Last yet Fast Mover: The BharatPe Success Story & Business Model

An Overview of BharatPe App

BharatPe is a QR-based digital payment App used for making any financial transaction without paying any extra charges for the transaction.  It means BharatPe does not charge any transaction fee from either of the parties. BharatPe acts like a payment aggregator between two parties.

BharatPe is a fintech Company founded by Ashneer Grover, Bhavik Koladiya, and Shashvat Nakrani in 2018. Its headquarter is located in Bangalore.

BharatPe is the fourth largest QR-based online digital payment platform after Paytm,  Google Pay, and PhonePe in India in terms of users. It has more than 7.5 million active users of this app.   It is enabled for any financial payment from all similar Digital platforms.

Journey of BharatPe

BharatPe was launched in 2018 by a Bangalore Based fintech company. Before BharatPe App launched, many online payment companies were charging at least 1.5% transaction charges from either of the parties.  Since its inception, the company has let users use Apps absolutely free.

This strategy of the company played an important role in the exponential growth of its user. Among this app's users, the company provides financial loans to small and medium-sized merchants based on their financial transaction records.  

BharatPe Business Model : How BharatPe earns money?

The Fintech company does not charge any amount for any QR-based transaction. The company provides micro and macro loans to small and medium-sized entrepreneurs at a very low-interest rate. General Banks do not provide loans to small merchants. It is very easy for a big company to get a loan from Bank, but for a small and new entrepreneur, loans are rarely approved.

BharatPe fintech understood this problem and brought a solution for such merchants. BharatPe provides loans to SMEs from Rs. 20,000 to Rs. 7,00,000 for a 12 months period at the interest rate of 2% per month. The company has launched two kinds of cards for merchants - Xtraincome Card and Bharat Swipe Card. Xtraincome Card gives 1% cashback to merchants on each transaction.

Bharat Swipe Card is just like credit cards for small and medium sizes of merchants to solve their financial problems. The company provides Point of Sale(POS) to merchants to receive QR payments and card payments. However, the profit margin is very low in POS services.

BharatPe tracks the financial transactions of merchants by using various products like Xtraincome and Bharat Swipe Card. Based on the transaction, the company analysis the capacity of returning loans of merchants.  The company provides micro-loans to such merchants without much paperwork. It does not provide load using CIBIL Scores like banks.

The company collects interest on loans from merchants. The company launched BNPL products in October 2021. BNPL stands for Buy now, and Pay later. The company collected $321million from these products. 

Thus, Interest is the main source of Income for this company.

Does BharatPe Charges transaction charges to it's merchants ?

This is the best part of Baharatpe app that make it successful. Bharatpe doesn't charges any transactional charges or fees to it's customers, shopkeepers, merchants & traders. As stated earlies, the main source of their income is their data & highest load recovery rate.

Is BharatPe a profitable company?

The company revenue grew X20 in 2021 in comparison to the previous year, 2020.  As per ITR filed by the company, its expenses have also increased. It is hard to clearly say whether the company is currently doing profitable business. 

How does BharatPe make profits?

BharatPe provides loans on interest to SMEs and medium size Entrepreneurs. Besides, BharatPe provides various products like Point of Sale(POS) and BNPL to merchants. These are the main sources of income to make profits

How is BharatPe different from Phone-Pe & Paytm?

BharatPe provides loans to SMES whereas Phone-Pe and Paytm do not provide such loans to customers. BharatPe has collaborated with NBFC. Now, customers can invest in BharatPe and earn interest amounts up to 12%. They can also borrow funds up to Rs. 10,00,000. Phone-Pe and Paytm do not provide such loans and give investment options.

BharatPe Funding

 BharatPe has raised funding up to $700 million from many fund-raising drives.  At present, The company is not in profit due to various challenges and competition from its peer competitors like Paytm, Google Pay, Phone-Pe, etc. However, The company's revenues shot up X20 in 2021 in comparison to 2020. As the revenue grew, the company’s expenses have also grown on developing infrastructure and products.  BharatPe has done a collaboration with NBFC to fight against its competitors.

Conclusion

BharatPe since its inception in 2018, does not charge any fee on any Digital payments from either party. BharatPe App is completely free. The company revenue has grown X20 in 2021 in comparison to the year 2020. Just in four years, its subscribers have grown up to 10,00,000. It has 7,50,000 active users of the app. The company is launching new financial products for SMEs and steadily making progress.

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