Bangalore: Sanjay Swamy has hit it off with the big daddies of telecom and banking— Bharti Airtel Ltd, State Bank of India and ICICI Bank Ltd—offering their customers options to make payments over the increasingly ubiquitous mobile phone.

The cheery Swamy heads Bangalore-based start-up mChek India Payment Systems Pvt. Ltd. Its payment feature comes inlaid on every subscriber identity module (SIM) card issued by Airtel and Tata Docomo, allowing customers to use it through a built-in menu rather than a text message or mobile Internet.

Right call: MChek chief executive officer Sanjay Swamy believes the key to cutting big deals with industry leaders is to ‘keep showing up’. Hemant Mishra/Mint

The Silicon Valley returnee who used to be a director with San Francisco-based Portal Software Inc., now acquired by Oracle Corp., adds, “Their (the bank’s or telecom operator’s) reputation is at stake when they associate with a start-up. The start-up has to be stable."

MChek was incubated at Mumbai-based technology company A Little World Pvt. Ltd.

In 2006, it was spun out as a separate entity with funding from venture capital firm Draper Fisher Jurvetson and angel investor Rajesh Jain; Jain brought in Swamy to run the show.

The company, which today employs at least 100 employees, has five areas of focus—bill payments, Internet shopping, over-the-counter purchases at merchant establishments, mobile banking and enabling payments for the bottom of the pyramid.

Mobile commerce started in India some four years ago but failed to take off for varied reasons, including regulatory clearance, low telephone penetration, expensive mobile phones, lack of applications that work on all phones and customer reluctance.

Over the years, many of these issues have been sorted out. Mobile phones have become cheaper, the number of cellphone connections has bulged to at least 450 million and applications such as mChek’s work across phones, including on the Rs1,200 Nokia 1100.

But the country’s central bank, the Reserve Bank of India, permits only banks to offer mobile banking through a customer’s bank account or a credit card account.

Comviva offers mobile payment solutions such as remittances and a mobile wallet, both of which India does not allow, to 40 customers across emerging markets in Africa and South-East Asia.

Nevertheless, bankers foresee a bright future for mobile commerce in India. Sanjeev Patel, head of direct banking at HDFC Bank Ltd, thinks mobile banking has the highest potential among all direct banking channels, which include automated teller machines, the Internet and the call centre. “My whole customer base has a mobile phone but they may not have a personal computer," he says.

Today, mobile banking largely deals with enquiries. Patel aims to broaden this to include bill payments and top-ups on prepaid mobile connections.

Patel is not the only optimistic one. Kunal Pande, director of advisory services, KPMG India Pvt. Ltd, sees mobile payments growing 10 times in the next five years “without any regulatory changes".

Swamy also aims to grow the number of transactions his company handles by 10-fold in five years—from one-two million transactions a month now to 10-20 million transactions a month. He believes mobile commerce will flourish first among the rural masses to disburse and repay microfinance loans and government disbursements such as the National Rural Employment Guarantee Scheme, India’s flagship welfare programme that promises 100 days of employment a year to poor rural households.

Bright expectations aside, “the business model for mobile commerce is still evolving", says Suresh Anantpurkar, vice-president, products, at mChek. Given that customers are not charged for routing their electricity and water bill payments over the mobile phone, volumes need to be really high for all players in the ecosystem to make money.

MChek says it earns revenues but declined to quantify it.

Over the years, mChek aims to expand to overseas markets. In fact, one of the firm’s first deployments was with Dialog Telekom Plc in Sri Lanka, enabling an array of mobile payments ranging from prepaid top-ups to mobile banking. Currently, pilots are under way in Kenya, Tanzania and Nigeria, while Vietnam is set to go live by the end of this fiscal. Enquiries are also coming from Nepal and Bangladesh, says Swamy.

Interestingly, the three-year-old start-up has attracted some international talent. An American, Valerie Rozycki, heads strategic initiatives; a Sri Lankan, Ravi Abeysekera, is the director of programme management; and a Canadian, Jamie Spence, heads delivery. The company has also had interns from top universities such as Kellogg School of Management and Stanford University.

“Sanjay (Swamy) has brought in a Silicon Valley touch, a flat organization with lots of discourse," says Rozycki, a Stanford University graduate who used to work with eBay Inc.

Outside of mChek, Swamy—who lives in a patch of Bangalore that yearns to recreate California with its palm tree-lined boulevard and green lawns leading to duplex houses in Adarsh Palm Meadows, a gated community in Whitefield, east Bangalore—finds time to hand-hold entrepreneurs.

In 2006, he invested $50,000 (Rs23.5 lakh today) in a photo printing portal,, now acquired by online retail firm Quizzed about angel investing, Swamy refutes being an angel investor. “It’s more about meeting and hand-holding entrepreneurs rather than investing. At that time, needed money." On Sundays, he often has breakfast with advice-seeking young entrepreneurs, discussing business plans at the plush Palm Meadows club.