Apart from focusing on its QR-code solutions, Gurugram-based BharatPe is also diversifying into the prepaid card segment and has been helping merchants issue close-loop loyalty cards, equipped with QRs to its customers.
Being piloted in Delhi, Bengaluru and Hyderabad, customers get an extra 4% of value against currency loaded on these cards, every time they make a recharge, said Ashneer Grover, co-founder and CEO, BharatPe.
The extra currency value is borne by the merchants.
“We have been piloting this solution over the last one and a half months, across 100 retailers and are monthly adding ₹1 crore in recharges on these cards. The solution was to create a loyalty solution for merchants, which will help customers to keep coming back," said Grover.
Along with this, BharatPe has launched its own PoS offering, BharatSwipe, which will allow merchants to accept card payments.
“We looked hard at the business model, and thought of how we can create value for merchants without losing any money. Further, we realised that merchants were keen to have a card PoS machine at outlets, if the bank never charged a transaction fee," he added.
As part of the new model, BharatPe will charge merchants an upfront security deposit for the cost of the machines, which will be refunded on return. For absorbing the cost of merchant discount rate (or transaction fee), merchants will have to forgo instant settlements of payments (made on through the card machine) for 15 days, post which they can cash out the settlement due to them, directly into their registered bank accounts.
BharatPe plans to monetise this offering by making interest on (15-day) deposits, which is due to the merchant. Additionally, in an emergency, merchant partners can withdraw the settlement due to them within 15 days of the transaction, by paying 1% withdrawal fee.
“We have already started piloting this in Delhi and Bangalore and are seeing ₹25 lakhs being transacted everyday on the BharatSwipe solution. At present, we have deployed 400 machines and plan to scale this up to 10,000 machines by November, this year," added Grover.
By the July-end, BharatPe is also looking to launch an instant credit line product for merchants, allocating up till ₹5 lakh in credit, at an interest rate of 0.1% per day.
“We want to acquire merchants efficiently and our business model is to sell multiple products to these merchants to make revenues, without incrementally increasing the cost of acquisition," said Grover.
BharatPe, within two years, has emerged as one of the top UPI payment processors in the country, a space which has the likes of well-funded firms including Walmart-backed PhonePe, Paytm as well as Google and Facebook-owned WhatsApp, competing for market share.
BharatPe is one of the several new-age lending startups whose applications for non-banking finance (NBFC) license was returned by the central bank, due to its stance on ownership. It was also experimenting with new age lending products including P2P merchant financing, which it had to curb due to the imbalances in the lending economy, due to the impact of covid-19.
At present, BharatPe has close to 4 million merchants and an outstanding loan book of ₹95 crores. By the end of this fiscal year, it looks to take its merchant base to 6 million merchants and have a loan book worth ₹300 crores.
The company also works with six NBFC partners at present and is looking to scale this up to 20 lending partners, as it looks to add new channel financing products to its offering to merchants, this year.