ftcash

India has 55+ million micro-merchants and small businesses but only 1.25 million swipe/POS machines. On a yearly basis these merchants transact $1600 billion dollars in transactions every year in India. Currently, these merchants have no alternatives to accepting cash. Most of these merchants cannot afford a POS machine due to the upfront cost and additional infrastructure requirement. Merchants with large transactions on a daily basis also struggle with rendering exact change, counterfeit notes and daily reconciliation being time-consuming. Lastly, with or without a POS machine, the customers have to meet the merchant to pay him in-person.

Nearly 98% of small & micro merchants have never received institutional finance and rely on the distributors or money lenders to finance them. In most cases, these micro-merchants are given loans at exorbitant rates by devious money lenders. These merchants are never catered by the banks and NBFCs as they do not have any credit history or collateral. In India, only 52.8 percent of individuals have a bank account and 22.1 percent have used a payments card. On the other hand, India is supposed to have 500 million Internet users by next year, with 314 million using the internet only through their smartphones. Therefore a combination of bank accounts and phones has the capability to provide cheaper and efficient access to payments and finance than the current approach of branches and ATMs.