Transactions have, over time, evolved from the barter system to coins, which were gradually replaced by paper transactions. Digital transactions are merely the next step in the evolution of the payments process. Managing paper currency is quite a hassle, owing to the logistics and effort involved. Industry surveys estimate that the Indian banking industry spends approximately Rs 20,000 crore on managing cash on an annual basis, a number which could be considerably higher if we consider the country’s entire economy.
This unnecessary expenditure can be eliminated by replacing cash with digital payments tools (cue net banking and wallets), and since very recently, a new wave has been in the offing — digital meal vouchers. Corporates rely on meal vouchers like Sodexo, which can be used at a multitude of eateries and even grocery stores, for reimbursements, and to transfer tax benefits to them as the amount distributed as coupons is not taxable. At present, these vouchers are predominantly paper-based coupons. Over the course of their lifetimes, these vouchers need to be acquired/printed, stored, transported, and finally, redeemed. This requires a lot of investment of time, capital, and effort, especially if a particular company is operational in several cities. Moreover, employees also have to carry around bulky booklets in their wallets, as paper-based vouchers are often not redeemable online.
With several new developments such as UPI as well as the launch of the ‘Digital India’ campaign in conjunction with Fintech players already live in the Indian payments ecosystem, the vision of a digitally-driven Indian economy is fast becoming a tangible reality. Here are some industry veterans who are adding their colour to this wave, to realise this vision:
Bhavin Turakhia’s Zeta:
Background: Bhavin Turakhia started his first venture, Directi, when he was only 17, and has started over 11 ventures since, with ‘Zeta’ being the latest addition to his stables. They launched their first product, Zeta Meal Vouchers, in January 2016, which was the first of its kind in the country. The meal voucher market today is worth about Rs 4,000 crore, with approximately one-and-a-half million employees using meal vouchers in some form or the other in India, and the potential market size is estimated at over 10 million users. Each employee can easily save up to Rs 12,000 in taxes as a result of meal vouchers, and Zeta, through digitisation, is making the handling of the same less cumbersome. It also offers corporates the option to fully customise the solution, allowing them to pre-set rules of usage as per their company policies.
Concept: All transactions will take place on smartphones and devices. There are more than 200 million smartphones in India and the current market for meal vouchers is about Rs 4,000 crore. Their target over the next year will be to take this to Rs 8,000 crore. All their products are 100 percent compliant with IT and RBI guidelines, and as the RBI treats these as a prepaid instrument, they have established a commercial tie-up with RBL bank for their distribution. The HR team can transfer the vouchers to their employees’ Zeta app — available on Windows, iOS and Android — in one click. To combat India’s poor connectivity, Zeta enables the transfer of digital meal vouchers without talking to Zeta’s servers, which is a unique technology.
The uniqueness of Zeta lies in its customisability — any company can achieve a 100 percent customisation of the product to suit any internal guidelines.
The revenue model for Zeta Meal Vouchers relies on a fee they collect from corporates for availing the service. They also charge a small fee to the merchants.
Volume of business: They currently operate from eight offices across the country and have a 60-strong sales team. The startup has already partnered with over 1,00,000 merchants, and the parent company Directi’s 1,500 employees have doubled up as the beneficiaries of these vouchers too.
What to expect: Bhavin also states that the possibilities of digital vouchers are endless. “Eventually, we intend to bring all employee tax benefits and expense-management solutions on one platform. So, whenever a corporate ties up with us, all they have to do is opt for the entire Zeta bouquet of offerings to enjoy an end-to-end solution. Our product has launched in January, 2016. However, it has already seen an enthusiastic response from corporates. With over a 100 companies using Zeta Meal Vouchers, we have added one new company every working day since our launch.
Funding information: Bhavin has floated and bootstrapped a number of companies successfully, and is running Zeta in a cash-strapped manner as well.
Background: The next entrant in this market that is a pie as big as any, was Transerv, founded by four senior banking professionals— Anish Williams, CEO; Sandeep Ghule, CFO and Head, HR; Aditya Gupta, COO; and Anand Kapadia, Director, Sales and Distribution. Prior to establishing TranServ, all the co-founders worked together at HSBC, heading different business verticals. At the time, social wallets were just a unique, engaging tool to digitise everyday transactions and even enable splitting bills with family and friends. TranServ then launched India’s first social wallet, which is now being leveraged by several leading businesses such as BookMyShow, Askmebazaar.com, Portea, and Crownit, as well as a host of smaller merchants and Facebook stores. Under the TranServ umbrella, their Digital Meal Voucher programme was another step towards creating a seamless digital payments experience — corporate employers load meal tickets directly into their employees’ Udio wallets, which can then be utilised to make payments at any partner food establishment.
Concept: “We cut through the hassle of distributing meal coupons by enabling one-click disbursement of corporate vouchers. While HR managers can instantaneously transfer vouchers to all employees, employees in turn benefit from having their coupons secure in their smartphones,” says Aditya Gupta, COO at Udio.
Since the platform offers a single window to HR departments to digital offer various payments to employees, we are observing the proposition being liked and signed up by many organisations for their specific use-cases.
Volume of business: Housing.com, Polycab, Silicus, and Square Yards are amongst the companies which are currently optimising their corporate reimbursements and payments through Udio.
“We are signing up a few large corporates with over 5,000 employees, where these digital meal vouchers will also get used at their in-house canteens and other identified merchant segments,” says Aditya.
Funding: The company recently raised $15 million in a Series C round of funding led by Micromax and IDFC Mutual Fund.
What to expect: “Digital vouchers can also be locked for specific use-cases such as meals, gifting, rewards and fuel expenses by organisations, thereby ensuring that any disbursements can only be redeemed at specified outlets,” he says, cluing us into what may be on the anvil for the finance major.
Sodexo and Ticket are the market leaders in a space that is steadily evolving in order to catch the bus. Digitisation must be on the cards — or coupons, rather — for the veteran players in order to survive the onslaught.