Automating the EMI

Automating the EMI

Innoviti Embedded Solutions, a payment management technology company, is focused on serving retailers at the point of transaction, helping them automate processes and offer innovative payment systems

MADHUMITA PRABHAKAR

When has a zero made the most difference? Perhaps, when you’re at a cash counter and the billing representative adds one extra zero to your tally, while swiping your credit card. An experience such as this can frustrate consumers and in this age of competition amongst retailers, no brand wants to leave room for human error to bring it disrepute.

Addressing this concern is Bengaluru-based Innoviti Embedded Solutions (Innoviti). Founded by Rajeev Agrawal, in 2002, the company helps businesses improve operational efficiency, and in turn, enhances customer- experience at the point of transaction.  To put it in simpler words, to avoid a similar circumstance as mentioned above, Innoviti has developed a technology, where the software on the computer is linked to the swiping machine and the machine automatically swipes the card for the money that is indicated on the computer.

Piggybacking on the initial traction for its first product, uniPay (which connects the billing software to the credit card processing terminal automatically), the company now offers four products – namely, uniPay, quickEMI, pgEMI and fastCOLLECT – to retailers across the country. Today, the company’s big focus area is to facilitate EMIs on debit cards across categories. For example, if a retailer wants to offer an EMI option for an Apple iPhone, Innoviti will take care of all the systems and processes to make this happen for its client. For this, Innoviti’s technology platform will act as the link between a retailer’s payment systems and that of multiple banks (that have issued credit and debit cards to consumers) across India.

Agrawal indicates that there are two tickers to Innoviti’s business model with the first being movement of transactions from cash to card. Second, through operating on a percentage model, which means, with every transaction made at the POS, through its payment system, Innoviti receives a commission of 0.15 per cent to 0.20 per cent on the value of the transaction. In FY13, the company recorded a top line of Rs. 22 crore for all its products put together.

In the initial stage, since it was operating in a high-risk environment and its business model was still in an experimental phase, the company relied on angel investors for funds. In May 2006, once its business became stable, Titan Industries Ltd. acquired a five per cent stake in the company. “From the beginning, we drove our business in such a manner that we could conserve cash and drive profitability as quickly as possible. Even at a later stage, we were particular about looking at funding only through strategic investors or trust funds, who would understand our business model and provide small amounts of money with great freedom,” states Agrawal.

Today, Innoviti is 70 employees strong, with a presence across Bengaluru, Mumbai and New Delhi. Its clientele comprises companies such as The Mobile Store, Reliance Trends, Inox movies, Tanishq, Apple, Dell, Manipal Education and Meru cabs, to name a few.

The company plans to foray into the Middle East in the current financial year and enter other South East Asian markets in the next five years.

Upgrading to stay ahead

Since Innoviti operates on a model where its revenues are primarily driven by the number of and the value of transactions recorded at the Point of Sale (PoS), as its clients move from in-store to the e-commerce space, the company is well-prepared to tap the online potential too.

Moreover, keeping with the demands of managing the large tracts of data it collects on a daily basis, Innoviti constantly upgrades its database capabilities. “For instance, we have moved from public, open databases (like Open Source) to commercial databases (like MySQL), because we realised that beyond a point, the former model does not have the capability to provide the kind of business continuity that is required for large scale commercial businesses,” says Agrawal.

Since the company is dealing with sensitive data, it upgrades its security systems on a regular basis too. For instance, it has a file integrated checking software, which scans for any unusual activity in data entry or recording and immediately flags off a warning to the team.

Meeting differing expectations

The primary challenge that Agrawal sees in this business is understanding and managing the expectations of the retail and banking world. “The retail world is vibrant and brands want many different ways to differentiate their outlet from a competitor’s outlet. The banking world, on the other hand, for its own reasons, needs to be conservative, needs to be process oriented and secure. So, we are faced with the challenge of absorbing the vibrancy of the retail world and translating it into requirements and methods which are not new to a bank,” explains Agrawal.

The company tackles this challenge by constantly talking to the bankers and trying to understand their systems and processes better. “Instead of asking them to change, we will adjust and speak their language. In fact, a lot of the challenges can be addressed easily through experience and by being in the industry for a long time,” reasons Agrawal.

Since Innoviti primarily operates in the B2B space, it relies on the direct sales channel to market its services.  In fact, the company has gone one step further and has taken the initiative to educate its customers about how the payment industry works, in an attempt to bring more transparency into its processes and to gain customer loyalty.

Looking to the future

Going forward, Innoviti’s focus will be on partnering with banks and offering a technology platform for retailers to process EMI payments for debit card holders, at the point of sale. For instance, a bank will have enough information about its customer to asses if he or she is worth being given a small credit. Thus, when that customer swipes his debit card at the POS, he can pay in instalments. At the back-end, Innoviti will create a credit line link to the savings account and ensure that the purchase is funded automatically, on a monthly basis, through the credit line instead of through the savings account.

Apart from this, the company also plans to evolve from a closed source to an open source market, where it can develop payment systems for cash customers as well. Lastly, in the current financial year, Innoviti plans to foray into Middle-East and expand into other South East Asian countries in the next five years.

“The electronic payment system in India has been growing at 30 per cent annually, so, from a market potential perspective, we are in a high growth market. As the plastic money dependent consumer base keeps widening, the key to our success will lie in identifying more innovative payment models to drive this growth,” says Agrawal, on an ending note.


Snapshot

Innoviti Embedded Solutions

Founder: Rajeev Agrawal

Year: 2002

City: Bengaluru

Revenue: Rs. 22 crore in FY13


Concept in brief:

Innoviti Embedded Solutions was founded by Rajeev Agrawal, in 2002, to help businesses improve operational efficiency, and in turn, enhance customer-experience at the point of transaction. The company currently offers four products under its stable; UniPay, quickEMI, pgEMI and fastCOLLECT all focused on offering payments related services for retailers, by acting as the technology link between them and the banks.

In FY13, Innoviti recorded a top line of Rs. 22 crore. While, in the initial stage, the company relied on angel investors to raise funds, in 2006, Titan Industries Ltd. picked up a five per cent stake in the company. Today, Innoviti is 70 employees strong, with a presence across Bengaluru, Mumbai and New Delhi. Its clientele comprises companies such as The Mobile Store, Reliance Trends, Inox movies, Tanishq, Apple, Dell, Manipal Education and Meru cabs, to name a few. The company plans to foray into the Middle East in the current financial year and enter other South East Asian markets in the next five years. It also plans to evolve from a closed source to an open source market (to include cash customers, along with credit and debit card holders) and is in the process of developing an EMI payment system for debit card holders in India.

FOUNDER’S TAKE 

HOW INNOVITI GAINED PROFITABILITY BY CONSERVING CASH

From day one, we ensured that we had paying customers and sold our products at a healthy cost margin. There was no concept of discounting, to test the product viability. The advantage of this was that we were always making money. While it may not have been sufficient to take care of our operating expenses, we were very quickly able to decide whether the product was scalable or not. So, when you are forced to make money, you will realise when customers are not ready to pay and eventually know that your product is not right.