With $13M seed funding, NayaPay to roll out payment and messaging platform

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Pakistan-based fintech startup NayaPay has announced it has raised $13 million in one of South Asia’s largest fundraising rounds to roll out its payment and messaging platform, financial management tools and its products for small and medium-sized enterprises (SMEs).

The NayaPay round was led by Zayn Capital, global fund manager MSA Novo and Silicon Valley early-stage VC Graph Ventures. Other investors in the round include Singapore-based Saison Capital, Waleed Saigol’s Maple Leaf Capital and Empower Finance CEO Warren Hogarth also participated in the round, alongside a major investment from sponsors Lakson Group. – a Pakistani conglomerate with interests in media, telecommunications, manufacturing, financial services as well as a majority stake in Colgate-Palmolive Pakistan and McDonalds Pakistan.

An internal document shared by NayaPay confirmed that the amount raised in the round was $13 million.

One of only two e-money institutions to receive commercial launch approval from the State Bank, NayaPay is set to roll out chat-let wallets for consumers and merchants, as well as a SaaS (Software as a Service) based platform called NayaPay Arc that will enable merchants to accept card and online payments.

The article continues after this announcement

According to Danish Lakhani, CEO of NayaPay, the functionality of in-app messaging options will reduce the learning curve and increase adoption. The feature will also give context to payments, as all communication regarding payments would be on a single app.

On the other hand, an “omnichannel” platform will allow merchants to accept payments through POS as well as other online modes such as IBFTs, giving merchants more choices for payment acceptance. , increasing their sales and possibly increasing the network effect for NayaPay. In addition to universal payment acceptance, the SaaS (Software as a Service) platform called “NayaPay Arc” will also offer universal payment acceptance and financial management tools for SMEs.

“One of the key findings from our research was that digital payments are not picking up because merchants want all the options to accept payments,” Danish Lakhani said. “NayaPay Arc will give them universal payment acceptance and a range of business financial management tools to empower them, give business owners visibility into their cash flow, pay suppliers and increase sales and eventually help them become part of the formal financial system.”

With the versatile SaaS platform and email-enabled wallet, NayaPay plans to quickly add users by leveraging network effects. Fintech startup aims to reach five million NayaPay users in five years

The opportunity for NayaPay and similar wallets is huge due to a large unbanked population. It is estimated that 50 million adults are without a bank account and only 33% of women are banked.

Although it is a cash economy, e-money adoption rates are quite rapid. According to data from the State Bank of Pakistan (SBP), between the third quarter of 2016 and the fourth quarter of 2020, internet payments grew at an annualized average of 70.1% per year.

While these payments currently account for around 1.7% of all transactions in Pakistan, the inclination towards digital payments is growing.

But while NayaPay will compete with other wallets like SadaPay and TAG, it will also compete on the POS acquisition side with some highly funded fintech companies like OPay. Nigerian fintech OPay raised $400 million last year in a round led by SoftBank, which valued the company at $2.2 billion.

On how NayaPay plans to compete on the point-of-sale side, the Danish said its aim would be to integrate small and medium-sized businesses quickly, while its competitor, OPay, mainly focuses on the high end of the market. .

“Our strategy would be to quickly onboard merchants and quickly give them acceptance platforms. Brazilian fintech StoneCo, for example, has same-day delivery from point of sale. That’s the kind of strategy we would run also and that we would compete. In the long run, we would compete on the two-sided platform strategy,” he said.

NayaPay plans to deploy 150,000 POS machines at merchant outlets over a five-year period.

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