With its instant payment solution, Cashfree will tap e-commerce players

Payments start-up Cashfree plans to tap e-commerce players and large enterprises with its payment gateway, payout, auto-collect and marketplace settlement solutions.

It is an almost instant market settlement solution, between the seller on an e-commerce platform and the end customer. This will be highlighted as the USP.

The Bengaluru-based company has started working with Zomato and talks have been initiated with Shopclues and Bigbasket. Cashfree’s existing clientele include Nykaa, Rentmojo, Clubfactory and Milaap.

According to Akash Sinha, Founder and CEO, the company has identified a “big gap” in the market when it comes to fast settlement.

Typically, for an e-commerce player, majority – or around 50-60 per cent – of its orders continues to be in cash-on-delivery (COD) mode. Approximately, 15 per cent of these are cancelled. Settlement of such cancelled orders between the e-tailer and the company is difficult. This is where Cashfree with its “instant settlement” process comes into play.

Similarly, the company’s “buy-now, pay-later” facility – or simply speaking a micro-credit offered to both the seller (on a e-tailing site) and the end customer – allows a deferred purchase with credit being extended for a very short time (say 15 days). This service is picking up too.

“In most cases, settlement of a cancelled COD or online transactions takes time. But, through our gateway, the settlements happen within half-an-hour, at the maximum. A lot of integration with banks, UPI and our tech-platform were done to ensure this. With e-commerce gaining traction, we will continue to focus on these online players and large enterprises with our offerings,” he told BusinessLine .

Cashfree earns through the processing fee that it charges the merchant (seller). The fee varies between 0.25 per cent and 3 per cent, depending on the service offered and size of transactions. The company is eyeing a gross transaction value of ₹2,500 crore a month by this fiscal-end.

Sinha says Cashfree is eyeing a product expansion that includes subscription billing options – like auto debit from a credit or debit card; or even a direct debit from the customers’ account. Some of these solutions are in test-phase.

Other product expansion avenues could also be explored. It now looking at a fund infusion of around $4-5 million to increase offerings, ramp up sales team, hire talent and also add partnerships.

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