PhiCommerce to focus on payments infra for smaller banks, says co-founder

The fintech firm expects software-as-a-service products to contribute 40 per cent of revenue over the next 18 months as smaller banks seek greater control over payments, said co-founder Rajesh Londhe

Fintech firm PhiCommerce is sharpening its focus on deploying its payments stack among small- and mid-sized banks as it expects technology services to account for a growing share of its revenue, said Rajesh Londhe, co-founder and head of payments.

 

The firm is betting on deploying two major components of its stack - acquiring and issuing stack - at a time when these banks look to own corporate relationships completely.

 

This effort is expected to expand revenue contribution from software-as-a-service (SaaS) products to 40 per cent over the next 18 months from the current share of 20 per cent. The rest of the topline comes from the company’s payment aggregation business.

 

“As far as SaaS play is concerned, we want to deploy acquiring and issuing together for banks and they can be their own boss in terms of controlling the transaction flow. We have a clear Chinese wall between our businesses of payment aggregation and SaaS and we recognise the fact that data is critical from a bank’s perspective,” Londhe said.

 

The company is licensed by the Reserve Bank of India (RBI) and has two payment aggregator licences: online and offline.

 

Issuing refers to the bank or fintech that provides a payment instrument such as a debit card, credit card, or prepaid card, while acquiring refers to the bank or payment provider that enables merchants to accept payments by processing transactions and settling funds into the merchant's account.

 

The firm expects to take on board two to three banks for its SaaS and payments infrastructure products by the end of the current financial year (FY2026-27).

 

Londhe explained that the firm was in discussion with four to five banks to deploy its solutions.

 

Smaller and mid-sized banks are increasingly looking to become direct acquirers because, under the traditional payment aggregator model, merchant transactions are often routed through larger acquiring banks, he said.  

 

This means merchant transaction volumes and payment flows become visible to those larger banks, creating a risk that they could eventually win over those merchants.

 

As a result, these banks now want to own the acquiring relationship themselves, giving them end-to-end control over their merchant franchise, payments infrastructure, and adjacent businesses such as lending.

 

“Smaller banks also think, why can’t they do this themselves. They can protect their merchant through a technology stack and have acquiring and issuing business, including credit and lending in a single place. The customer remains in full control,” Londhe explained.

 

Meanwhile, PhiCommerce will continue with its focus on payment aggregation for categories such as enterprise, government, education, and insurance. The firm has already expanded services to international markets such as Japan and Peru.