How Bharatpe’s Merchant-Focused Business Strategy Is Reaping Rewards

How Bharatpe’s Merchant-Focused Business Strategy Is Reaping Rewards

30 August 2022

India is a country where e-wallets are either consumer-centric or focus on both the merchant and consumer. Moreover, during and after the pandemic, small shops and establishments were hit the hardest as they mostly dealt in cash, and consumers switched to digital payment methods to avoid the risk of infection. 

This left local shop owners like the grocery stores high and dry. They were stuck in a catch-twenty-two situation as their day-to-day business mostly happened via cash-based transactions. So, the only option was to offer credit to their customers in a bid to retain them. However, it meant that they had to wait till the customers paid up while investing more money to keep the inventory full.

It is where Bharat pay merchant-focused services came to the rescue. The service operates across 11 states and services more than 5000 retail outlets using distributors and business partners to give local business owners end-to-end managed POS solutions along with other payment and credit services. 

It has become a game-changer offering small-time retailers the option to switch over to digital payment modes and start accepting QR code payment from their customers. It has helped maintain the inflow of money into business steady.

How It All Started? 

Bharat Pay first launched its merchant-focused QR code back in June 2018, at Nehru Place, which is one of the biggest commercials hubs in New Delhi. It turned out to be a huge success with close to 1,000 merchants signing up on the platform within one month of its launch. Two reasons were responsible for this overwhelming response: Interoperability, and zero transaction fees. While Pos devices offered by credit card companies charged a transaction fee, BharatPe’s QR code payment system did not. It left more margins for shopkeepers, and therefore, made the system more lucrative from a business perspective. Moreover, all transactions were credited to the respective business accounts the same day, which was not the case earlier.

Taking the Market by Storm

Small business owners often do business on credit. It leads to situations where they cannot recover their dues in full. So, while they needed to replenish stocks and ensure that every aspect of the business was operating as expected, it was important to address that deficit. 

How does a business do that? By taking out a loan. BharatPe realized this glaring gap as it was not easy for small businesses to take out a loan. It is one area Bharatpe focused on and which turned it into one of India’s most respectable and successful startups.

They developed an AI-based algorithm to get insights into a business owner’s cash flow, a merchant’s loan history, and credit score before making a loan offer. For the first time, small shopkeepers and business owners had access to collateral-free loans that required no physical paperwork and were credited within a few days. 

It allowed business owners to ensure a steady inflow of cash into the system to address the immediate requirements of the business. While institutional loans were cumbersome for small businesses, BharatPe’s platform was offering loans between ₹20,000 to ₹7,00,000 lakh at just 2% interest rates with repayment tenures of up to 12 months.

The Success Story

The merchant-focused business strategy of Bharat Pay merchant was completely different than what everyone else was doing. While the rest of the market was being flooded with applications offering consumer loans, BharatPe was strictly focused on helping small business owners make the best of their business. It was at a time when the pandemic was raging on and lenders were aversive to lending money to small business owners due to the risk of default. 

But BharatPe’s algorithm had hit the mark. At one time they were lending close to ₹300 crores each month, allowing them to foray into other product offerings such as gold and auto loans focused on business owners.

BharatPe’s success model is unique. They focused on an area that had remained ignored till they figured out what the ground realities were and what they could do to step in to address those issues. The bets had finally paid off and led to BharatPe becoming one of the leading platforms in the country, and gaining widespread recognition among business owners.

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