Small-Town Merchants are Powering Instamojo's Online Payments Growth Story

Small-Town Merchants are Powering Instamojo's Online Payments Growth Story
  • Instamojo is an online payments platform
  • It lets you set up a store on its website
  • 65 percent of its customers are in non-metro cities

If you are thinking about setting up a small business, such as tuition classes for children or a home-based bakery, accepting payments via cash only may not be a great idea. There’s always the hassle of returning change to customers, apart from having to go to a bank branch to deposit money to your account. It’s easier than ever to receive payments online, with technologies such as UPI and wallet companies picking up pace.

Many small businesses, however, do not have the technical know-how required to set up a website and integrate a payment gateway. Payments platform Instamojo is going after this crowd by allowing people to set up a store on its website to accept orders and payments, and automating processes such as requesting a refund by adding quick links in the emailed invoice.

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Sampad Swain, co-founder and CEO of Instamojo, says the company’s mission is to make online payments accessible to anyone with a bank account and a phone number.

“If the end merchant or end seller - she doesn’t have a website or doesn’t know technology or API, all they have to do is register on Instamojo and create a payment link. It’s a webpage hosted by Instamojo where you host a payment link,” Swain says.

As a merchant, you can share this payment link via email, social media, or the messaging app of your choice. People can use this link to make payments and the merchant gets to track these via a dashboard on Instamojo’s website. If they want more than just payment links, they can create a store on Instamojo’s website.

instamojo tote club payments Instamojo


The Bengaluru-based company’s formula appears to be working. Initially, the biggest challenge for Instamojo was to convince people that you don’t need to be tech savvy to accept payments online, Swain says. However that was back in 2013, when the company had just begun operations. After demonetisation, Instamojo claims it’s seen big growth in the travel and education sectors. Instamojo now has 2.5 lakh merchants on its platform, of which over 30,000 are in these two sectors. Post demonetisation, Instamojo has witnessed a 60 percent increase in adoption of digital payments by the companies in these two sectors.

Most of Instamojo’s growth has come from outside of metro cities, with 65 percent of its customers residing in those areas. Swain says Instamojo’s customers come from over 1,000 cities and towns across India, a measure of its wide reach.

Swain says, “Education, travel, and hospitality are the top categories of merchants on Instamojo. For example, we have a lot of tutors collecting tuition fees and also more organised forms of educational institutions.” He adds the company has found debit card transactions to be much faster than any other method on its platform so far.

“When you pay by credit card or net banking, there is a hoop around two-factor authentication. Sometimes the OTP doesn’t come. The moment you involve more than one party there is a challenge,” he says. With debit cards, you can just use an extra password to process payments and Swain says that saves people a lot of time.


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