Is it game over for mChek? [What went wrong]

Has mobile payment solutions company mChek shutdown?  From various sources Pi spoke to, its key people have moved on and last we checked, its website was not reachable directly or through Google (if you type in main.mChek.com, you might get in but many links do not work). Technical support numbers listed on their site don’t work. Customers are complaining on their Facebook page. What gives?

Started in 2006, mChek was an early mover in Indian mobile commerce. It had partnerships with telecom operators like Airtel, Banks like Citi India, ICICI Bank and e-commerce companies like MakeMyTrip and Yatra. mChek had also raised $ 10- 13 million from Nexus India which invested in companies like Netmagic and DFJ which counts companies like Path, Yammer and Feedburner in its portfolio.

Sanjay Swamy (ex-CEO of mChek), who quit the company in February, is now the Chairman of Ezetap, a Square like mobile payment company which turns cell phones into point of sale devices using an electronic attachment. Other key people have also left the company, according to sources.

Surely, the company had a lot of things going right for it.  It had marquee clients. It has raised millions from investors.  Mobile is booming, financial services, e-commerce and everything around it is booming too. It even launched in Srilanka and claimed a million users.

But then what happened?

One thing is known: That its end users were not very happy, at least not towards the end. A Facebook page which appears official has customers posting stinkers on the wall. And since February this year, no one seems to have bothered to clean up either. Telephone lines to their listed Mumbai office are also out of order.

The lengthy process of getting an mChek account also seems to have had a role to play. But why was it not simple? Surely the people who designed it knew what they were doing. The signup wasn’t simple enough because of a complex regulatory environment and device dependency was off-putting for customers.

The ecosystem was too fragmented with many giant banks and equally large telecom players having to work with a multitude of merchants in tandem to enable one transaction.

mChek was quite an  idea when it was launched six years ago. The technology was nascent and much of it was still cutting edge. But when it comes to adoption, perhaps it was way ahead of its time.

Six years hence, the technology has matured and is almost commodity stuff now. However, industry watchers say that the operating environment is too complex for startups to work around with ease. Until recently, there weren’t many financial instruments available on the phone either.

Taking a crack at mobile payments in India is not an easy thing to do. Most players operating in this area have been struggling to get users to opt pay with mobile. Connectivity issues in rural areas make it worse. The process is too difficult to become the standard on entry level phones used by people who aren’t all that tech savvy. On smartphones which are more of an urban phenomena, companies have managed to add a layer of abstraction (using apps) to simplify the process. But then, urban users have many other ways to pay for their buy.

What’s your take on the reasons behind mChek shutdown? Did the exclusive deal with Airtel (which did promote the service) stop mChek from fishing for other deals?

Was mChek too early in the mCommerce game?