World Bank project.
Fellow Kazakhs Pavel Bannikov and Timur Abdulkarimov round out the technical leadership of the company as the respective heads of R&D and analytics.
Head of Business and Alliances Yadhvendra Singh brings a wealth of experience in the telecoms industry while Alok Yadav, who has worked for Payportal almost from the beginning, runs the company’s operations.
Payportal has managed to attract an experienced and international advisory team to guide it through its ICO. Regulatory advice is coming from Daniel Heller, currently associated with the Peterson Institute for International Economics and before that the head of financial stability at the Swiss National Bank. The advisory board is chaired by Michael E. Bryant, a highly experienced veteran of both entrepreneurship and blockchain startups.
All relevant figures have full biographies and LinkedIn profiles.
Token and Token Value
The main purpose of the sale is to raise enough capital to “give us a clear runaway to acquire new customers” and power expansion both within Delhi and across major new markets in India. It will also allow for new licencing deals and more resources for development of the wallet technology.
Fully 60% of funds raised will be put into sales and marketing, with a further 15% earmarked for fees and incentives. 5% will be kept in reserve with the remaining 20% going into product development.
The PPTL token is valued at 0.002 ETH and the sale has a soft cap of 3,000 ETH and a hard cap of 24,000 ETH. 20,000,000 PPTL will be minted, 70% of which will be available during the sale. 15% will go to the team and advisory board and 10% held in reserve.
Any unsold tokens at the end of the ICO will be burned.
After the sale Payportal will issue its own cryptocurrency, the PPTL coin. PPTL token holders will be able to exchange their tokens for the coin at a rate of 1:1. The company plans to list the PPTL coin on crypto-exchanges and expects that “PPTL coins will be exchangeable for fiat currencies and other cryptocurrencies.”
As might be expected from an established company, Payportal has a well-developed social media presence, particularly on Facebook, Twitter and Telegram.
The marketing materials are well-presented and reasonably clear, though some might find themselves wishing that there was more coverage of Payportal’s tech to go with the analysis of the market. There are also mistakes in the English which should have been easily avoidable with some more careful editing.
The fact that they have an existing presence in Delhi bodes well as they already have relationships with customers who use their services, allowing them to build some early momentum. The expansion plans are limited to similar markets within India, which feels more realistic and achievable than generic claims to expand into “the US” or “Europe”.
There is also a good balance at the highest level of the team between technologists and business development. The purpose of the ICO is much more about bringing in new customers to an existing solution rather than building a new technology with no clear idea of who might want it.
The aims of this ICO are relatively modest and seem achievable for a company which has already won a local network of customers. Raised funds will primarily be used to replicate the model in other Indian cities in an ambitious, but by no means unachievable, expansion plan.
There is not a compelling case for the use of blockchain in their current product offering, which seems to work just fine without it. However, it does allow for international transactions and access to the enormous remittances market. There is considerable competition for this space, though perhaps going local and recruiting recipient users in a particular place, in this case Delhi (which, after all, has a population of 20 million people) is enough of a differentiator to capture a market niche.
Payportal’s marketing materials are light on technological details, so there are no assurances that this kind of solution could not be introduced by multiple competitors. However, Payportal already has a market presence and a working product which fulfils a consumer need. Its network of retailers and distributors will be vital in embedding the use of its new services and securing its market position.