In India, the use-cases of a merchant point-of-sale (PoS) terminals have largely been limited to card payments and invoice generation. But with the advent of multiple services such as Zomato, Dineout, Swiggy, Grofers, Practo, Uber Eats and Dunzo, the requirement of merchants have also expanded from billing to store automation, managing supply chain, and partner management.
Of course, technology has allowed startups to solve these needs with digital tools. And to address the growing need for automation at the merchant’s desk, fintech startup Mswipe has introduced an app storefront for PoS applications called the Money Store. The Mswipe Money Store is an added functionality on the company’s smart PoS terminals, offering over 100 merchants-focussed productivity applications. By the end of 2019, Mswipe plans to increase the number of apps to over 200, so that merchants can manage their business processes through these apps without needing to rely on multiple solutions and their disparate distribution.
The digital business apps are curated by the Mswipe team in collaboration with developers such as GoFrugal, Logic ERP, ePaisa, Logosoft, Adaequare, Retailware, Intuition, Clinicia, nGO along with some apps created by independent developers too.
“While merchants get one-click access to all the productivity app, these developers will get access to the 500K merchant base of Mswipe along with a standardised hardware specifications for the app, without having to worry whether the merchant’s personal devices will be compatible to their app,” Manish Patel, founder and CEO of Mswipe, told Inc42.
According to Mswipe, discoverability is a big challenge for a host of Indian developers and with Money Store they get access to lakhs of SMEs in over 1000 cities and towns across the country. Access to the Money Store will be especially rewarding for developers who are new and have relatively sparse market exposure compared to big corporations or companies, the company added.
Further, Patel said that the biggest utility lies in the fact that it opens up a plethora of applications to the merchant, which are built for different business models and use-cases ranging from solutions dedicated for pharmacies, garment shops, general retail, ice cream sellers, salons and more.
Currently, the Mswipe team is accepting applications across 12-13 categories including general retail, garments, spa and salons, pharmacies, and more. In addition to the app category and its utility, Mswipe also takes into account the pricing before selecting apps for onboarding.
The average cost of the apps on Mswipe platform for businesses is said to be around INR 300 per month. Patel added that there is a shift in the go-to-market strategy for application developers, who are also increasingly option for one-time license fees anywhere between INR 400 to INR 20K, instead of subscriptions.
The earnings on the app are currently transferred to the app developers, Mswipe does not take any commission from either the app developers or merchants. Commenting on this, Patel said, “The way I look at it, we are already investing with the terminal for which the merchant is paying us and the terminal, if it has the capability that can do more for the merchants than just simply accept payments, we’re happy to increase the utility of the investment made by the merchants.”
Founded in 2011 by Patel, Mswipe is a mobile POS network provider, which allows merchants to undertake plastic card payments through smartphones or ordinary feature phones. The Company has raised over $80 Mn in multiple funding rounds from marquee investors such as B Capital, UC-RNT, Falcon Edge Capital, Epiq Capital, Matrix Capital Partners and DSG Partners.
Post demonetisation in 2016, the market of POS terminals witnessed a surge as the cash crunch led by the ban on currency notes of INR 500 and INR 1,000. The demonetisation resulted in increasing adoption of several digital modes of payment such as debit and credit cards, along with digital payments.
India’s POS terminal market is estimated to reach $450 Mn at a CAGR of over 10% from 2017 to 2024. According to DataLabs by Inc42, till 2018, a total funding of $406 Mn had been raised by Indian digital POS terminal startups. Some of the notable POS terminal providers here are Ezetap, Mswipe, Pine Labs, Innoviti, Mosambee, PhonePe, Payswiff (earlier known as Paynear), among others.
Earlier this year, Mukesh Ambani-led Reliance Industries Limited also entered the merchant PoS terminals space on a pilot basis. It was also reported that the company was partnering with FMCG brand Hindustan Unilever for onboarding merchants. Reliance’s foray in PoS space is expected to raise the numbers of digitised kirana stores from the current 15K to over 5 Mn stores by 2023. And it ties into the company’s ecommerce business which would adopt a hybrid sales model.
But it’s not just the market opportunity that has spurred digital payments. The Indian government was reported to be planning subsidies for fintech and non-bank companies for rural PoS deployment. This financial year, the government has planned to deploy 8.5 Mn PoS terminals across rural areas and the northeastern states to achieve its target of 40 Bn digital transactions in the country.