“Within 20 months of operation, we had processed LKR 2 billion worth of transactions. Just four months later, we’ve now hit the milestone of processing LKR 3 billion on our platform,” states the Co-Founder and CEO of DirectPay, Kanishka Weeramunda. This achievement puts DirectPay in the ranks of the fastest-growing fintech startups in Sri Lanka.
How DirectPay helps corporates embrace fintech
Since it began operations in 2018, DirectPay has introduced several B2C and B2B fintech solutions. The common thread between them is that they serve as digital payment options serving viable alternatives to cash. These solutions allow businesses to accept payments from customers via scanning a QR code, swiping credit/debit cards, or simply authorising a fund transfer.
A few examples of the many solutions DirectPay offers are a mobile-based payment app, an Internet Payment Gateway, support for remote payments with a link, and a system for accepting subscription payments. The startup’s solutions cover the entire payment ecosystem and ensure a seamless journey for customers and service providers.
Commenting on their rapid growth, Kanishka said, “DirectPay’s solutions are tailored to meet the specific needs of our customers. They seamlessly integrate into the existing backend finance systems, which results in a smooth operation for our clients. From getting the invoice to update the records in the finance system, everything is fully integrated. This has allowed us to help companies transform their digital presence to accept digital payments easily.”
The origins of DirectPay
The idea of DirectPay was born after witnessing how smartphones changed almost every aspect of our lives. However, at the time, Sri Lanka was yet to add payments to this list. Unlike the rest of the world, we were still burdened with carrying a wallet stuffed with cards, notes, and coins.
Initially, they came together and built PayMedia, a FinTech solutions provider that has been in the banking sector for seven years. But it was clear the rise of smartphones would result in the decline of cash and cheques. Hence, DirectPay was born in 2018 as a subsidiary that would specialise in digital payments. But the road that lay ahead of them was a challenging one.
Travel back in time to 2018, and you’d find the idea of fintech was in its infancy in Sri Lanka. Optimistically, the Central Bank of Sri Lanka and LankaClear were already seeing its potential. However, partnering with a local bank was more difficult.
Thankfully, Cargills Bank and its COO, Rohan Muttiah, believed in the startup and came on board to support its efforts. Soon after, DirectPay secured partnerships with Commercial Bank and Nations Trust Bank, which allowed it to accept payments from all debit/credit card providers in Sri Lanka. But the startup didn’t limit itself to simply supporting card payments.
Co-Founder and Director of DirectPay, Dinesh Karunathilaka, shared, “We saw several opportunities in the fintech arena across several verticals. So we began exploring new avenues and launched several new products.” Since then, the startup has come a long way to enable many forms of digital payments and has become a leader in the space.
Along the way, DirectPay has won several awards, including the 2018 Asia Pacific ICT Alliance (APICTA) award in the Consumer category beating 16 countries as well as the Best Start-Up and Best Mobile Payment Application awards at the 2018 National ICT Awards (NBQSA). For DirectPay, going through these competitions offered the startup a means of validation towards creating better quality products.
The hard-learned lessons on the road to building a startup
It’s no secret that building a startup is a journey filled with several challenges. It was no different for DirectPay, which had to navigate complex challenges in a heavily regulated industry. Along the way, the startup and the team behind it have learned many valuable lessons. Speaking to Arteculate, the team shared a few of them.
Cross the chasm to disrupt the status quo
Right from the start, the metric DirectPay prioritised above all was the number of transactions on its platform. “Even if you have a million registered users, if they’re not using your product, then it’s pointless. For us, it didn’t matter if it was an LKR 10, LKR 1000, or LKR 100,000 transaction. Every day we looked at the number of transactions and had it set as our critical KPI,” said Kanishka.
The decision was based on the chasm theory of technology adoption. Initially coined by Geoffrey A. Moore, the theory states five main customer segments across the technology adoption lifecycle. Based on this theory, the startup should focus on one group while using each as a base to market to the next group. But the most challenging step is transitioning the chasm between visionaries and pragmatists. Only after crossing the chasm can a startup say it has disrupted the status quo and created a new standard.
The importance of being agile
By following this theory, DirectPay launched several products. “You shouldn’t put all of your eggs in a single basket. You never know when one product can fail,” says Kanishka pointing to the current lockdown. While QR payments are down as we’re at home, DirectPay has seen a surge in payment links used to accept remote payments. Through this approach, DirectPay steadily increased the number of transactions and hit the milestone of LKR 3 million.
Of course, when building any tech product, it’s essential to be agile. As DirectPay launched new products, Dinesh shared they had to rebuild the platform thrice. Often these new products represented a pivot into new markets. “You have to keep pivoting until you get the business model right. We started in the B2C space but saw it’ll soon be very crowded, so we pivoted into the B2B market.”
Keep your finances in check to stay afloat.
Still, getting the product right is just one part of the equation. Another equally important factor for a startup’s success is keeping its finances in check. As Chief Financial Officer of DirectPay, Maduranga Ginigaddara, bluntly puts it, “If a startup doesn’t have an adequate financial runway, it risks going out of business even before they understand the market. Imagine having built a great product but now without the cash required to sell it. It’s every entrepreneur’s worst nightmare!”
DirectPay’s runway was primarily built through its parent company and funding from John Keells Holdings through the JKX accelerator programme. Through these efforts, the startup ensured it had a steady runway until the product took off. “Fintech products take a longer time to generate revenue compared to other products. But once we start processing large volumes, things change,” explains Maduranga.
Have a solid growth strategy
Likewise, it’s equally essential for a startup to have a marketing plan to acquire customers. For a tech startup like DirectPay, marketing means creating a unique brand and simplifying the complexity of its products. Thereby helping clients realise their disruptive potential of fintech products that operate 24/7, unlike physical banks.
Speaking to Arteculate, Chief Marketing Officer of DirectPay, Mariya Kaed, shared, “As a startup, we focused on using our marketing budget effectively to create impactful campaigns. We helped simplify the complexities of technology with visually appealing content. It greatly helped corporations understand the impact of digital payments.”
As DirectPay evolved and launched many new products, these proposals evolved to offer clients an omnichannel banking experience. In doing so, helping businesses seamlessly embrace fintech. “Whether it’s a startup or a large financial institution, our solutions can easily cater to their needs. Using DirectPay as a foundation to process payments, they can even develop their applications,” added Mariya. This growth strategy paid off as DirectPay hit the milestone of processing LKR 3 billion transactions with only 200 merchants.
Have the right team in place
The most critical element of a successful startup is the right team. This factor is a point that Kanishka emphasises by saying, “Even if you have a brilliant idea and fantastic investors backing you, it doesn’t work out without the right team at the right time.” At every point of the startup journey, the team must understand what’s necessary for growth. It was a lesson that DirectPay learned through its many different pivots and new product launches.
The future of banking
Looking ahead in time, Kanishka believes in the concept of neo-banking to be the future. It defines the bank of the future as a purely digital one. Instead of branches that operate 9-5, we would interact with our bank accounts whenever we wish, 24/7/365. Mobile apps like those from DirectPay have simplified digital payments. Paired with other disruptive technologies like blockchains, these purely digital banks can be made a reality in Sri Lanka.
Elaborating on the startup’s vision of neo-banking, Co-Founder and Chief Operating Officer of DirectPay, Sasindu Pathiranage, said, “The financial industry will soon transform. People will not just have bank accounts but spend larger amounts of money digitally. Where they bank will not be as important as how their transactions are processed. Soon a bank’s top priorities will be security, cutting edge technology, and delivering innovative solutions to customers.”
With DirectPay crossing the milestone of processing LKR 3 billion transactions, it’s now one step closer to making the digital bank of the future a reality.
