One good thing about successful entrepreneurs is the resilience with which they cope with their problems. And, interestingly, even long after the dust has settled and their deep cuts have become shiny scars, there is the unmistakable involvement with which these entrepreneurs recount their battles, list the takeaways, and reason out the venturesome trajectories.

Nishanth Chandran, Co-founder and Executive Director, E-Billing Solutions Pvt. Ltd, Chennai (, whom I met on a crisp morning in Nageswara Rao Park a few weeks ago, provided me with all that over a two-hour interaction. Whether the tales are about his boyhood disappointment at not being able to hold on to a domain of ‘national importance’ or the college exploits in the realm of project reports, the early successes in business or the difficulty that entrepreneurs face in the matrimonial market, a steady undercurrent appears to be that Nishanth is enjoying himself. The enthusiasm can be infectious, and I take forward the meeting as an email interview.

Excerpts from the Q&A, in which Nishanth discusses the challenges to e-commerce, offers comments on the recent security measures for Internet transactions, and reassures smaller enterprises about the potential of online revenues.

As a player in the e-commerce space, what do you see as the key drivers to the growth of e-commerce in the country, and how have they been different from what other countries have witnessed?

Key drivers to the growth of e-commerce growth in India include: computer literacy among the youth, exposure to the Internet, awareness of the online concept, attractive schemes and advertisements for e-shops, and above all its role in cost-cutting and time-saving.

However, people in India are not much exposed to or familiar with online shopping due to the lack of the touch-and-feel they are used to. Also, cost is a major hindrance; online stores are costlier than offline supplies, which is exactly the opposite of the situation witnessed in other countries.

In the rest of the world, people find online shopping more suitable as they get wider options, that too at a discount. And with a lot of information available on the product, a comparison with a similar range of products is made easy.

In general, any merchant planning to set up an e-commerce shop has to understand that people don’t accept a vendor unless they perceive a combination of: Finest services, absolute support, trouble-free process, and most importantly, cost-effectiveness with speed.

Are there hurdles to the growth of e-commerce that can be effectively tackled through a change in the policy regime?

Indian e-commerce volumes are still low compared to the world markets and hence the transaction discount rate or the merchant discount rates charged by banks and payment brands such as Visa, Mastercard are on the higher side. This situation will hopefully change as the transactions increase in volume and the fixed costs associated with the banks and other stakeholders are met.

The second hurdle is that we have many restricted categories, and limitations for certain services such as recurring facility. Businesses where the customer has to pay a small sum on a monthly basis (as in the case of club membership or magazine subscription) do not benefit from e-commerce, as there are many restrictions imposed by the Reserve Bank of India on recurring billing.

Is the potential of e-commerce appreciated enough by our enterprises, large and small? How prohibitive or attractive are the costs for businesses that wish to go online?

E-commerce growth is still the next big thing in India, and right from a small business to large corporations, enterprises have taken this seriously. We see many large business houses forming e-commerce divisions; and many a product launch or promotion is done online, apart from the traditional media route.

The cost of setting up an e-commerce business is very affordable even for a small business owner. The pricing is very much scalable for any business. The business owners can either choose to pay a large setup fee and a very low transaction cost or an affordable setup fee with a higher transaction fee. However, lower setup and higher transaction fee can be upgraded once they see their business grow.

To what extent are the fears of hacking and other threats real? Do we have the countermeasures in place?

Hacking, phishing, and carding are the common online threats which every online business will face. However, these problems can be overcome if the right security standards are followed.

As the head of a company that was among the first in India to go for PCI DSS (Payment Card Industry Data Security Standards) certification, let me offer merchants and consumers a few tips as safeguards against hacking:

1. Always use strong passwords that contain alpha, numeric and a special character.

2. Change passwords every 30 days; let it not be one of your last 3 or 5 passwords.

3. Host your website with a reputed hosting company which follows strict security standards.

4. Enquire whether your hosting company uses a firewall and find out what ports are blocked.

Plus, have a policy to backup your data frequently.

Your views on the recent measure to safeguard e-commerce through 3D authentication.

While the ‘3D Secure’ has complemented the state-of-the-art risk management in EBS which checks across 600+ rules, we find that the new initiative suffers from many limitations with a potential to adversely affect businesses. For instance, how many passwords and logins can a person remember? Then again it’s an additional imposition on the customer. We have begun seeing hackers sniffing this password by infecting computers with Trojans to steal information.

Let us not forget that the frauds happening from Indian credit cards are at about 0.16 per cent of transactions as compared to as much as 4 to 5 per cent in the field of international cards. The RBI’s new regulation of mandating 3D Secure covers only domestic transactions.

Thus, the new system has its own benefits, but has drawbacks too. As a result, the number of transactions has dropped down considerably; and many transactions are termed as failed transactions.

Historically, the 3D authentication was implemented in the international market long back; a small proportion of cardholders registered themselves for this, and when there were reports of data compromise, the system was made optional. My view is that in India, too, the choice should be left with the cardholder and the merchant, as regards 3D Secure.

Does the mobile platform pose its own set of challenges to e-commerce?

There are more mobile users than computer users in India. Mobile platform, being quicker and increasingly ubiquitous, actually complements and accelerates e-commerce growth. Today, many mobile handhelds offer a full browser experience thus making it easier for a mobile consumer to make a transaction on the move. When compared to the cost of device used for e-commerce transaction, it comes with such a low price tag making it affordable to all classes of people, thus encouraging more mobile-based transactions in contrast to e-commerce.

We are already witnessing an increasing number of transactions coming from mobile phones as compared to last financial year. Most merchants today have a separate section for mobile phone users, which optimises content for mobile phones. Many airline-ticketing portals have gone one step further in developing a mobile application for seamlessly booking a flight ticket right from your mobile phone.

What do you see as the common myths about e-commerce?

Most of the myths are slowly beginning to fade, however some of the persistent ones are as follows:

• Credit card used online can be stolen: This is not true as credit cards used online are much safer compared to handing the credit card to a bearer in a restaurant.

• Online shopping is unsafe: As in an offline scenario, where it is very common that one goes for shopping after seeing the merchant’s establishment, brand reputation, and quality of merchandise or service etc, so too in an online scenario, one has to look at the website, study the brand reputation and customer feedback before making a buy. For example, a simple Google search about a particular website will reveal a lot about the merchant.

• Only credit cards are accepted online: Today there are many options such as debit card, netbanking account, and cash cards.

• Most products are not available online: Almost every product from grocery to car is sold online. Online shopping is not restricted by geographies, as anyone can shop anytime 24x7.

• E-commerce service quality is poor: It is hard to generalise e-commerce quality as poor. It totally depends on the business establishment and has nothing in particular to the nature of the e-commerce industry.

• No bargaining is possible: Many consumers negotiate with the merchant over the phone and we see them getting a discounted price for the same.

In summary e-commerce is very much similar to the regular shopping; the only difference is the mode of shopping, where everything is online, and open 24x7.


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