Razorpay ventures offline and acquires Ezetap, a PoS player

As competition in the offline payments market heats up, business-to-business (B2B) digital payments and neobanking platform Razorpay has expanded into the offline market by purchasing Bengaluru-based point-of-sale (POS) machine manufacturer Ezetap.

According to the business's regulatory filings with Singapore's corporate affairs ministry, Razorpay acquired an 80 percent ownership in Ezetap Solutions Pte Ltd, the parent company of Ezetap Solutions Pvt Ltd.

Entrackr obtained the file on August 16; according to the news source, the fintech giant paid $100–120 million for the share, which will put it up against Pine Labs, MSwipe, BharatPe, and Infibeam Avenues, who now dominate the offline payments market in the nation.

Razorpay would have likely paid close to $120 million for an 80 percent ownership in Ezetap since it had a post-money valuation of $145 million as of June 2021.

BigBasket, Reliance, Indian Oil Corporation, and Bharti Airtel are just a few of the major Indian corporations that Ezetap serves.

Helion Venture Partners, Social Capital, and JS Capital are a few of the investors in the business, which has raised around $60 million to date.

According to data platform Tracxn, Ezetap's Singapore-based firm, which manages the India entity, recorded revenue of $8.9 million for the year ended March 2020.

For that year, the company reported a loss of $8.3 million, and it hasn't yet declared its results for FY21 and FY22 (2021–2022).

The more, the merrier

Ezetap represents Razorpay's fifth acquisition in less than four years.

The financial unicorn acquired Curlec, a startup in Malaysia, in February 2022 for an unknown sum.

Then-CEO and co-founder of Razorpay Harshil Mathur had stated in an interview that the business was interested in enhancing its product offerings through possible acquisitions in different industries.

The market for payment gateways and offline PoS is becoming more competitive.

In contrast to competitors like Pine Labs and MSwipe, Razorpay is transitioning from an online to an offline model. Pine Labs, whose primary product is a PoS device for physical payments, joined the online market in November 2021 with the introduction of its gateway Plural.

According to some sources, MSwipe had plans to enter the online payments market after gaining in-principle clearance for the payment aggregator licence from the Reserve Bank of India.

PoS devices are now able to swipe cards in addition to displaying Quick Response (QR) codes for payments as Unified Payments Interface (UPI) transactions have replaced cash as the primary method of payment for both offline and online transactions.

The market is expanding as contactless payments using cards or devices with near-field communication capabilities gain popularity.

Sound devices that announce payment receipts to businesses for QR code-based transactions are being introduced by fintech companies to broaden their offers.

The market is currently controlled by Paytm, BharatPe, and PhonePe. MSwipe is the most recent entry.

Since they may be purchased ahead and rented on a monthly basis instead of through UPI transactions, soundbox devices also aid fintech companies like Paytm and PhonePe in generating income.