FINO PayTech, which recently received an in-principle approval to set up a payments bank, believes it is a strong contender in Maharashtra, central India and parts of north-east. Rishi Gupta, MD and CEO at FINO PayTech, tells Bhavik Nair that the company would be in a position to raise $60-80 million in the next six months most probably via a private placement with strategic investors. Excerpts:
What is your customer acquisition strategy?
In last nine years, we have been concentrated on people largely under-banked or unbanked, and we will continue to serve the same catchment in the urban and rural areas. We will cater to those that have bank accounts, but may be looking for more. As a payments bank, we will not be distracted by building up an asset book, our business will be on the liabilities and transactions side.
How will you face competition from larger players like telcos that already have a large network?
It was expected that the licenses will be issued to those with sizeable reach. If you want to cover the entire country, one or two players would not be enough. There are about 50 banks in the country, including foreign lenders, but even with that number, there is under-penetration in banking and insurance. I don’t think with the entry of another 10-12 banks and small finance banks, the competition would be stiff. Of course, there will be some competition but only in some pockets and in some products. The telecos have a good reach and trust of customers, but they do not have the ability to push money into the system. We have been in this business for years and we understand how the cash management has to work.
Which geographical areas are you focusing on?
We have strong presence from west to east, including Maharashtra, Gujarat, MP, Bihar, Jharkhand, Orissa, West Bengal and some parts of north-east. For us, south is the zone where we do not have too much of exposure except Andhra Pradesh, and in north we have some business in Haryana and Punjab. Our corridor will be west to east.
Will you be roping in a partner?
We believe that to run a payments bank, you need to have partners and we reached out to some players. We are seeing a keen interest.
What are your fund-raising plans? How do you plan to raise funds?
We plan to raise between $60 and $80 million in next six months. We would prefer the private placement route with strategic investors and maybe one or more PE player. If it is private equity, it has to be a long-term player.
What are your mobile wallet plans?
We are going to work on moving the remittance transactions to the wallet platform. Also, most of the big players are trying to come up with their own wallets, so we are looking at it more from an enterprise business point of view.
There is a huge demand for semi-closed and closed wallets on the enterprise solutions. We have FINO Money which is our umbrella brand. We may come out with FINO Money wallet or a different wallet. The uniqueness that we are going to build on our wallet is that it would be an e-KYC compliant.
What segments are you looking to improve on?
FINO has a big platform on the physical infrastructure side called FINO Money Marts which we are planning to double in a year. This customer segment requires assisted services. We will try to capture micro customers on the digital side even as we try to bring out our mobile wallet.