How fintech startups are taking cashless economy to bottom of the pyramid

HYDERABAD: Whether it is creating a platform to provide loans, enabling electronic payments or creating digital cash, fintech startups are introducing merchants in the bottom of the pyramid to a cashless economy.

There are approximately 60 million micro merchants in the country, with less than 2% of them with a credit/debit card swipe machine, according to Vaibhav Lodha, co-founder of Paypal incubator-backed startup ftcash.

"The hardware is expensive and there’s a monthly rental cost associated with it. We came up with ftcash to enable these merchants with electronic payments,” he said. As long as the merchants have a basic mobile phone and a bank account, they could get on this platform free of cost and receive payments electronically, which would directly get deposited in their bank accounts.



Launched a year ago, ftcash has over 3,000 merchants on their platform from 50 cities ranging from Surat, Guwahati, to Vijayawada and Mysore.

Ftcash has also partnered with around 10 non-banking financial institutions (NBFCs) to serve as a platform to disburse working capital loans to the merchants.

"Some merchants find it difficult to deal with banks. They could get the loan and also repay it using ftcash," said Lodha.

Another startup that serves as a platform for loan disbursement is Delhi-based PaySe backed by Bombay Stock Exchange-listed banking and financial solutions company Nucleus Software Exports.


Over seven-months-old, PaySe is a technology built on the concept of cryptocurrency and has created a product the size of a debit card to make cashless transactions offline. They have partnered with the micro-finance institutions in Haryana and Rajasthan to provide a cashless system of loan disbursement and collection in those villages.

"The cost of carrying cash to and from villages in India was about Rs 22,500 crore last year," said Ashutosh Pande, executive vice-president of PaySe. "We are replacing the truck that carries cash from the bank’s treasury to the village." Next on their list are Madhya Pradesh and the north eastern states.

According to Tracxn, 76 financial technology startups in India have been funded in the past one year.