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Exclusive: BharatPe enters PoS business with no charges for merchants

Merchant focused QR code-based payments firm BharatPe has entered the point of sale (PoS) business, said two sources aware of the development. The company now joins incumbents including Pine Labs, Mswipe, Innoviti, Jio and PhonePe and Paytm that have launched their PoS machines.

“The PoS machine will be called Bharat Swipe and won’t charge any fee from merchants. The PoS machines have already been deployed at about 1,000 merchants,” said one source on condition of anonymity. “Besides zero merchant discount rate or MDR, it won’t charge any sort of fee including rentals.”

BharatPe’s entry into the PoS market is quite similar to its core offering: QR code-based payments. Despite the strong presence of Paytm, the company has cornered a significant market share and has gone on to raise $140 million from marquee investors including Ribbit Capital, Insight Partners, Sequoia Capital and Steadview.

“BharatPe is mirroring the same strategy – not to charge anything from merchants in PoS business as it does with its QR code-based payments. By waiving off all kinds of fees, it will give a tough fight to existing players,” said the second source on condition of anonymity. 

The traditional PoS companies will have to face competition from two well-established players: Paytm and BharatPe. Paytm launched an all-in-one Android PoS device for merchants in February this year. At present, Paytm charges 0.5% and 2% MDR on debit and credit cards while 3% on Amex credit cards. It also has a monthly rental of Rs 900 for its PoS machines.

All major PoS companies have a similar fee structure. “This will create a stir in the PoS business as BharatPe Swipe charges nothing. It made charges for QR payments zero well before the government did. Now, they are trying to do the same with credit and debit cards,” said the first source.

It appears that the company will stick to its core monetisation strategy of lending in its new business of PoS, too. 

BharatPe has not responded to Entrackr’s request for comment. 

The launch of Bharat Swipe has come at a time when PoS business is going through upheaval due to the Covid-19 crisis. According to an ET Prime report, Mswipe had fired about 500 to 700 employees. The PoS business had suffered a lot due to the lockdown, however, it’s gradually coming back on the track from this month.

Till January this year, close to 4.94 million total PoS machines were deployed. The entry of Paytm and BharatPe has heightened competition for the incumbents. Going forward, it would be exciting to see how the two newcomers perform and the response of well-established players in the PoS business.

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