ftcash is a financial technology company which aims to empower micro-merchants and entrepreneurs with the power of electronic payments and loans with zero upfront cost and no monthly rentals. Merchants are able to offer their customers multiple payment methods including credit cards, debit cards, net banking, mobile wallets, PayPal and more.
ftcash was launched in mid-June 2015 by Sanjeev Chandak, Deepak Kothari and Vaibhav Lodha. Sanjeev, an alumnus of IIT Kharagpur and Wharton Business School was last working as Dy. CFO at Deutsche Bank in India. Deepak, a Chartered Accountant by profession, was working as a management consultant with KPMG and Vaibhav, a Harvard alumnus, was working as a Director with XPRIZE.
In an interaction with BWDisrupt Team, Vaibhav Lodha, Co-founder, Head-Alliances, ftcash, shares journey of his venture.
Excerpts:
1) How was this idea born?I'll tell you a story of a the missing middle in the country today. These are the guys who make our lives comfortable and yet are hidden in the plain sight. These are segments that do not have access to the financial system in the country.
Let's meet Pankaj, the milkman who delivers milk to your house every day like clockwork. He wakes up at 4:00 AM, cycles his way to the milk depot where he purchases his daily milk in CASH. He then cycles to the building where he drops milk on a routine everyday from 5 to 8 in the morning. Now, let's turn our eye to how Pankaj collects his money. Every weekend on Saturday and Sunday post his drop routine, Pankaj goes door to door to collect sums ranging from 1,000-3,000 in cash. The moment he rings the bell, his customers first reaction typically is "Bhaiyya baad main aana". What hits him harder is when he ends up collecting a fake note which the banks ends up being torn by the banks. Pankaj needs to now loan the money to pay the agencies in time for the milk. So he takes the long walk to the moneylender who charges him exorbitant interest rates.
Now enters ftcash, we work with this MISSING MIDDLE- newspaper men, milkmen, tuition teachers, kirana stores and all those genies that make our lives comfortable. ftcash enables them to receive payments electronically without having to walk to the doors of their customer. We also enable them to access institutional finance and not fall into the clutches of the devious money lenders.
2) What is your business model?ftcash earns a revenue on each payment transaction through its platform. Additionally, ftcash earns a revenue of 6-8% on earn loan disbursal to a micro-merchant.
3) What are the different features in your app?1. ftcash acts like a 'Virtual Swipe Machine', enabling receipt of payments by merchants only on feature phone and bank account. The customer can make a payment through App or Merchant Payment Page (without downloading the app, which works on 2G as well). Payment through Merchant Payment Page enable transactions through Whatsapp, SMS, Email etc.
2. ftcash has no monthly rentals and no upfront fees, which enable uninitiated merchants into digital transactions.
3. ftcash aggregates all payment options such as Credit/Debit Cards, Mobile Wallets, Netbanking, UPI and PayPal.
4. Based on the transaction history of the merchants, loans can be given to them with lower risk.
4) Enabling micro merchants and local vendors in accepting cashless payments- Tell us about your journey, the challenges and how did you overcome them? ftcash started operations in June 2015. In the initial days, the founding team had to meet every vendor individually and sit through many transactions to enable the trust in them about the money coming into their accounts tomorrow. Over a period of time, the trust of merchants started to develop and we expanded from Powai to entire Mumbai. In the early days, there was a correction in startup ecosystem and we had to come up with innovative ways for recruitment and training of our sales staff to ensure maximum impact.
5) From cash to cheques to credit cards to online banking and now mobile commerce. How has the technology changed and how are the customers adapting to it?In the early days, Credit Cards were only accepted by high-end hotels in Tier 1 cities through a large swipe machine which was practically a xerox machine. Over a period from cabled swipe machine to a sim based swipe machine, the technology has evolved. Yet, there has been a fixed cost (from 3000-15000) associated with each machine and a monthly rental (Rs. 200-500). Our virtual POS Machine removes the entry to barriers as all our merchants work primarily on at least a feature phone and a bank account. Unlike common perception, this has received with great enthusiasm, not just from customers but merchants as well, you are opening up to technology. While the proliferation of whatsapp and facebook has transcended from metros to cities and even villages we believe ftcash will be the enabler for them to accept electronic payments and access to institutional finance. We believe that it's time "The Missing Middle" comes of age and gets access to better health, education and nutrition through financial inclusion.
6) How is that you ensure the security of the customer data?RBI mandates all payments companies to PCI DSS certification before storing any credit or debit cards details. We have been certified PCI DSS since inception.
7) Client trust and satisfaction play a very premier role. How is that you address these concerns?We share the credentials of our company along with the letters from banks and certificates that deepen their trust in our company. We have also been very transparent with our customers and merchants about pricing and costs associated which ensures they are aware of all terms and conditions.
8) You have a CSR initiative associated with the brand. Please tell us more about it?The income gap between the rich and poor is widening. According to a recent estimate, less than 1 percent of the world’s population holds 41 percent of all wealth. Second, potent technological advances such as the widespread use of mobile phones and the drop in price point for such devices, indicate that the future of banking could revolve around cost-effective mobile applications. As most large corporates and banks compete to deliver financial services, ftcash captures a formally ignored market like the micro-merchants. ftcash creates a simpler way to access the payments into their bank accounts and make transactions in a faster, more convenient manner. With traditional mass-market saving accounts, banks have given very little consideration to consumer engagement with previously unbanked clients after they open an account. The effect is that roughly half of basic bank accounts lie dormant. ftcash enables that financial inclusion provides social and economic justice to these underserved communities. Improved cash flows, better cash management and purchasing ability provides a base of a just society. With enough data points, ftcash provides loans based on transaction history to these micro-merchants as well, which enable loans at a lower cost than the market
.
9) From all of the features, which is that one feature that sets you apart from your competitors?Our combination of payments and loans systems enables us to have a working relationship with our merchants. We are thus able to satisfy not only their needs of loans but also the needs of their customers to enable digital payments with no entry barriers. As the merchants are able to register in less than 5 minutes, with no transaction limit unlike wallets, it creates a true niche in the market for the product.
10) What is your advice to the budding entrepreneurs?
Hustle, Achieve, Repeat!
