Juspay’s Sheetal Lalwani: payments are all about balancing fraud and friction

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Good morning. Fintech is arguably India’s most exciting start-up sector. The government’s investment in building the unified payments interface (UPI) — the instant, interoperable payment system run on publicly funded infrastructure that celebrates its 10th anniversary this year — has added breadth and depth to digital payments. What began as a way to move money between bank accounts has since become the backbone of everyday commerce, from street vendors to ecommerce giants.

Juspay was founded in 2012 with the goal of reducing friction in online and ecommerce payments in India. The company has since grown into one of the country’s busiest payments infrastructure providers, processing well over 300mn transactions a day, and is now taking that playbook to foreign markets. I sat down with co-founder Sheetal Lalwani for this month’s India Business Briefing Q&A.

Note: this interview has been edited for length and clarity

What was the primary idea behind Juspay when you began in 2012?

Our philosophy, then and now, is that we want to solve a problem that no one’s solving. When we started, we saw that while digital commerce was picking up, there was a lot of friction in payments because two-factor authentication was mandated in India. [All digital transactions — including by credit cards — must be backed by a one-time password sent to a phone.] Conversion rates in payment were pretty low. One in two transactions failed. So we said: “Let’s solve this friction”.

And how does Juspay do that?

Let’s say you are a large ecommerce business, and you need to have the best payments experience for your customers. Your customers want to choose from various modes of payments — UPI, wallets, credit cards, etc. They may also like to use an offer that is available. The ecommerce merchant therefore needs a payment infrastructure that is ultra-reliable, is always up, and can balance these multiple variables. We build that payment layer for our clients — online merchants, banks and others — so that they can give a great experience to their customers. Payment is not core to our clients’ business, but it is super critical. As a user, you may not even see us when you are buying something online. But we are there.

If more than half the transactions were failing earlier, how many are converting now?

Now it’s upwards of 70-80 per cent, depending on the industry.

What is your approach to the global market and how is it different from what it was in India?

When we decided to go international, one of the big investments we made was to rewrite our entire platform. We spent about a year and a half doing it, and we made it an open-source model. This was our announcement to clients that we are an infrastructure company. Open source is powerful, because it helps build credibility. You don’t need to trust Juspay, you can just trust the code. It’s out there. And we got a bunch of our initial clients, large clients, who tried out our code from the public repositories, and played around with it before deploying it. We now have offices in four regions in the world — based in Singapore, Dublin, São Paulo and San Francisco. We have started seeing traction in each of these regions.

Juspay has taken on several non-payment projects too. In the past, you built Namma Yatri, an open-network mobility app that connects commuters directly to taxis or rickshaws, which is now a standalone outfit. What are you working on now?

Outside of payments, we are building what could be called an organisational AI operating system. It’s a workspace plus creation platform — it’s sovereign, fully air-gapped and it’s deployed on the servers of the clients, so both the data and data intelligence reside within the organisation. We have been building this for two years now, and will be announcing something in the next couple of months. It was a little bit of a moonshot for us, but now we have traction. Here too our approach is to keep it open source. We want it to be a proper [Silicon] Valley launch, because that’s the hotbed of AI innovation.

Since you mentioned AI, how do you see AI transforming the payment landscape?

I think a lot of AI’s big impact in payments is not outwardly visible. Infrastructure companies, like ourselves, are using the technology to make operations better. A lot of work is happening on the B2B front, since that is a fairly sophisticated process — AI can improve efficiency in maker-checker systems and other workflows. On the consumer side, it’s slower. AI-based payments are beginning to happen, but there is a lot of regulation and a lot more infrastructure needs to be built. We still have to find answers to a lot of questions: how do chargebacks happen, who will take responsibility if something goes wrong etc. I’d say AI is still in the plumbing layer of payments.

We have raised barely $100mn overall in primary capital. And we have as much cash in the bank now.

We have raised barely $100mn overall in primary capital. And we have as much cash in the bank now.

Fraud is a big challenge. How does India compare to other countries?

The payments business is all about balancing fraud and friction. When you want to reduce fraud, you end up increasing friction. That’s typically the yin and yang of payments.

I think India is on the lower scale when it comes to systemic frauds. These are instances where your credentials are stolen etc. What we really have to worry about is social engineering fraud, where the consumer is compromised by a fraudster. Systemic fraud in India is probably among the lowest in the world, and this is essentially thanks to two-factor authentication in all transactions.

You made losses for about 13 years before posting your first profit of around $14mn in 2025. It’s been a long road. From a financial point of view, where do you see the company going?

Let me provide some perspective on this. When we say the overall business is making a loss, what it means is that we’ve been investing in other things. Our core payments business, for example, was profitable very early in our journey. But then we invested in various long-term projects. When UPI was rolling out, we invested heavily, and we helped build the government’s BHIM app [for instant payments]. It’s now 10 years of the journey, and we have a very good presence in that system. Then we created Namma Yatri. So I wouldn’t say we were running the same business, which was losing money, and that turned a corner. We’ve been creating business pockets. International expansion is not easy, making our infrastructure open source is an investment. Now, even though at an overall company level we are profitable, we are still investing in a lot of long-term initiatives.

We have also been very frugal and mindful of capital. We have raised barely $100mn overall in primary capital. And we have as much cash in the bank now.

Last year, you applied to become a payment gateway yourself, which led to some dissonance in the industry. Competing payment gateways accused you of having a conflict of interest. What was the idea behind that move?

We do not see a conflict of interest. Merchants have a contractual relationship with payment gateways. Juspay’s job is to optimise on all the metrics and choose the most efficient gateway for every transaction. Some payment gateway companies, however, took a stand that they will not support what they call us — orchestrators — becoming gateways. Our focus was the merchants; they know the value proposition. We don’t lock them into anything, such as prioritising our gateway. We give them full flexibility. We’ve not lost merchants at all, and have only grown since.

The other thing is that in India only gateways are licensed. Orchestrators are not. We are a large entity. Now that we are licensed, we are regulated and our entire business gets audited. That is a source of comfort to our customers and the regulators. This is especially key for our banking clients.

What is your proposition for banks? And what is the spread of that business in India and internationally?

Essentially, banks take our infrastructure software and run it on their premises for some of their largest and most sophisticated clients. The bank does not have to invest in creating a product, design and reliable infrastructure or work like a fintech. They can focus on core banking and leave the technology to us. India’s biggest private sector bank, HDFC Bank, works with us. We provide a valuable solution to them, called the Smart Gateway. HSBC is also working with us for their global business. We have already launched in three countries with them, and we have four more coming up in the next few quarters. We have also recently signed up with a large European bank. We will be announcing that partnership shortly.

As a successful start-up, what do you think are the challenges of starting up in India?

Finding good talent and mapping them to solve a problem that aligns with your business is a difficult task. What we have been doing is finding smart kids from smaller colleges and making them work on real-world problems from day one. The challenge is in identifying the right people who align with your culture.

Competition is also a challenge, because this is a market where a lot of people work on similar ideas. And we are a price-sensitive country. So, that combination is tricky. And added to this is the fact that our employees have global opportunities. They can go anywhere in the world.

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Thank you for reading. India Business Briefing was edited today by Mure Dickie. Please send feedback, suggestions (and gossip) to [email protected].