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10 Years, $2 Bn Transactions, 75K+ Retail Outlets: ItzCash’s Attempt To Make India Financially PHYgital

10 Years, $2 Bn Transactions, 75K+ Retail Outlets: ItzCash’s Attempt To Make India Financially PHYgital

In the mid-2000s, Internet penetration had simply begun within the decrease sections of society and mobile adoption become increasing. But, when it came to payments or any type of economic transactions, there was coins and handiest coins. “In 2005-2006, ninety seven% changed into coins and simplest three% turned into virtual,” starts Naveen Surya, the co-founder of bills platform ItzCash. “This was in large part due to the fact credit score cards were the simplest option to pay, while debit cards have been not inside the image in any respect,” he adds.

In the sort of state of affairs, taking the step in the direction of an entirely cashless form of charge become ambitious and volatile. But that is precisely what the founders of Mumbai-primarily based payments solution company ItzCash did in 2005. “Ours is a technology of convergence – again in 2004/2005 we started out experiencing digital convergence – as trade became going virtual, our money became nevertheless in a bodily shape and subsequently the pressure toward ‘Payments Convergence’ with ItzCash,” says Bhavik Vasa, Chief Growth Officer at ItzCash, who joined the firm in 2011.

And this danger seems to have paid off with the company being backed through marquee traders which include Matrix Partners, Lightspeed Venture Partners and Intel Capital. Essel Group holds the largest percentage in the firm. To date, all four have poured in round $fifty one Mn in the organisation. To display even greater religion, Ashok Goel, a serial entrepreneur and Vice Chairman and Managing Director of Essel institution corporation – Essel Propack, is presently the Chairman at ItzCash.

The cleverness of the move is also glaring 10 years later, inside the ItzCash group of 450+, that's always developing at a CAGR of 60% for the final three years on all business metrics of volumes, revenues and margins. It also claims to be the largest non-financial institution PPI (pre-paid price instrument) inside the us of a to have crossed the $2 Bn mark on a card-base of a hundred and ten Mn.

This is their adventure – intrepid and exciting.

“We Were Always About Cashless”

ItzCash is an unusual moniker and specifically for a digital payments solution. Naveen says, “In a country in which Physical Cash is king we've got needed a virtual opportunity as seamless, depended on and handy – hence India’s Digital Cash, ItzCash.”

He maintains,

“It’s handiest nowadays that everybody talks approximately being virtual and cashless, however again then we were the best ones making this noise. With coins all round and credit card available most effective to a handful, we realised that it become a clear possibility to create a few kind of tool, or some type of gadget in which a consumer with physical cash can do virtual transaction. And we can also supply him the same comfort that a credit score card holder will get.”

Bhavik elaborates on their journey up to now. “If we split the whole 10-12 months-adventure from 2005 to 2016, then the primary five years are simply laying the muse, in which we created the infrastructure, and these closing five years, we enabled ourselves to boost up that increase and momentum that we created.”

This increase is visible thru the answers the business enterprise presents for the four verticals — customers, corporate, government, and campus. Along with the oldest ItzCash card launched in 2005, the enterprise presents several pre-paid playing cards consisting of brief payroll card, delivery and petro card, salary playing cards, and company disbursements amongst others. These prepaid cards may be used at any offline or online contact point in which 0.33-birthday party payments are common. The enterprise additionally has partnerships with Visa, RuPay, and MasterCard and banks which includes HDFC, IDBI and DCB.

The wide variety of retail touch points additionally known as ItzCash World retailers are reportedly seventy five,000+. With the average ticket size of transactions ranging between INR 1,2 hundred to INR 1,500; of its 110 Mn base, approximately 35 Mn are “very active.” But given that November 8, 2016, after the demonitisation pressure by the Modi authorities, the quantity escalated to forty five Mn, as claimed by means of the employer in an official announcement.

As Bhavik in addition explains, fundamentally, the very core a part of their DNA lies in growing a “PHYGital community.” This is the inner phrase that the ItzCash team uses, because of this, they only play by means of a bodily reach and digital functionality.

“Even these days, $2 Tn retail payments is carried out via physical cash and all digital transactions account handiest 10%, so, we've nonetheless handiest began with digital. And we agree with, you want a phygital manner, so there must be physical attain due to the fact I nevertheless need a touch factor to accumulate from you the bodily cash after which deliver it to you in the digital form – either as a top up in your card or on your pockets.”

Real Competition Has Always Been Physical Cash

ItzCash turned into a primary mover in many approaches – embracing digital and cashless, automating the procedure and believing inside the imaginative and prescient enough to paste to it. Being this primary mover gives one brought blessings however it comes with its share of challenges too.  According to Naveen, basically, there still lies a massive gap between cash and each digital product that exists inside the united states of america. As he says,

“Cash became the king and it remains a king. Even today, if you circulate in a big mall in Delhi and area INR forty nine,000 on counter to shop for an iPhone, no person will generally ask you some thing and you may get the cellphone. Try doing the same element with debit/credit score card or an e-wallet, they may need a photocopy of your card, your identification proof, and so forth.. So, if you see those are very small small differences however fundamentally we have continually been pronouncing that our real opposition has constantly been bodily coins.”

Secondly, there was no regulatory framework for this type of product. “The Payments and Settlements Systems Act got here someplace around 2011, and at that point we had been the simplest entity who're the most important business on this class. We needed to virtually paintings very intently with regulators, with the government, to give an explanation for to them precisely what we do, what type of risks exist inside the marketplace,” he states.


He further provides, “So, we installation an industry affiliation, the Payment Council of India, in which the atmosphere turned into to begin with cricket gamers, merchant aggregators and today, the atmosphere inside the association includes gamers from the online payments enterprise. We had to create a bridge among the industry and the government and the coverage makers, as a secondary undertaking.”

The 0.33 project turned into cognizance. “Since we have been the simplest player, we had to do our bit in pioneering efforts, right from DTH to utility to educate ticket to different services including even donations. We had been gambling our element to make humans comfortable with the entire concept,” says Naveen.

According to Naveen, the space among physical cash and digital nonetheless persists and there nonetheless lies an extended manner to create a at ease state with digit currency revel in.

“The landscape has modified. But simply the market has grown with greater alternatives being available within the shape of products such as e-wallets, debit/ credit playing cards, pay as you go cards, net-banking and greater. This is ideal for client and enterprise, but, there are issues which includes interoperability which nevertheless exist.”

Naveen explains this as – think you have got an e-wallet now, then you could pay to the merchant thru that pockets organisation simplest and now not via different means. “That’s why we've got introduced open loop Visa, MasterCard, and Rupay card so you, as a consumer, aren't locked all the way down to a confined number of offerings.  You can use them digitally, physically and, if required, can get get right of entry to back in your money thru ATM withdrawals. So, we are making efforts to reply to the converting surroundings and to create continue scale inside the enterprise while curating the business model with various things at exclusive times.”

Many Digital Payment Options – None That Cater To Middle And Last Sections Of India

The digital charge atmosphere in India has evolved to a stage wherein we have not one however many alternatives to carry out cashless transactions. This consist of credit score/debit playing cards, e-wallets inclusive of Paytm, MobiKwik, Oxigen, and many others., Unified Payment Interface (UPI), IMPS, USSD, RTGS, and NEFT.


When asked how ItzCash plans to strategise its actions in this seemingly crowded zone, Bhavik replies, “We assume that more and more players are best going to assist us make this transformation show up speedy. The pie may be very huge for everyone to make that alternate show up overnight. But, what we see within the virtual landscape, is that quite a few the gamers who're coming these days, are handiest standing on pinnacle of the pyramid of India, which is simply the pinnacle 5%.”

Bhavik similarly states that this 5% consists of folks that have already got virtual means – a financial institution account, get right of entry to to playing cards, and so forth., and all their cash is technically digital simplest. He similarly adds,

“If you operate your debit card to pinnacle up your wallet and then you definitely use that pockets to do on line transactions, then that pockets is simply gambling the position of a facilitator or a bypass-thru mechanism. You are not without a doubt including price inside the gadget. But the piece we really need to move after is the middle and final (section) of India. Although, humans there have financial institution accounts, but they don’t use their financial institution bills for real transactions. These are traders, shopkeepers, SMEs, who sincerely earn their cash additionally in bodily coins. ItzCash creates a bodily attain for the ones people to pay that bodily cash and then convert it to virtual. That’s in which we suppose we're adding a cost to the atmosphere rather than simply gambling the function of a skip thru.”

Naveen in addition provides right here that with ItzCash, it is making an attempt to create a marketplace out of doors of that five%, looking to make bigger to ten%-20%. “We don’t visit the human beings such as you and me and say that take one more pockets from us, however we actually have massive corporate solution schemes. We paintings carefully with corporates which include Amway, Dish TV, Flipkart, BookMyShow, IRCTC (Indian Railways), Satin MicroFinance and extra. We understand that big corporates need to disburse gifts, want to disburse cash as properly – and there we come in with the solution and an device to cater to their desires that is either payroll, or present or incentive. So we attain out to clients such as you and me who have a proper use case of company services and we attain out to the larger mass of India thru our retail outlets,” he adds.

“We Will Be The First Company To Be Fully Profitable This Year In Retail Payments”

This financial yr ItzCash is eyeing enterprise transactions worth $2.1 Bn (INR 15,000 Cr). With demonetisation in play, the agency has additionally delivered a new variety of playing cards with a wide style of use cases.

For example, when vacationers coming to India confronted trouble in getting their native currency exchanged, the employer dispersed pay as you go cards via two forex groups at the worldwide airports in Mumbai, Goa and Delhi. It expects to look approximately $14.6 Mn ( INR one hundred Cr) in phrases of virtual disbursement to these pay as you go cards on my own, for overseas travelers through the end of December 2016.

Itzcash-prepaid-cardItzCash additionally lately signed up with small and large-sized corporations to offer pre-loaded revenue playing cards for their personnel. The enterprise claims to have witnessed a sharp 3x soar in demand for its pay as you go cards inside the first 3 weeks of the release itself, specifically from small- and mid-sized employers throughout the enterprise. To date, the business enterprise claims to have signed up more than 100 large and small length agencies to provide pre-loaded income playing cards for their personnel.

As Naveen says,

“We are the handiest participant that not only has an omnichannel approach, but a multi-form component and multi-product portfolio because we agree with every consumer’s wants are different and distinctive methods are needed to satisfy them. Probably, we will be the first agency who might be absolutely profitable this 12 months inside the retail payments commercial enterprise. We had been one of the earliest startups within the united states. We additionally went through a Series A and Series B, in 2007, while only a few offers used to happen and handiest decided on gamers get recognized. Having long gone via that adventure, we also believe that we need to be turning the nook and have to be fully profitable, not best to grow as a large participant however also to prove that we've got cracked the version.”

“Our Core Strength Lies In Collaboration”

The ItzCash group believes that its middle strength lies fundamentally in running closely with its partners, be it banks, the NPCI, networks, or even merchants. “We are uncapping this next wave of purchaser for digital commerce so we will paintings and construct all of this with special partners. We are accelerating our penetration in India, through which in the subsequent 10 months we can pass approximately 1 Lakh retail outlets reach in India. We also are operating carefully with new startups which might be coming with more unique use cases, as an instance, fee control or education in college or campus answer.  While they may be fixing these problems with tech, we must enable them with the price platform that we've got and that we do higher,” says Bhavik.

Next, Naveen believes that the ultimate 10 years were the story of payment convergence, but the next decade will see monetary services convergence in India, where consumer could be within the centre.

Investments emerge as the third clear possibility wherein with one click at the pockets, a person can invest money into mutual budget for every week. “So what we're seeing is that because we've got created this remaining-mile attain to the purchaser, now whether that client desires to ebook, journey, stay, make investments, or extra, now you're slowly since economic offerings or finserv convergence is evolving, “ says Naveen.

He in addition adds,

“This is the massive possibility we foresee for the following decade, and that’s next year’s plan for us – to put the foundation, so that as the client gets geared up to devour all of those monetary offerings via one touch point, it will likely be us.”

Editor’s Note

In 2012, famend economist and former US Secretary of Labor Robert Reich said, “There can be a time whilst physical money is just going to end to exist.” Even earlier than that, in 2007, Guillermo de l.  A. Dehesa, a Spanish economist, stated ,

“Without coins, we'd stay in a far more secure, less violent international with more suitable social brotherly love, for the reason that major incentive fuelling all unlawful activity [i.E. Cash]… might disappear.”


The recent demonetisation pressure by PM Narendra Modi is simply a diffusion to this idea. As ItzCash discovered more than 28% hike in its energetic card user base, e-wallets consisting of Paytm saw over four hundred% upward push inside the typical site visitors, within some hours of the announcement. This become additionally the case with gamers like MobiKwik, FreeCharge, Oxigen, Ola Money and extra.

So, with the virtual fee surroundings ultimately coming into vicinity, and gamers like ItzCash, Paytm at the side of banks and regulatory government already gambling their element, the reputation of a ‘Cashless India’ seems to be manageable. The subsequent wave of innovation in payments can be with wearables gambling an energetic part in our each day lives. For example, as Chris Skinner, author of “The Future of Banking and Digital Bank,” proposed, a charge mechanism constructed into an eye fixed that character’s financial institution gave him. As he said,

“The watch includes an RFID or NFC capability, biometric popularity and is supported via current infrastructures on the service provider front-quit and cash transmissions manner lower back-stop. The retail patron can consequently pass into any keep, wave their watch on the contactless terminal, press their finger to the pay factor and they have bought the products. No card or coins concerned.”


A ahead-questioning enterprise along with ItzCash can in all likelihood envision how this ‘PHYgital’ phenomenon can take place inside the near destiny. And we can be looking right in conjunction with it.

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