Global Fintech Interview with Nitya Sharma, Co-Founder & CEO at Simpl

Please tell us a bit about your journey to build Simpl as India’s fastest growing Buy Now Pay Later

Simpl isn’t a BNPL service; we are not in the business of giving credit. We are a merchant-first, 1-tap checkout network that allows merchants to build deep relationships rooted in trust with their customers. Simpl is a digital Khaata for the digital-first native.

What’s Khaata? Look back at how our ancestors transacted commerce thousands of years ago; it was a system of trust-based commerce via Khaata. The merchant would choose to build a relationship of trust with customers who were loyal by extending a tab, a Khaata where they could buy goods or services and pay later.

Simpl is a digital Khaata for the digital native. Simpl allows merchants to build relationships with their customers rooted in trust and win them over one transaction at a time. Now, in e-commerce poor UX at checkout, speed, and trust are friction points resulting in high cart abandonment and low transaction volumes for merchants. India in particular has high cart abandonment rates in e- commerce, nearly 70%, meaning only 30 out of 100 customers actually end up buying the product. Simpl solves for all these issues with its tech stack for e-commerce.

Of course, this journey hasn’t been easy. Convincing the first set of merchants was difficult since they were going to be the first node of the network, and why would they want to risk it? But we were able to demonstrate the benefits Simpl’s checkout network unlocks, both for the merchants and their end-users. Today, we have over 26000 merchants and millions of approved users using Simpl.

Can you throw some light on how Simpl is contributing towards making “money intelligent” in the Pay Later space?

Simpl is a 1-tap checkout network that makes payments invisible and money intelligent. Simpl makes online shopping hassle-free and seamless. You don’t need to enter the same information multiple times and across multiple levels. There’s no scope of transactional failures. Because our model has trust baked into it the merchant is able to extend trust to the end-consumer through 1-tap checkout, buyer protection and provide a safe and intuitive consumer experience. We enable customers to budget efficiently and embark on smart spend management. While for our merchant partners, our platform brings in more traffic, boost conversions and repeat purchases. Simpl has increased the average order volume by 20-40% and doubled the order frequency. Our business model is clearly working because today we have 26K+ merchants and millions of approved users.

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India’s e-commerce market is expected to reach US$ 111 billion by 2024. What kind of untapped fintech solutions are you planning for your customers?

UX, Trust and Speed are 3 key areas of friction in e-commerce, and I don’t expect this to change overnight. Whether it’s the trust deficit (reflected in the high CoD opted by customers when transacting online) or poor speed and UX, the customer journey is broken and user experience not as great as it could be! Simpl is a merchant-first, 1-tap checkout network designed to ensure there’s no break in the customer journey. We are fixing an information asymmetry and empowering the merchant while enabling a great consumer experience. Simpl is building a connected checkout network, which is neutral, that is open and where everyone has equal access to our infrastructure and our tools.

At Simpl, our endeavour has always been to provide merchants with tools that empower them to provide zero friction commerce, convenience and speed as also ease of use to their end consumers. For starters, Simpl provides a full-stack solution to e-commerce conversion. It enables merchants to give their customers 1-tap checkout, buyer protection, and a pay-later facility to allow them to feel safe and trusted when shopping online.

Our aim is to become the new Visa for intelligent e-commerce, and we haven’t even looked beyond the metros yet. India is far more than its metros, and therein lies the potential to see the ‘Network Effect’ play out. We are also constantly improving our fraud detection models and our credit decisioning models enabled by AI and ML. This will continue to help us keep Simpl safe and prevent cyber fraud. We will continue to pivot on technology to improve key aspects of trust, safety, and ease of use.

70% people in the country still uses COD despite the fact that most of them have bank accounts, UPI and almost 900 million people have debit cards, what are your comments on this?

E-commerce has become popular, especially after the pandemic. But if you look at payments, it’s still cash. There’s a huge trust deficit when it comes to online transactions or moving people to go digital. Even now, you go to rural areas the cash on delivery (CoD) is as high as 90% when it comes to e- commerce, and in urban settings its about 70%, both reflecting a lack of trust. Customers aren’t sure about the quality of products that would be delivered, they aren’t sure if the transaction will go through and when they have to enter (finance) information multiple times or face OTP transaction failure, the customer journey is broken. It’s frustrating. And why don’t customers use credit cards? Because credit card penetration in India is extremely low, 4-5% or even less. There’s a huge untapped market in India given the low credit card penetration and the extensive dependence on CoD. Solve for both these issues, and you have a killer product on your hand.

With the rise of digital literacy, what do you think is the biggest challenge to foster trust between merchants and their customers?

India’s journey started with doubts and low trust in transactions via the Internet (and hence the birth of COD – cash on delivery) and now India is thriving on digital payments and is leading the digital payments revolution. But in e-commerce, trust, or the lack of it is still a huge deterrent. This is evident when you see 70% transactions are CoD-based leading to high inefficiencies for e-tailers (high returns, low conversions, and transaction volumes). Our ancient Khaata-based ledger system solved for this because the merchant trusted by default. They choose to build relationships based on trust when they extended credit to their loyal customers. Khaata is practiced even now in the hinterlands of India, the rural areas and even Tier II towns and cities. In all likelihood, you may still see this in your neighbourhood as well with local dhobi or vegetable vendor extends Khaata for your daily transactions since you are their regular customer. Being able to trust by default is critical if we are to break this vicious cycle, and a network such as Simpl does exactly this. Our business model is based on Trust and Transparency.

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India’s e-commerce domain has transformed the way business is done and has opened up segments like B2B, D2C, C2C and C2B. Could you please throw some light on these segments.

The pandemic accelerated consumer mindset and behaviour into adopting online commerce and digital everything – from accessing education and healthcare to buying essentials and groceries online. This behaviour is n’t going to change and the rapid rise in new segments such as D2C and C2C proves how we have evolved as digital-first consumers. While our B2C customer base grew 3.5x between 2019-2021, this year our focus has been the D2C domain because we believe D2C and Simpl are aligned in a very intrinsic way: We are Defined by Trust; Trust is the currency that builds loyalty and our business. India has a thriving D2C ecosystem with over 800 D2C brands in the country making this an exciting space for us, and a huge focus area. We consider ourselves as a D2C enabler, and naturally we have embarked on building D2C community engagement, on a large scale, across the length and breadth of the country with our D2C Unlocked series, Learn with Simpl series and several other initiatives in the pipeline.

Simpl enables better business for D2C brands; we help double order frequency, increase average order volume by 35-40% and improve conversion rates by up to 65%. For consumers, Simpl offers a frictionless online shopping experience which is seamless, secure, intuitive, and convenient.

What is the best “Digital Experience” for you in the Fintech space?

The onset of UPI has ensured that India has truly embarked on its vision of enabling Financial Inclusion for all. Imagine your nariyal paani vendor to the local sabziwala accept payments via UPI, this is inclusion. We are leading the way globally in digital payments and digital inclusion, financial inclusion. But for the consumer experience to be seamless and smooth, UX and speed at checkout are still things that need to be resolved. The best payment experience is no experience.

How do you visualize the 1-tap checkout industry for 2030?

There’s a huge opportunity waiting for the industry, not only 1-tap checkout but fintech on the whole. By 2030, we will have 9 out of 10 Indians over the age of 15 going online for the first time; the Next Billion represents a huge opportunity for the industry. Assuming that a significant part of the Next Billion users will have a trust deficit when transacting online, it’s necessary to have Trust baked into the business model along with a heightened focus on trust at every stage of the product lifecycle. Building products that will persuade the Next Billion to go digital completely, shifting away from cash, there’s a huge opportunity for 1-tap checkout. Remember, India isn’t a price- sensitive market, it’s a Trust-First market. And our age- old practice of Khaata or the ledger-based transactional commerce that is still being followed across India, is a case in point. Business models that triage on Trust, Transparency and Technology will transform 1-tap checkout when it’s built on data. Remember for 1-tap checkout data plays a huge role because we are using AI/ML models to build robust credit decisioning and risk models. Next, convenience will still continue to dominate how 1-tap checkout evolves; even in saturated markets you can open up new possibilities by solving for convenience.

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What’s your advice to every fintech CEO?

This exists should never be the reason not to build something new. By pushing the boundaries of conventional thinking, you have the chance to build a product or service that will have a lasting impact on the world. But for this to be a part of your vision, you should have an action bias, a crazy bias for it – not be afraid to break, not be afraid to experiment and build something from scratch. We get stuck in the decision stage, but having a set of operational principles, values will help reach decisions faster and do what’s important keeping the most important stakeholder in mind – the customer!

And remember, when you have a long-time horizon, working on Big Things becomes plausible.

Thank you, Nitya! That was fun and we hope to see you back on globalfintechseries.com soon.