Innovation through infrastructure in India: lessons from scaling Stripe engineering in Singapore
For more context on why I’m in Singapore and the engineering culture in APAC, check out Observations from APAC and Engineering in Asia.
Last year I spent some quality time in Bangalore with Stripe’s India team, learning about the tech industry and meeting with companies and engineering leaders. It’s an incredibly rich culture and tech ecosystem, and I was impressed by the strength of domestic companies — some of which have been notably going head-to-head with international players arriving on the scene. Here are just a few famous rivalries you may have heard about:
- Paytm vs. PayPal and Google
- Ola Cabs vs. Uber
- Flipkart vs. Amazon (though, this is now Flipkart+Walmart due to the world’s biggest e-commerce company acquisition)
There are a large number of engineering offices for US companies (notably Microsoft and Google) and more keep coming — e.g. Uber’s engineering team in India grew from 0 to hundreds in just a few years. India also remains a top choice for fast-growing startups across Southeast Asia. These teams are often extensions of a broader engineering org and are not building specifically for the local market. In contrast, Stripe’s goal is to build for APAC from APAC — with locally staffed, cross-functional teams focused building for the markets we are in (and yes, Stripe is now hiring in Bangalore).
I also learned about the India Stack:“a set of APIs that allows governments, businesses, startups and developers to utilise an unique digital Infrastructure to solve India’s hard problems towards presence-less, paperless, and cashless service delivery.” The development of these APIs is led by iSPIRT, “a volunteer driven, not for profit think tank, committed to transforming India. […] it is a part of the iSPIRT’s mission to build India as a software product nation.”
It was inspiring to hear how often India Stack abstractions came up in conversation and how much tech companies are working to incorporate them into product and business plans. The impact has been huge and is growing fast — there’ve been over 27 billion Aadhaar authentications to date, while UPI transaction volume has increased by over 400% (!) in the last year.
Here’s a primer on what these abstractions mean:
Aadhaar
Aadhaar and the Aadhaar Auth API handle personal identification. “Aadhaar” refers to a 12-digit unique ID number issued to all Indian residents by the Unique Identification Authority of India (UIDAI). Numbers are linked to registered personal attributes, such as demographic info (e.g. name, DOB) and/or biometric data (fingerprints). You can verify your identity online using your unique number and submitting it alongside the right demographic/biometric information. This is roughly the digital equivalent of presenting two forms of matching ID.
Fun fact: the word “aadhaar” means “foundation” or “base” in Hindi, as it’s a critical underlying component for the India Stack.
eKYC & eSign
These are terms you’ve likely heard of and reflect two sides of an online transaction. KYC or “know your customer” refers to customer identity verification done by a business or entity. Different forms of KYC are required for certain industries, but it’s also used by businesses to assess/manage risk. eKYC and eSign both leverage Aadhaar — the former enables an entity to digitally verify their customer’s identity, and the latter allows a customer to digitally affirm and “sign” their own identity.
UPI = “Unified Payment Interface”
UPI refers to a full suite of API standards (and use of them) that enable instant, real-time payments using bank-to-bank transfers via easily accessible reference numbers (e.g. a phone number, or, yes, Aadhaar). UPI was developed by the National Payments Corporation of India (NPCI), a non-profit organization expressly created to provide unified infrastructure to India’s national banking system. First piloted in April 2016 with 21 banks, it’s now live with over 100 and continues to grow rapidly.
But what’s most interesting about UPI is the seamless user experience it enables for Indian consumers. In the US, you might use Venmo or PayPal to send/receive money using your email address, but to actually get the money into your bank account, you need link it properly with each service and then remember to transfer it out. With UPI, money is instantly transferred from one bank account to another—this also works across any number of accounts from different banks, and can be used to pay businesses too. The growth and standardization of UPI is particularly interesting to watch in the region, as new/disparate digital wallets are appearing in every market.
DigitalLocker
The latest addition to the India Stack, DigitalLocker is a personalized cloud storage space that organizations and people can use to store and retrieve secure documents. And naturally, it leverages other standards such as Aadhaar for authentication and eSign. I.e. Imagine a government-issued secure combo of Dropbox and DocuSign
India Stack’s vision goes far beyond what most governments have (or even plan to have?) in terms of digital identity, verification, and monetary mobility via bank-to-bank transfers. First kicked off in 2009, it has come a long way in a relatively short amount of time and I’m really curious to see how much advances in the next 10 years.
What else?
What do you think about the India Stack and its potential impact on the economy? Have you heard of or seen other similar government initiatives? I’d love to hear your requests for topics to write about, recommendations for people to meet, or observations of your own.
Thanks to Dian Rosanti, Edward Chiang, Gloria Lin, Michael Manapat and Sara Tillim Adler for their help with this series of posts.
Next up: I’ll share a primer on digital wallets and their proliferation across APAC.
