Transit-focused payments startup CityCash raises $1 million in seed funding2 min read . Updated: 11 Aug 2020, 06:54 PM IST
According to the company, this infusion of new funds will be used for expanding market access, building out the merchant acceptance ecosystem, development of its technology to deploy Open loop NCMC and digital ticketing solutions
Public-transit focussed payments firm CityCash has raised $1 million as a part of its seed round from early stage venture capital firm Orios Venture Partners.
According to the company, this infusion of new funds will be used for expanding market access, building out the merchant acceptance ecosystem, development of its technology to deploy Open loop National Common Mobility Cards (NCMC) and digital ticketing solutions.
National Common Mobility Card is an interoperable transit card project for Indian transportation ecosystem and was launched by the Indian government last year.
The three year old startup, CitiCash offers a multi-purpose near-field communication (NFC) -based smart-card that can be used to transact in an offline mode in transit and retail, through a ‘tap-n-pay’ experience for consumers.
At present, the startup is focussing on creating an offline tap-and-pay based payments ecosystem for low to middle income Indian consumers who use public transit and make small retail transactions. CityCash works closely with the card issuer banks, bus corporation partners and payment networks in order to establish the micropayment ecosystem.
“Current ticketing model is high touch and requires exchange of paper tickets, coins and currencies. The need of the hour for the bus corporations is to provide cashless, contactless and covid-safe travel experience to the consumers by adapting technology at a rapid pace. Transit can play a pivotal role as it can drive very fast consumer acquisition and habit change from Cash to Tap and Pay," said Vineet Toshniwal, founder, CityCash, who previously worked with CitiBank, Bank of America, Infosys and Equirus Capital.
Earlier, CityCash has raised funds from lending fintech company FinoPaytech, the promoter of Fino Payments Bank
At present, the startup has partnered with Maharashtra State Road Transport Corporation (MSRTC), and has issued 3 million cards to consumers. The startup’s solution is currently accepted in 20,000 buses.
“India’s micropayments cannot be carried out online, as they are dependent on network availability, with merchants facing high charges. UPI and card POS machines only operate in online mode, which is not suited for micropayments. These micro SMEs and consumers are also denied formal working capital or loans due to absence of data. CityCash is uniquely positioned to create a transit-led, offline tap-n-pay ecosystem," said Anup Jain, managing partner at Orios Venture Partners.
Currently, transit and micro retail transactions are a large opportunity even for large networks like VISA , Mastercard, which have been wanting to join the government's NCMC platform. However, small ticket sizes and high costs of online transactions, which is also passed on to merchants, as transaction fee, is a major source of friction for mass digitisation of this used case.