Targeting offline business, Paytm shifts cashback from P2P payments to merchant payments

Alibaba-backed digital payment firm Paytm has announced to shift its focus to offline merchant payments from incentive-led peer-to-peer (P2P ) UPI payments.

The payment firm will now invest money in offline merchant expansion, for which it claims to have high-frequency usage. It plans to partner over 20 million kirana stores enabling them to accept the digital mode of payments including UPI, wallets and cards.

The move is part of the next growth strategy, where Paytm eyes to reach out to smaller cities and villages.

By investing in real merchant payments even in the remotest part of our country, we will help expand the vision of Digital India to the grassroots.” said Deepak Abbot, senior vice president of Paytm in a press statement.

The Noida-based firm, by cutting cashback on P2P payments, believes that Paytm users, who have been using the app for long now do not need cashback push to keep transacting on the platform.  Instead, cashback will be given to those who are not yet part of digital payments, the company said.

The move will further also help weed out artificial transactions on the platform. Besides, it also plans to invest in lending and insurance to help merchants get better access to capital and provide more financial security.

In May, it claimed to clocked over 70 million of the estimated 120 million UPI-based merchant transactions. With about a 10% MoM growth in this segment, it has claimed to have 60% of UPI-based merchant payments market share.

In FY 19 Paytm clocked about 5.5 billion transactions. The payment major aims to cross over 12 billion transactions in the next 18 months.

In offline merchants base segment, PhonePe, which has about 1 million offline merchants, competes against Paytm. Google Pay has also piloted the offline payment service with kirana stores.

wallet

As E Wallet plays a mighty role in today’s business world, Roamsoft developed a digital wallet solution, RPay with mobile friendly features, well documented API s, plug-ins that suits all major Ecommerce platforms.

Source : https://entrackr.com/2019/06/paytm-cashback-from-p2p-payments-merchant-payments/

BharatPe sets sails for providing credits with cheaper interest rate to merchants

To head towards that one goal of business – profits, every startup has to think up ways to monetize efficiently. For digital payments startups, especially for the ones keenly focussing on the merchant side of the business, credit as a monetization avenue really becomes the need of the hour.

One such startup – BharatPe – that is a digital payments platform and has a separate app for merchants, has also started providing credits to these merchants digitally.

It counts on interdependent cyclical relationship of credit and application usage to increase the revenue on its platform. How? More usage of digital payments meaning more scope for lending, and higher the need for credit more the usage of this applications.

This has been done keeping in mind that these unorganised small merchants find it difficult to procure loans from regular institutions, be it NBFCs  or banks or others in the game.

The company that has onboarded with 7 lakh offline merchants on its platform till now has now partnered with NBFCs like Apollo Finvest to offer loans with ticket sizes between the range of Rs 10,000 to Rs 1 lakh at a minimum interest rate of 1.67%, lower than most in the industry.

The target is that at least 20-25% merchants on the platform use the credit services, making for a healthy, efficient, and successful revenue model.

Apart from monetization, this will also help the company in scaling up from the current figures of 10 million transactions worth $400 million altogether to the total payments on the platform reaching around a billion dollars, as co-founder of BharatPe Ashneer Grover told ET.

Given the importance of credit to merchants, BharatPe isn’t the only fish in the pond doing the business of lending to the merchants. Several others like Cars24, Flipkart, Ola and other pure-play fintech platforms are doing the same.

Two differentiators BharatPe is counting on to scale the business and credit facility in this highly competitive market is the separate focus on merchants via the BharatPe Merchant UPI platform powered by QR codes and the low-interest rate.

wallet

As E Wallet plays a mighty role in today’s business world, Roamsoft developed a digital wallet solution, RPay with mobile friendly features, well documented API s, plug-ins that suits all major Ecommerce platforms.