Payment Links Spark Merchant Ecosystem
Sampad Swain, CEO of Instamojo, on building ecommerce infrastructure for D2C 2.0
Instamojo’s payment link grew like a user acquisition loop, not just a checkout tool. Every merchant sent links to buyers over WhatsApp, SMS, or email, and some of those buyers were micro sellers themselves who realized they could start taking payments the same way in minutes, with only a bank account and phone number. That turned ordinary payment traffic into new merchant signups, which is why the company spent its early years making the link simpler and easier to share.
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This worked because Instamojo targeted very small Indian merchants, freelancers, teachers, homemakers, and social sellers, who were not going to build a website or integrate a gateway API. A link was the whole product. That made sharing the growth channel and the product experience the same thing.
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The loop also lowered customer acquisition cost. Instamojo said 80% of new merchants were arriving through word of mouth, with roughly 1,200 to 1,500 merchants joining daily and CAC around $1 to $2. The merchant’s own customer list became the distribution engine.
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That distribution advantage shaped the business model. Instead of chasing big merchants like a classic gateway, Instamojo went after a huge base of tiny sellers doing up to about $10,000 a year in sales, then layered on storefronts, shipping, marketing tools, and subscriptions once trust and traffic were already in place.
The next step is turning that same merchant graph into a broader commerce network. Once payment links bring in sellers cheaply, the company can attach storefront software, logistics, promotions, and eventually services from third parties, which moves Instamojo from a simple payment utility toward the operating system for India’s micro merchant economy.