BharatPe, financial services provider has acquired multi brand loyalty platform, PAYBACK India to support its offline merchants initiate rewards and loyalty programmes for customers.
It is anticipated that the acquisition will lead American Express and ICICI Investment Strategic Fund which possesses 90 percent and 10 percent stake in the entity to depart. The multi brand loyalty platform, PAYBACK India will function independently even after the acquisition.
BharatPe has been in a tussle with PhonePe over the suffix ‘Pe’ since its establishment in 2018. However, this will mark BharatPe’s first acquisition. This deal is likely to be worth around $30 million, as per a source who informed to Mint. Along with this deal, BharatPe will mark its way to a consumer facing business. Earlier, the entity has been powering payments and facilitating credit and other financial services.
BharatPe is now set to launch ‘Buy Now Pay Later’ (BNPL) services on the PAYBACK platform. It will also offer digital credit to its customers. Through the BharatPe quick response (QR) code, PAYBACK India’s customers can redeem their loyalty points and BNPL services at offline stores.
The management of PAYBACK India will carry on to operate the platform and report to Gautam Kaushik, BharatPe’s group president. Before joining BharatPe in February, Gautam Kaushik was the managing director of PAYBACK India. As a part of the transaction BharatPe’s second group president, Suhail Sameer and general counsel Sumeet Singh will join PAYBACK India’s board along with Gautam Kaushik.
Ashneer Grover, chief executive officer and Co-founder of BharatPe informed Mint, “Through the loyalty points, PAYBACK India has established a strong currency with customers in the last 10 years. With the acquisition, we will power up the currency and make it redeemable at even offline stores, which wasn’t the case earlier. This makes PAYBACK India’s proposition more relevant.” He further added, “This acquisition also gives us access to a strong base customers that we can underwrite to provide credit. Lastly, PAYBACK India ecosystem will allow our merchant to even roll out loyalty programmes for their customers.”
Grover too explained that the customer will be able to use their credit line to pay offline through QR code. PAYBACK platform will also offer unified payments interface (UPI) payments, allowing customers to make digital transaction at stores, he added.
In the coming six months, BharatPe plans to support 500,000 merchants on its platforms to initiate loyalty programmes and work as redemption points for customers. It further desires to launch its BNPL offering to customers by the end of July.
As yet, PAYBACK India has registered more than 100 million users with an active monthly user base of around 8 million customers. It records an annual revenue run rate of $25 million. Grover claimed, “PAYBACK India continues to be profitable and a $25 million revenue run rate will also keep it self funded, which makes it more exciting proposition for us.”
In the past years, BharatPe has doubled down its focus on its credit operation and was lending upwards $20 million on monthly basis to offline merchants before the second wave of pandemic hit the country. BharatPe has disbursed nearly $225 million in credit so far and has witnessed an outstanding loan book of $100 million. The company aspires to conclude the ongoing financial year with around 10 million merchants. It also prefers to double its annual revenue run rate to $200 million by the end of this fiscal year.
The start-up also associated with Centrum Group to submit a joint expression of interest to the Reserve Bank of India, earlier this year to acquire the assets of the distressed Punjab and Maharashtra Cooperative Bank.
