Tap Smart Data Information Services, which runs fintech startup CityCash, has raised $1 million in a seed funding round from early stage venture capital fund Orios Venture Partners.
The firm said it will use the fresh capital to expand market access and merchant ecosystem, develop technology to provide digital ticketing solutions and deploy open loop National Common Mobility Cards (NCMC) on contactless payments solution SoftPOS, a statement said. NCMC is a government transport card, which can be used to pay for travel, toll, shopping and to withdraw money.
Mumbai-based CityCash last raised funds in December 2018, when it received an undisclosed amount of capital from Fino Payments promoter FinoPaytech.
The startup was founded in 2017 by Vineet Toshniwal, an FMS Delhi alumnus who has worked at CitiBank, Bank of America, Infosys and Equirus Capital. The company offers a multi-purpose near field communication (NFC)-based smart card that can be used to transact in offline mode in transit and retail, rendering a tap-n-pay experience for consumers.
The company works with card issuer banks, bus corporation partners and payment networks to establish the micropayments ecosystem.
Partnering with MSRTC, the state bus corporation of Maharashtra, CityCash said it has issued three million cards to consumers in nine months and is accepted in 20,000 buses.
“The current ticketing model is high touch and requires exchange of paper tickets, coins and currencies. The need of the hour for the bus corporations is to provide cashless, contactless and Covid-safe travel experience to the consumers by adapting technology at a rapid pace,” Toshniwal said.
RBI’s recent announcement of offline payments in retail will be a gamechanger, he said.
“Transit can play a pivotal role as it can drive very fast consumer acquisition and habit change from cash to tap-and-pay,” he added.
In the public bus transit domain, India records an annual payment value of $7.5 billion, split across approximately 15 billion tickets, according to the statement. Additionally, micro-retail economy around transit hubs, such as food and beverage spends by public bus users and last-mile shared auto rickshaw rides, add nearly $15 billion.
“India’s micropayments number over one trillion transactions in volume and $500 billion in value take place purely in cash, as none of the existing players have built a win-win model for consumers and merchants alike,” Anup Jain, managing partner at Orios Venture Partners, said.
“These small payments cannot be carried out online with dependency on network availability and high charges to merchants. UPI and card POS machines only operate in online mode, which is not suited for micropayments. These micro SMEs and consumers are also denied formal working capital or loans due to absence of data. CityCash is uniquely positioned to create a transit-led, offline tap-n-pay ecosystem on the lines of globally successful models of HK octopus and London Oyster. The founders bring a deep understanding of the micropayments market and NFC based technology on their card platform,” he added.