Note:

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Project details:

• Company Name: Setu
• Website: https://setu.co/
• Product: Reverse Penny Drop
• Company Stage: Mature stage Scaling
• Type: B2B
• Note: This is a product open for entities regulated under SEBI and RBI only.

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Company Profile:

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Current stage - Acquired by Pine Labs in July, 2022 for about $70mn

Monthly bank account verifications processed - 30L

Current monthly uptimes - 95%

Geography - India only (Date storage only in AWS, India)

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Elevator Pitch for the Product: RPD

Hi, I'm a Growth associate at Setu by PineLabs. We are an API Infra company and help businesses with the fastest onboarding, collections, and underwriting journeys.

I have a question for you. Are you using the traditional penny drop or pennyless methods for your customer's bank account verification, only to see significant drop-offs during your onboarding journey?

Ever wondered why? The main issue is that these methods require customers to enter their bank account details—information most people don’t have readily available. That's where Setu's Reverse Penny Drop comes in. With our solution, customers only need to make a simple ₹1 UPI transaction, and you receive all the necessary details instantly, including the IFSC code and Payer VPA. Our clients have seen 30% higher success rates in verifying bank accounts, enhancing the onboarding experience and reducing drop-offs. Make the switch to a seamless verification process with Setu's Reverse Penny Drop!

What Does your product do? - Core value proposition

Reverse Penny drop API verifies the bank account details through UPI. This involves the customer making a ₹1 payment to a specific VPA registered for your organization via any PSP app. In response, we provide the complete name, bank account, and IFSC details. This INR 1 is refunded to the customer's bank account within 24-48 hours.

Highlights:

• Fastest go-live (Within 1 week)
• API integration
• Webhook notifications for each user event
• 2 partner banks at the back end for redundancy
• 95% uptimes

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Ideal Customer Profile:

Note: The rest of the sections of this project only refer to the broking industry. We have not reached PMF for the entities that have a license from RBI. NBFCs are an ICP but which industry in lending, is something we are still figuring out.

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ICP Prioritisation

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The above data indicates that both ICP-1 and ICP-2 have great potential and are worthwhile targets to pursue. I would choose ICP 1 as it is better for in terms of the:

• Higher Adoption and Frequency: A stockbroker is more likely to adopt the product quickly and use it frequently, ensuring faster market penetration and consistent product engagement. This frequent usage is the new customers they will acquire.
  
• Greater Distribution Potential: The high distribution potential means the product can be scaled rapidly across a larger audience. This broader reach is ideal for RPD.
  
• Faster Growth and Market Entry: While ICP 2 (Lender) has a higher payment appetite and larger TAM, the slower adoption rate and lower usage frequency could result in longer sales cycles and slower growth. In contrast, ICP 1's dynamic and responsive nature allows for quicker deployment and scaling, making it more suitable for a new product aiming for swift market entry and expansion.

Market Insights

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• Here we assume our ICP will acquire 5,00,000 customers in a month and the value per transaction on average is INR 2.5.
  
• TAM (Total Addressable Market): This represents the entire market for stock brokers in India, which is 4,902 stock brokers registered with SEBI as of August 15, 2024. This figure reflects all potential customers within the stock broking industry in India, regardless of their specific characteristics or requirements. Source: here.
• Calculation of TAM: 12 months * 5,00,000 transactions * INR 2.5 * 4902 = INR 73,53,00,00,000.

• SAM (Serviceable Available Market): This is the subset of the TAM that includes stock brokers in India who have an RIA (Registered Investment Advisor) license, totaling around ~1,300 brokers. These brokers have specific licenses that align with the product's needs.
• Calculation of SAM: 12 months * 5,00,000 transactions * INR 2.5 * 1300 = INR 19,50,00,00,000.

• SOM (Serviceable Obtainable Market): This further narrows down to the brokers who not only have an RIA license but also have an active digital presence (Application or website) which includes ~147 brokers. These brokers fall into our Ideal Customer Profile (ICP) as they are licensed and have a digital presence.
• Calculation of SOM: 12 months * 5,00,000 transactions * INR 2.5 * 147 = INR 2,20,50,00,000.

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Understanding your users:

This was done via Google meets and phone calls, below is the documentation for the same:

I would not like to reveal the customer's name as that is confidential.

In-depth competitor analysis

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Setu pioneered the RPD product, establishing us as the market leader. With only one competitor and strong market penetration, our current focus is on scaling effectively.

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Designing Acquisition Channel​

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Acquisition Channels: (Mature Scaling stage):

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SEO (Search Engine Optimisation)

The main channel working for our organization is SEO on Google search.

All the data was surfed online via Semrush and Ubersuggests.

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Competitor Keyword research:​

Keywords Competitor Analysis

Competitor website page: Here

Targeted Keywords for ranking

• Bank account verification: 5
• Reverse Penny drop: 6
• Verification: 21

Competitor vs Setu SEO

1. Paid Ads:

Our competitor is using paid ads which are brand-led. This adds up to their website traffic and leads. Whereas Setu today has not explored paid marketing as a channel.

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2. Social Media:

Our competitor also focuses on social media, which Setu does but not actively. Below is an image that shows the social traffic of Setu:

Setu focuses more on Twitter and has a distribution across Reddit as well. We should start focusing on WhatsApp (Maybe).

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3. Why Stock Brokers are Setu's ICP for RPD:

ICP directly searches for our product or brand as it is a product served to a very niche customer base. Regulatory requirements also add up in this scenario. This image shows that the top search term is brand, Setu.

As Setu serves only the Indian market, 96.87% of our traffic is based in India.

This data adds to the ICP prioritization. We have 73.92% traffic flowing from the investing industry and 17.07% from the lending industry. As for RPD, our ICPs are stock brokers and they come from the investing industry.

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• There is no mention of Reverse penny drop on the website.
• We can add other features as well like success rates and minimal drop-offs, while backing it up by case studies with our customers. Also, add reports and analytics.
• For Reverse Penny Drop API, we should mention the CVP of the product backed up by numbers and case studies by existing customers. 

Here is the visualization of the webpage with the target keywords: (Please exci\use my designing skills!)

1. Bank account Verification
2. Reverse penny drop
3. Verification through UPI

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(Narration of the webpage)

Reverse Penny Drop

The customer transacts INR 1 payment payment to a specific VPA registered for your organization via any UPI app, generated by the business which is refunded within 24-48 hours. 

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Request:

INR 1 transaction (Refunded within 24-48 hours)

Response:

• Full name (up to 200 characters)
• Account number
• Account type
• Payer VPA
• Complete IFSC details

Features:

• Best industry uptimes: 2 partner banks in the back end, redundancy at all times.
• Detailed and clean API documentation: Here
• Unlimited Sandbox access: Get started here
• Analytics for conversions: Access analytics specific to a user’s verification status.
  

CTA’s on the page: 

1. Contact Sales - (Auto mail triggered)
2. Checkout API documentation - (Detailed and clear documentation)
3. Get Started with Sandbox - (Have complete access to unlimited SB, no need to contact anyone from the organization.)
   

Additional details on the page

Figma flow of the User journey. (As shown to the customer)

Below is the Narration of the Figma flow:

Image ALT text: Reverse Penny drop flow

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Referral Program

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Why? - We get 65% of our customers through Word of mouth. We currently do not have a referral program for our customers and I propose to boost this through a referral program for our Happy customers.

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AHA moment of the product:

The user experience. Unlike other methods, the customer does not have to enter any bank account details like Account number or IFSC code. A simple INR 1 transaction serves for the verification.

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Platform Currency:

Setu charges for every successful verification, so the platform currency will be free verification or less charge per verification.

Who will I ask for a referral?

You can check out the flow here:

How will the user discover the referral program?

The user will discover this via Bridge (our self-serve portal), where he/she checks the reports and analytics frequently.

The referral program will be open to customers only after they have pushed more than 80% of their volumes (ideally a minimum of 25,000 transactions monthly) on the Setu stack and we have checked their NPS and CSAT scores.

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Where will they discover?

Text displayed: Refer to a Business

Communications: Through Bridge and via Email.

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Template for communication via Email:

Subject: You are eligible to gain a 10% discount

Hi (Name),

Hope all is well!

We are happy to announce that you are eligible to avail a 10% discount on your current RPD pricing with us. Your continuous trust and growth have impacted our business revenue immensely and we have designed a referral program for you.

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How to avail of the discount?

Login to Bridge -> In the home section select "Refer a Business" -> Enter the mail address of the POC/friend and our Sales team will reach out to them immediately.

You will be able to view the progress on your referral via Bridge and will be able to send reminders for the same in case we see this not moving.

Terms and conditions:

The referral should be live and transact a minimum of 5000 verifications via Setu stack. The referral should have a 1-year agreement with Setu. 

CTA:

Avail Discount: Invite via Bridge

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Template for the business that has been referred​

Subject: (name of the person who referred) Wants you to reduce drop-offs in your onboarding journey

Hi (Name), 

Sorry to come unannounced to your inbox. We heard from (Name) that your customers drop off at the Bank account verification step during the onboarding journey. We believe the main reason is that the customer does not want to make an effort to enter their account number and IFSC details. 

What if I told you your customers can skip that step and verify their bank accounts with just an INR 1 transaction through any UPI app, which is refunded within 24-48 hours? Additionally, you get the Complete account holder name and IFSC details as well. 

Check out the flow for Reverse Penny drop here. (Figma Flow attached). 

CTA: Reply to this e-mail to start seeing minimal drop-offs in your user journey.

Milestone on the referral program

1. Refer one business -> they have done 5000 verifications -> avail 10% discount
2. Refer to three businesses -> all three are live and transacting. A total of 15000 verifications achieved -> 1,00,000 free verifications
3. Refer to ten businesses -> All ten are live and transacting a total of 80,000 verifications -> 5,00,000 of free verifications.

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Tracking of the user journey:

Stages:

• Add an email to refer a friend
• Email sent 
• Sales Connect
• Business proposal made
• Evaluation of the proposal
• Testing the product
• Agreements vetting stage
• Agreements signed
• Product integration stage
• Live Stage 
  
  Nudge - Reminder to complete the stage they are at.
  

Dashboard on the referral page for the customer referred who is live

Side note:

I enjoyed designing the referral program the most. I will surely go back and ask the relevant people in my organization why we do not have a referral program and explain to them why I think we should implement one!

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