Home / Industry / Vinod Khosla-backed Novopay launches mobile wallet

Bengaluru: Novopay Solutions Pvt. Ltd on Wednesday unveiled its consumer wallet, which allows payments at neighbourhood stores, remittances and withdrawals.

The Vinod Khosla Ventures-backed company has partnered with RBL Bank, Axis Bank, Bank of India and said it has a strategic partnership with the yet-to-be launched IDFC Bank.

Srikanth Nadhamuni, chairman at Novopay said the mobile app, currently available only for Android users, can be used to pay contacts through email, phone numbers and Twitter handles too.

When users send money to their friends who do not have wallets, a message is sent to the recipient telling them to download the Novopay app to get the money.

The Novopay wallet can also be loaded using credit or debit cards or with the existing bank account.

Payments and finance platforms in India have seen increased activity in recent times with big e-commerce players launching, partnering or acquiring payments platforms.

Jasper Infotech Pvt. Ltd owned e-commerce major Snapdeal has announced that it will launch a mobile wallet through FreeCharge, its recharge and utilities payments unit while Flipkart has acquired payments services firm, FX Mart Pvt. Ltd.

One97 Communications Ltd run Paytm received an in-principle payment bank licence last month. Paytm, with around 100 million wallets, is the market leader in digital payments in India.

This space presents a ‘WhatsApp moment’ for India in 2015, said Infosys Technologies Ltd co-founder Nandan Nilekani earlier.

“The wallet penetration globally is 8%, the cash usage in India is 95%. I don’t think it’s a winner takes all [market.] There’s a lot of room," Nadhamuni said and added that they do not view the existing companies as threats.

“For payments to spread from a small part of the population to every person, it has to be at every retail shop," said Silicon Valley veteran investor Vinod Khosla.

The company has over 12,000 retail points from where it already offers banking and money transfer services to walk-in customers since April 2014. Even feature phone users may avail of wallet services at these outlets with the help of one-time-password authentication.

Novopay is looking to reach 85,000 merchants by September 2015 and 1,20,000 by March 2016. The company aims to have around 3 million subscribers by the end of the current fiscal.

Sridhar Rao, chief executive officer of the company said its retail outlets were growing at close to 25%. It has presence in around 21 states currently.

Nadhamuni said Novopay does not charge for transactions and charges only when the wallet is being loaded or when cash is withdrawn.

Khosla said traditional banking could not be profitable with deposits as low as a few hundred rupees, but the combination of Aadhaar, apps and other digital technology will allow that to happen.

“Financial inclusion is a major goal. You can’t do financial inclusion for a billion people with 125,000 branches. But if you can grow so rapidly that you can go from 12,000 to a 1,20,000, then you can talk about, within a few years, achieving financial inclusion with millions of branches," said Khosla.

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