Sign up & pay later: Pune Startup forearmed its users against a cash famine

Demonetization has left all of India gasping. But some 200 households in the residential societies along the Baner-Pashan link road in Pune, near Mumbai, have been spared the pain of the sudden cash famine in India.

For them, solution was already in the making. They signed up back in June for a pilot project with Paylatr, a fintech startup enabling recurring offline grocery payments at neighborhood stores without cash or cards.

Here’s how it works: 

Paylatr extends a monthly credit of INR 5,000-8,000 to those who sign up with it. When they go shopping in neighborhood stores that are also on Paylatr, the customers literally pay later for the things they buy.

The merchant’s invoice goes to Paylatr and it sends a mail to the customer for confirmation. On confirmation, Paylatr releases the payment to the merchant. 

CEO and co-founder Rohit Bhatia likens Paylatr to Kenya’s Mpesa which started by digitizing money transfer to family members in villages, which was one of the most common transactions that happened periodically. “Paylatr is digitizing transactions between users and kirana stores (India’s version of mom-and-pop stores) which happens multiple times a month; so we’re going after a fundamental need.”

The milkman growth hack

After a successful pilot in the Baner-Pashan area, Paylatr is expanding to Koregaon Park in Pune, famous for its Osho ashram.

Now, he has found another mode to reach users: the neighborhood milkman.

Paylatr has no transaction fee for consumers. It charges merchants a 2 percent fee, which they’re happy to pay because of the ease of payments as well as for enabling customers to go cashless. The milkman pays no fee, however, in exchange for evangelizing Paylatr.

There is a Paylater in Lagos, Nigeria, and a PayItLater in Sydney, Australia, which provide short-term loans and credit.

This is an excerpt from Tech in Asia. You can read the full article here