Blog

Offline payments fintech Mswipe has said that it has received in-principal approval from the Reserve Bank of India (RBI) for the payment aggregator licence. 

The digital payment platform, focused on merchants, is the latest player in the space to have received the approval after Razorpay, Pine Labs, Stripe, Innoviti, and 1Pay.

Payment aggregators (PA) are entities that facilitate e-commerce sites and merchants to accept various payment instruments from the customers for completion of their payment obligations, without the need for merchants to create a separate payment integration system of their own.  

In the process, PAs receive payments from customers, pool, and transfer them to the merchants after a time period. Notably, bank and non-bank PAs handle funds as part of their activities. However, banks provide PA services as part of their normal banking relationship and do not require a separate authorisation from the RBI. But non-bank PAs require authorisation from the RBI. 

About 185 fintech enterprises and startups had applied for licences last year, of which a majority were rejected by the RBI owing to tight scrutiny and prerequisites.

Entry into online payment

Mswipe, which offers point of sale (POS) devices to merchants for offline payments at present, is now looking to offer an online payment gateway, marking its entry into the online payment space. 

It would first take the service to its network of 700 enterprises followed by SMEs, Ketan Patel, CEO, Mswipe, told YS.  

“The idea is to become a one one-stop shop for them, have all modes of payments accepted, reconciliations, etc. We would then take it to the not-so-prominent or less focussed SMEs with a turnover of Rs 100 crore to Rs 200 crore,” the CEO said.

Next stop: PPI licence 

Following an NBFC and PA licence, Mswipe is looking to get a prepaid payment instruments (PPI) licence from the central bank in the next few weeks. 

The PPI licence permits companies to operate payments systems such as digital wallets, prepaid transit cards, and vouchers.

International expansion is also on the cards for Mswipe. It is looking at Southeast Asia, UAE, Sri Lanka, and Africa as its next big markets for retail POS.

Mswipe is backed by investors such as Falcon Edge, Equip Capital, B Capital Asia, Matrix Capital Partners, and DSG Partners. The company reported a revenue of Rs 241 crore in FY21; it is yet to report its earnings for the current financial year. It faces competition from Pine Labs, BharatPe, Ezetap, Paytm, and PhonePe in the offline payment space.

MCapital, the lending arm and fully owned subsidiary of Mswipe Technologies, plans to increase its merchant loan disbursals from Rs 70 crore in FY22 to Rs 200 crore in FY23.