There is light at the end of the payments tunnel. It’s from the train called consolidation.

Just two years ago, peer-to-peer payment app Chillr was a breath of fresh air in a market where competition was mostly walled-garden wallets or cumbersome bank transfers. Chillr’s technology and user experience set out to make fund transfers from bank accounts easy and quick.

And now it is in the middle of seeking a sale. It has two big suitors in the form of caller identity service, Truecaller, and one of India’s largest private sector banks, HDFC Bank, confirmed three sources close to the development.

It could be a few months till full details like valuation emerge, as the two companies involved will need to do due diligence and put a price tag on the deal.

Nonetheless, Chillr’s potential sale is a signal of things to come. Kunal Walia, founder of boutique investment banking firm Khetal Advisors, says a consolidation in this space is inevitable. Because:

  • Peer-to-peer payments is still a small market with very low margins, leaving little room for many players
  • There isn’t much differentiation in service
  • Paytm* is a market leader with an unassailable lead

The original “WhatsApp for Money”

Chillr launched in 2015 with a simplified and easy-to-use layer over a banking transfer standard, Immediate Payment Service (IMPS). IMPS allowed people to transfer funds to others using an account number linked to a mobile number.

But then, only a year later came another funds transfer standard, Unified Payments Interface (UPI), whereby money could be sent to another person using just an email id-equivalent called a ‘virtual payments address’. UPI was vastly simpler than IMPS.

Then, in November 2016, the Indian government demonetised over 85% of the currency notes in circulation. As most cash got sucked out of the economy, people flocked to digital payment startups. The government too got into the act and launched BHIM, a money transfer app based on UPI.

The one-two combination of UPI and demonetization became a survival test to pick out the fittest. Chillr didn’t exactly finish first.

Company Monthly Users (in million)
Paytm 40
Bhim 4
PhonePe 6.5
Chillr 2
Source: Companies

Chillr’s original vision was to become the “WhatsApp for Money”. For Indian startups seeking funding, “Whatsapp for X” was the new “Amazon for X”. Except that Whatsapp and Amazon were both not just present in India, but dominant as well.

Anyhow, with that kind of a pitch, Chillr was able to raise $6 million in a series A round from Sequoia in 2015, within just eight months of its launch.


Arundhati Ramanathan

Arundhati is Bengaluru-based. She is interested in how people use money in the digital age and how new economies will take shape based on that interaction. She has spent over 10 years reporting and writing on various subjects. Previous stints were at Mint, Outlook Business and Reuters.

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