Mumbai-based ftcash was set up in June 2015 by three entrepreneurs—Vaibhav Lodha, Sanjeev Chandak, and Deepak Kothari—with a singular aim to empower micro-merchants and small businesses with the tools required for digital payments and loans. “By aggregating all payment methods, including credit/debit cards, net banking, various mobile wallets, UPI, and PayPal, ftcash creates an open architecture-based platform for merchants to initiate digital payments in less than 5 minutes,” co-founder Vaibhav Lodha tells Sudhir Chowdhary in an interview. Edited excerpts:
You’ve completed one year of operations. How has the journey been so far?
The most important phase of our journey was when our product was in the pilot stage. Since Indian merchants and vendors were the primary inspiration behind the product, we wanted them to be part of the pilot run. We had no branding or advertising, and this made them uncertain of the system and its efficiency. After spending a considerable time initiating merchants into the system, we finally won them over once they saw money reaching their bank accounts.
Our operational model was noticed by PayPal, who provided support in developing our product. We are currently present in Mumbai, Pune, Surat, Jaipur, and Hyderabad, and plan to reach a total of 10 cities by the end of the year. We also recently raised funding in a pre-Series A round from 500 Startups and our existing investor, IvyCap Ventures.
What are the challenges faced by micro-merchants and small businesses?
Among the challenges merchants face in adopting digital payments, the issue of connectivity—especially in the country’s rural areas and tier 3 and 4 towns—is a major concern. Moreover, there is a lack of avenues for small and micro-businesses to secure working capital and small-ticket loans for day-to-day operations. They often have to rely on unregulated local money lenders who charge premium interest rates for even the smallest requirement of capital.
How has your start-up added value across verticals?
With ftcash, offline retailers and neighbourhood merchants and service providers can make digital transactions and eliminate the need for cash. They can send and receive payments with just a basic feature phone. Customers can receive a bill as well as pay remotely using their mobile phones to anyone, from the milk vendor and the local retailer to the car service centre. Customers can also discover merchants and vendors around them who are on the platform, while merchants can run hyperlocal promotions.
Ftcash also assists small entrepreneurs, traders, and MSMEs to secure working capital and small-ticket loans for day-to-day operations from financial institutions with its unique and proprietary transactional data. The digital record of transactions is an efficient way to measure the merchant’s creditworthiness. Some of them have now received loans from NBFCs on the basis of their billings on the platform. We have reached over 5,000 small businesses and micro-merchants across India.
Going ahead, how do you see ftcash positioning itself in the fintech space?
The fintech space has witnessed a innovations such as e-wallets, pocket wallets, mobile wallets, and the unified payment interface (UPI). UPI, in particular, is one of the most exciting technologies to be introduced in India and has immense potential in the digital payments space.
Micro-lending is set to be the next big segment within financial technology over the next year as the sector continues to increase its focus on the MSME industry. While we have already established our presence in the small-ticket loan segment, our target for the future is to provide more medium to high-ticket loans to merchants. This will provide them with easy and quick access to credit, help them to increase their inventory to match demands and to scale up their operations over a period of time.
Ftcash will continue to play an integral part in driving fintech adoption, especially in the high-potential MSME sector. Our aim is to extend our innovative transactional services to one million merchants over the next four years and disburse 1,50,000 loans.