Mumbai :
Cashfree founders Reeju Datta and Akash Sinha were interacting with ecommerce players trying to digitise cash-on-delivery payments, when they stumbled upon a much bigger problem the companies were facing— bulk bank transfers.
That’s how Bengaluru based Cashfree moved from being a customer-facing digital payment solution provider to a technology platform that digitises both inward and outward bulk payments for merchants.
“We had started with the plan to solve the problem of payment through cards at the time of delivery as most of the ecommerce payments were cash-on-delivery. Then we discovered the major problem was around sending and receiving bank transfers for businesses,” said Reeju Datta, cofounder of Cashfree and an alumni of IIT-Kharagpur.
Explaining the process, Datta said a merchant has to make various recurring payments to its vendors, to delivery boys or even to its employees depending on the nature of his business. As per the current system for an outgoing payment, companies have to upload excel sheets with all the payment data on to the bank’s website and wait for the disbursement.
For a small company, tabulating such copious amount of data manually is very difficult and it ends up consuming a lot of time, delaying payments.
“This process was manual hence prone to human errors. There was no way to even check which specific transaction out of the bulk payment failed,” said Datta. “We have developed a solution to completely automate the process.”
According to Datta, a typical case could be a taxi aggregator who collects payments from the passengers digitally. As of now, the company makes once-a-week bulk payment to a driver to settle his dues. Now with Cashfree technology, such payments can be made almost every day.
“For the settlement process, we are integrated with both the settling agencies in India— National Payments Corporation and the Reserve Bank of India— through partner banks,” said Datta. “Depending on the amount to be settled, time of the day and other factors, we select the path that would ensure fastest settlement,” he said.
Cashfree currently works with Yes BankBSE -1.17 %, ICICI BankBSE -1.98 % and Axis BankBSE -0.86 % for the settlement part and has 1,100 merchants using its solutions. The platform is designed to work smoothly for freelancers trying to collect payments and even crowd-funding platforms who are trying to raise funds for emergencies.
Operational since September 2015, Cashfree ventured into the bulk payment business in January this year.
Having entered into an otherwise untapped market, Cashfree is growing at 100% per month and plans to reach Rs 200 crore worth of transactions by end of this year.
“In November, we are looking to clock around Rs 100 crore worth of transactions on our platform and are doing around Rs 50 crore of transactions this month,” said Datta.
With the potential market of a whopping 3 billion bulk payments every year and growing at a rate of 30% as per RBI figures, Cashfree hopes that with demonetisation and the onset of Goods and Services Tax, more small enterprises will adopt digital methods of payments opening more business opportunities for the startup.
source: http://www.economictimes.indiatimes.com / The Economic Times – ET Rise / ET Home> RISE> Money / by Pratik Bhakta, ET Bureau / October 20th, 2017