From a career banker to start-ups, how would you narrate your journey?
When I joined Mswipe two years ago, our goal was to turn around losses and, now we are EBIDTA-positive for the last seven months. From being a one trick pony, doing only payments and that too offline, we’ve changed the game. Now, we have 4-5 pillars working for us. First being payments, which will always be the top of the funnel the engine. We will continue to do merchant acquiring, but with a twist. We want to be a 360 degree player. We started only with a terminal. Now, we have a QR and payment soundbox.
M Swipe is the only company now which PAs, PPIs and NBFCs licence. This is my second pillar, where we lend to our merchants. We’ve been profitable in that business. Third is collections as a service, and we are present in 650-plus cities. Since we were collecting for ourselves, we offer the services to other NBFCs and banks. We have eight NBFCs, five banks and three LCs for whom we collect. We have decided to focus only on 180 days-plus outstanding. All my guys have cleared the DRA (debt recovery agent) exams. Everything is on recorded lines. Skip tracing is built in house. At present, it’s a breakeven business and can lead us in the path to become a retail ARC. That’s the vision with which we set up this business.
Aren’t you doing a lot already?
Collections is the only business that we are trying to do beyond our comfort zone. For the loans that we were doing, we didn’t want give it [collections] to a third party. Through collections we want to learn what not to do, and we are learning from somebody else’s mistakes and making money out of it. Today, our loan book is small. But if we reach a $500-million book, we will not be able to correct our mistakes which we can now.
Why ARC?
That’s the exciting space. Our current cost of acquisition is around ₹1,000 per merchant. In a retail ARC we will be able to acquire a merchant at ₹150-200. The problem with ARCs is that geographically they are not well connected. Whereas with us, if we know that a borrower who has taken a loan in Mumbai is now in Tamil Nadu, we have teams to recover it.
What’s your end goal?
We are a holistic payment player, which has the entire stack in house. From merchant acquiring to risk management to switch, everything is owned by us. In the last five years, we have not lost a single chargeback. We’ve started licensing these stacks to other players. We have a BNPL platform, which we’ve licensed to two large players. We are offering the switch to banks. This is to sweat the asset. And fifth, we are now going international. In the next 40 days, we should be operational in the UAE. We are just taking the stack and offering it in the JV with a telecom giant in the UAE. We want to do something similar in Indonesia. Singapore is a small market where we will put our people. These three markets will be operational in the FY24.
What about capital raise?
The board and management has been clear that we want a path to profitability. We’ve done that. Our bottomline is feeding us well, and we don’t need capital now. Lending is the only place where we may need capital and may be in the next six to 12 months we’ll do a fund-raise. At some point, we want to list ourselves. That’s when we look at whether we should bring in new investors.