MSMEs have been the backbone of the economy, especially during the pandemic, and now, fintechs are leveraging technology to help transform your local kirana store into a mini bank. Mswipe through their technology stack, hopes to empower their strong merchant network and become a one-stop shop for all their needs, says Ketan Patel, CEO, Mswipe Technologies. In a chat with CXOToday, he shares his thoughts on the future of digital payments, and how their technology solutions are helping their merchant network with payment acceptance.
- How has there been a transition in the MSME sector with digitization?
Digital payments, today have expediated from beyond the urban sphere. With affordable smart phones, cheaper data packs, better internet connectivity and the rise of ecommerce, going digital has become the norm. To stay relevant as consumers go increasingly cashless, MSMEs too have adopted digital infrastructure like POS machines and micro-ATMs for card acceptance. With the advent of UPI, QR codes and sound boxes received a boost, with fintechs working to provide low-cost agile products for merchants. As demand rises, challenges of supply and inventory management have risen. Even as consumers go increasingly digital, most of the MSME network is still wary about using these products and need a one-stop shop to facilitate this transition. Fintechs must work in collaboration to provide payment solutions to small enterprises, so that financial inclusion can reach the last mile.
- How has technology helped you in acquiring merchants?
The financial sector rides on a lot of trust, and through our myriad of financial services, we aim to make the merchant’s life easier in every way. With the POS devices, merchants can manage their business and make revenue through various value-added services like micro-ATMs, insurance allowing them to earn additional income through their terminals. Smart devices have an app called Money Store that gives them access to various business management tools like inventory management, bar code scanning, creating an e-commerce platform etc. Mswipe has the deepest integrated payment stack that enables flexibility to on-board merchants for QR or POS, provide complete digital underwriting, disbursement, and collections as well as integrated lending products. Being a one-stop-shop, Mswipe provides the entire suite of services that a merchant would need with an exceptional and dedicated service team.
- What is the problem Mswipe is hoping to resolve with their slew of services?
MSMEs form 40% of the Indian workforce, and with ecommerce expanding, it poses a risk to their existence. Mswipe, through their services and technology stack is helping them evolve and also bringing digital payments to the financially underserved. Mswipe’s services like Pay by Link, Dynamic QR, Shop and Travel Insurance, ‘meraonlinestore’ app, which allows merchants to go from offline to online in minutes are empowering merchants to go digital and be on par with their competitors.
- What are the challenges you have faced as an organization?
Mswipe has been one of the pioneers in the end-to-end digital payments acceptance space. Sourcing the right products and technology to be able to offer a secure platform for merchants to accept payments was one of our ice-breaking points. The payments business comes with a lot of responsibility so it involved a huge amount of effort in getting licenses, certificates and approvals. Covid 19 has definitively created a splurge in demand for digital payments. However, it also impacted merchants’ revenue so to help merchants meet working capital needs we introduced business loans with Mcapital. It is thus our belief that challenges lead to the discovery of creating innovative solutions. We believe that discovery lies within adversary, and thus, we constantly try to evolve to serve as a digital bank for merchants and make sure our merchant network grows with us.
- Have you made any recent partnerships to build your technological innovation?
We have recently partnered with activ.ai which is the category creator in the Enterprise SaaS with embedded B2B BNPL and insurance space. Mswipe will use actyv.ai’s technology stack to enable its B2B merchant community to digital business operations and score for various business opportunities via the platform’s embedded services, which include B2B BNPL and insurance. As part of the platform, actyv.ai will provide Mcapital with a multidimensional score that includes both financial and nonfinancial data to improve credit underwriting.
- What future trends to you envision in the digital payments space?
The next wave of growth is likely to come from Tier 3-6 locations, as evidenced in the past two years wherein Tier 3-6 cities have contributed to nearly 60-70% of new mobile payment customers. MSMEs have played a critical role in bringing digital payments to the bottom of the pyramid through their user-friendly transaction interfaces and innovative offerings; furthermore, supported by an open API ecosystem and. QR payments are accepted by more than 30 million merchants, a 12x increase from just 2.5 million merchants accepting QR payments five years ago.
2022 has been a defining year for the fintech and digital payments industry. Furthermore, with the advent of UPI on credit, democratising lending will get easier, and MSMEs can serve as integral mediums for them. Despite the fears around a ‘funding winter’, there is capital for fintech expansion because so much of the market is still untapped – so companies with a solid value proposition will always get money. With ONDC gaining momentum, digitization of small merchants will increase as well, democratize digital commerce with standardized operations and logistical efficiencies. The Buy Now, Pay Later trend is expected to grow at 35-40% over the next 5 years led by rapid growth in consumerism and online spending
- What is your reach in terms of number of merchants/POS machines/cities?
The company is fast expanding to become a digital bank for merchants by providing end-to-end solutions such as digitising services, lending and insurance, and supporting them in making extra income. With 5 lakh terminals on the ground and half a million merchants, we have about 10% market share in the POS category, and are present in over 800 cities Mswipe intends to be active in other countries, including Singapore, Indonesia, Tanzania, and the United Arab Emirates, over the next eight months.
