No change? No problem

Most people will know the hassles of making payments to a small merchant—be it your newspaper vendor or the cable guy, there are moments when you either have no cash or the wrong change.

The idea of FTcash is to solve this issue by providing a mobile platform where customers can make online payments to micro-merchants, retailers and small businesses. The platform is an aggregate of payment gateways options, including debit cards, credit cards and mobile wallets, which customers can choose from. The app is available for all Android smartphones, and is free to download and use.

Besides, FTcash also acts as a facilitator in lending money to local merchants from various non-banking financial companies (NBFCs).

FTcash won the mBillionth award 2016 in the business & commerce category.

Founded in 2015, this Mumbai-based start-up was the brainchild of Sanjeev Chadhak, Deepak Kothari and Vaibhav Lodha. The trio are not newbies to the financial world. While Chadhak was deputy chief financial officer of Deutsche Bank India before starting FTcash, Kothari was a senior chartered accountant and had worked as a management consultant with Grant Thornton India. Lodha had worked as a director with XPrize, a non-profit organization as well as with the World Bank among other international organizations.

“Every Sunday, we have our newspaper guy, dhobi and milk guy asking for money and the immediate response usually is ‘baad me aana’ (please come later for the cash). We had these issues. It’s inconvenient for the merchants also. We have to figure out a way which makes sense for these guys. So, we researched a little bit on what problems they were facing,” said Lodha.

During research, they found out that most local merchants cannot afford to buy the portable machines that are used for cashless transaction. Another challenge is the low penetration of Internet in India.

“We have new technologies, mobile wallets and everything, but these micro-merchants are far more comfortable with the existing infrastructure itself, which is their bank account. So, that’s why we created the FTcash platform, which works simply on a feature phone and a bank account,” said Lodha.

At present, around 3,000 local businessmen or micro-merchants across the country are registered on the FTcash platform, though a significant portion of them are based in Mumbai. When a merchant is registered with FTcash, they are instantly visible on the app. A customer can search for these merchants on the app and then make the required payment through multiple payment options available on the platform. But for those who do not want to download the app, merchants can send the FTcash hyperlink through an SMS to the customer and make the required transaction.

FTcash has also tied up with trade associations, including Retail Associations of India and Travel Agents Associations of India, to expand their business.

Earlier this year, FTcash received around Rs1 crore of seed funding from Ivy Camp, a platform created by venture capital firm IvyCap Ventures. It is currently in the process of raising Series A funding.

“One of the biggest challenges is cracking the unorganized sector. Since it involves financial transaction, people were a little apprehensive earlier. We have to hand-hold them and make sure that we are physically there and that they do not feel we suddenly increase their volume and disappear,” said Lodha.

Another feature that the firm has added to its platform is to help small and medium businesses with loans ranging from Rs50,000 to Rs5 lakh. It has already partnered with 10 NBFCs for the purpose.

“Merchants don’t have access to finance. Sometimes, they don’t have the kind of working capital. So, based on the transaction history on our account, we are able to give them pre-approved loans. We have tied up with multiple NBFCs for that and they are the ones who underwrite the loans, but the repayment of the loans happens only from our payment’s platform,” said Kothari.

The company currently employs 36 people. By next year, FTcash expects to take the total employee strength to around 500 while still focusing on the Mumbai market.

It has also set an ambitious target of bringing nearly 1 million merchants on board its platform in the next three years. It is also currently looking to partner with various government entities for some of the financial schemes that they offer.

“It (bringing 1 million merchants) is not a big task because we have about 60-90 million merchants in the Indian landscape. The idea is we want to enable electronic acceptance. It’s going to be driven by the fact that there’s a strong push for by the government on financial inclusions,” Kothari said.

Mint has a strategic partnership with Digital Empowerment Foundation, which hosts the Manthan and mBillionth awards.