Bengaluru-based mobile payments company Novopay Solutions has seen a five-fold jump in sales of its mobile point of sale (M-PoS) machines following the government’s decision on demonetisation. Encouraged by the huge demand for going digital by small businesses even in remote corners of the country, Novopay Solutions has plans to expand its network of outlets — local kirana stores that operate the assisted wallet for users — to 100,000 outlets in the next six months, a growth of 150% from its existing network.
The company allows users with smartphones and feature phones receive and withdraw cash through the Novopay wallet at its network of retail stores across India. Currently, it has 40,000 outlets, which offer ATM-like services for the wallet customers. The company has a tie-up with RBL Bank across 20 states to offer its wallet services.
“Demonetisation has brought in an opportunity and its own challenges. The interest level for opening Aadhaar-based outlets has jumped by five times in the last month. We have sold 2,500 M-PoS devices in the first two weeks of December as compared to about 500 a month prior to demonetisation,” Srikanth Nadhamuni, chairman of Novopay Solutions, told FE.
There is a huge interest in going digital among the masses. A lot of people who were sitting on the fence earlier have shown behavioural shift in the country. Even small medical stores, which were earlier not accepting credit cards, are now accepting even for a small transaction of R100, he said.
Novopay Solutions, a three-year-old start-up, is witnessing a fast pace of growth in transactions at its outlets over the last two years. The company, which saw a gross transaction value of R600 crore in 2015-16 across its outlets, is set to achieve 200% growth during the current financial year at R1,800 crore, Nadhamuni said. However, its turnover for FY16 stood at R15.31 crore, according to a filing with the Registrar of Companies.
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Following a sudden demand for digital payments post-demonetisation, the company expects to more than double its transaction value during the next financial year. Transactions at its outlets include deposits, withdrawals, remittances, utility bill payments and recharges, among others.
The company is now all set to launch loan products for micro, small and medium enterprise customers, who are normally deprived of bank loans and depend on money lenders. “There is a huge demand for loans among the MSMEs. We have tied up with IDFC Bank to introduce loan products to small business enterprises who are deprived of bank loans. We have conducted an internal pilot for this scheme and are now rolling out the first loan product later this week starting from Mumbai,” Nadhamuni said, adding that it would tie up with two more banks shortly to expand its offerings.
Among other initiatives, Novopay has started selling two-wheeler insurance products at its outlets in an arrangement with Tata AIG. It plans to launch other insurance products very soon, he said.