Digital payments catch momentum

Zaggle Prepaid Ocean Services Private Limited, a financial technologies company, founded in 2011 by Raj N, a serial entrepreneur and an active angel investor, the industry-agnostic B2B firm makes use of deep tech and artificial intelligence (AI) to offer platform solutions to firms for employee reimbursement, expense management, rewards and recognition. In an exclusive interaction, Zaggle's Founder and Chairman Raj N shares with Bizz Buzz his views on the digital payments scenario in India, and his company's growth plans.

How has been the transformation journey of Zaggle, from being a gift cards provider to a digital payments, cashbacks and analytics company?

Zaggle was born to fulfil the growing need for digital rewards. We first came up with employee benefits, which were earlier given to employees as paper coupons, and then we slowly expanded to employee reimbursements on the same platform for rewards for employees. With time, we ventured into expense management for entire businesses to take care of business expenses such as petty cash and utility bills. Today, we are a payments company working in the areas of financial tech, HR tech and bank tech.

The most amazing part of HR tech is that it deals with people and mapping AI to HR has been one of the most challenging tasks we had. HR tech space has been waiting to be disrupted and rise above the basic payroll, L&D, appraisals to a fundamentally altering level of making a difference to human resources. The only goal that kept us going was to automate every mundane task of financial management. We aimed at bridging the gap between banks and businesses to provide easy access to capital and ensure smooth running of the business. At present, we are working closely with over 10,000 merchants, more than 4,500 businesses and corporate entities and approximately 4.5 million users.

What are the trends that you see in the digital payments space? And, what is the role that Zaggle is expected to play?

As per a report by RedSeer Consulting, digital payments in India are expected to grow over three-fold to Rs 7,092 trillion by 2025 on account of government policies around financial inclusion and growing digitisation of merchants. The current 160 million unique mobile payment users will multiply by 5 times to reach nearly 800 million by 2025.

Digital payment trends are surging rapidly with giants entering this sector and offering cash backs and rewards to attract customers to use their platforms. Since the digital adoption will be the new mantra for most of the companies, we are looking at 100 per cent growth in business in the next 9 to 12 months. We have bagged more than 100 new contracts in the last six months and have been on a winning spree despite the economy being shaken up with the current Covid-19 situation.

How has Zaggle fared during the Covid-19 lockdown period and the factors that contributed to it?

The Covid-19 pandemic brought the economy to its knees. Fintech companies have always been working towards providing innovative and state-of-the-art technological support to SMEs, corporates and banks in lieu of the age-old conventional banking services. With digitisation being established as the new normal, more and more people turned towards virtual transactions. Since we are in the realm of digitisation, we witnessed rapid growth ever since the beginning of the lockdown. Once the lockdown was announced we had immediately set up the virtual card platform for the end-users. Zaggle has witnessed a growth of 600 per cent with more than 7 lakh individuals using virtual cards during the lockdown. We bagged many new clients even during the pandemic, which has resulted in a gross turnover of approximately Rs 7,000 crore.

At what stage is Zaggle's plan to enter the neo-banking space and any timeline for its foray?

At Zaggle, we are aggressively and relentlessly working towards launching our SME neo-banking platform. We want to create a platform for businesses to easily access financial services from different financial service providers. To avoid the hassle of different accounts, having cheques signed by authorities, going through RTGS, we thought this process should be automated through a platform to quickly flake in and move the funds to ensure that the cheque gets cleared without having to go through the process manually.

We will soon be launching our neo-banking platform named ZIKZUK, an SME neo-bank in the first week of April with 'Founders Card' as its first product. Founders Card will be a business credit card for founders with best-in-class credit line, founder-centric rewards and benefits and AI-generated business reports. Another product is the 'Business Finance Manager' (BFM), which is a financial operating system for SME owners to manage their cash flows and working capital, and make data-driven business decisions. This open banking platform will help corporates for all transactions where all of it will be self-automated and will give a performance, balance sheet in a single rack.

What are Zaggle's organic and inorganic growth plans?

There has been tremendous amount of organic expansion across categories like channel incentive programme, expense management, employee rewards and engagement and prepaid cards. Along with that inorganically we have acquired a couple of companies till now. We are still looking at companies, which have a very good product and have seen some traction, or companies that will help us in the distribution or the marketing side. We are also looking at companies which are based in the Middle East, the US and Canada and are complimentary to us for our inorganic acquisition. Overall, we are sure to acquire at least a couple of companies, if not more, between 2021 and 2022.

What is the vision and mission of Zaggle?

Our vision is to become a global digital bank, and mission is to build state-of-the-art financial solutions workflow and products, which would help automate and empower businesses to increase efficiency, accuracy, transparency and productivity and which would eventually help us to achieve the goal of becoming a useful global digital bank.

What is the top line and bottom-line of Zaggle currently and any projections for this year?

We have been growing exponentially and have been winning new client contracts in spite of the sales teams and clients working from home because companies have now realised how important it is to quickly digitise processes to save cost and be efficient.

We have doubled the turnover and revenues as compared to last year. The company had a gross turnover value (GTV) of Rs 1,800 crore in FY 2018-19. Currently, the GTV for 2020-21 is Rs 10,000 crore till January 31, 2021, and we hope to close the year with Rs 12,000 crore. The adoption rate for corporates and SMEs opting for our expense management solutions has also increased to 90 per cent as opposed to 60 per cent before the Covid-19 pandemic. We expect our net revenues to touch Rs 200 crore register PAT of Rs 20 crore in 2020-2021.