One fintech veteran from India found out the hard way why “Mexicans love cash.”

Before he arrived in Mexico, Delhi-born Arpit Gupta designed and built Formula race cars in Europe. Back in India, he had a brief stint as a product manager at a fledgling digital payments company — one which, at the time, had fewer than 20 employees. That company, Paytm, which he left in 2014, is about to go public in what’s likely to be India’s largest ever rupee-denominated IPO. Gupta, now half a world away in Mexico City, is trying to replicate his former employer’s successes and build a mobile payments company in a country that’s still stoically clinging onto cash.

Paytm began as an online service for mobile top-ups — a great use case for digital wallets, recalled Gupta, who is now 39 and has close-cropped hair and gently graying sideburns, in an interview with Rest of World in the upscale Mexico City neighborhood of Polanco. “Consumed on mobile, needed on mobile, but the transaction still happens offline,” he said. “Why? That’s how it started.”

Even in 2014, Gupta believed there were enough similarities to be able to “copy-paste across any emerging market.” Armed with that belief and heartened by the inexorable expansion of Paytm across India, he moved to Mexico’s capital and launched UnDosTres with his former business school classmates: “a one-stop shop for middle-class Mexicans,” Gupta said, to pay their bills, buy movie tickets and bus fares, and top up their mobile phones. It was to be a mix of Oxxo (Mexico’s answer to 7-Eleven), Elektra (an appliance store with bank and money transfer branches), and Coppel (a retailer and lender for working-class Mexicans). 

“But when we started,” Gupta said sheepishly, “we started naively. And we got hit bad.”

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