EDITIONS
Startup

This fintech platform lets you pay rent via credit cards and get rewards too

Aparajita Choudhury
17th Mar 2017
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With RentPay, tenants can pay rent to their landlords via credit cards issued by any of its partner banks for a small fee of 0.39 percent of the rental amount

Manoj Nair, much like many of his NRI peers, found the process of buying or leasing out property in India to be an arduous task. While doing his Ph.D in 2013 at the London School of Economics (LSE), he noticed that many of the fellow NRIs were uncomfortable with the idea of investing in property in India as they lived too far and could not bring themselves to trust the real estate agents back home with the job. His observations were corroborated by a colleague's research, which confirmed this inherent fear of investing in property in India.

“I was so fascinated by the subject that I started reading a lot on the topic and signed a contract with her to buy the rights of her dissertation to evaluate the feasibility to stitch together a business around it,” says Manoj.

To dive deeper into the market, Manoj ended up analysing and researching over 212 global real estate companies. During his own research he discovered that even though there was a huge demand for rental housing in India, the NRIs, who held multiple properties there, preferred to keep them vacant as they had no trust in the local real estate agents.

He also realised that the NRIs were not just depriving themselves of potential rental income owing to the trust deficit, they were also up against an Indian government measure that sought to tax all vacant properties by applying the prevailing market rent.

Manoj felt the need to step in as a trustworthy pan-India real estate agency that would rely on technology to serve both landlords and tenants by matching their respective needs, from searching for the right property to finalising the tenancy deeds. Thus RedGirraffe was born in November 2015.

In addition to using a proprietary algorithm to sync services for landlords and tenants, RedGirraffe also provides 24x7 customer service support, dedicated relationship managers to attend to customers' needs as well as transaction history of landlords and tenants

Recently, the founding team of ten at RedGirrafe has entered into partnerships with various local and global financial institutions for launching its products catering to landlords and tenants.

Sharathbabu Maramraju, Head, Strategy and Product Innovation with Manoj Nair

One of the flagship products of RedGiraffe is RentPay, with which the startup seeks to create transparency and trust in real estate transactions in each market it operates in. To extend the offering to the banking consumers, the startup has tied up with 40 banks in India and seven banks in Europe.

“Some of the banks and credit card companies in India that are going live pan-India with RedGirraffe’s RentPay (patent pending) platform are SBI-GE Cards, ICICI Bank, HDFC Bank, IndusInd Bank, Axis Bank and Kotak Mahindra Bank,” said the company’s blog.

With RentPay, a tenant can pay the rent to their landlord from anywhere via credit cards issued by any of the partner banks for a small fee 0.39 percent of the rental amount. For example, Rs 39 on every Rs 10,000 of monthly rent. Service tax of 14 percent shall be applicable extra. There would be no hidden fees whatsoever.

How to pay via RentPay?

A user can register for RentPay by logging on to RedGirraffe website. There, he needs to click on the RentPay button, fill in the tenant and landlord details, upload the tenancy agreement and finally hit the 'Submit' button. On successful completion of the processes, RedGirraffe would generate a unique algorithm-driven ID number.

One can also go to one's bank’s site and register with RedGirraffe for paying the monthly rental. On completion of registration, the user is conveyed the approval/success status within two days.

As for RedGirraffe's USP, Manoj says that it allows one to pay rent via credit card or debit card at a very low transaction cost using blockchain processes. Blockchain-based backend processes run on proprietary algorithm to make payments move securely from tenants to their respective landlords. Tenants gets 45-60 days of free credit period (varies from bank to bank) and reward points (varies from bank to bank and on the category of card one holds).

Thousands of tenants and landlords have logged onto RentPay since its launch in India in February this year. According to Manoj, last month, 180 banking customers initiated the process to move their banking relationship to that of RedGirraffe’s partner banks offering RentPay.

“Every tenant using RedGirraffe’s RentPay platform can avail a one-time five-day brokerage discount in every city that RedGirraffe currently operates in (Noida/NewDelhi/Gurgaon) or plans to launch in (Mumbai, Pune, Hyderabad, Bengaluru, Chennai and Ahmedabad) in the near future,” says Manoj, an alumnus of Harvard Business School besides LSE.

A serial entrepreneur who started a business at age 21 and sold it for a big profit at 25, Manoj was a bureaucrat in the Ministry of Finance, Government of India, before he went on to head a global asset management company in London. He is an electrical engineer and a holds Masters in Law, Economics and Business.

Market Opportunity

RedGiraffe has operational offices in London, New Delhi and Gurgaon with a team of 38 people. “We are keen to take RedGirraffe public on or before August 7, 2022 by ringing the opening bell at the Nasdaq stock exchange,” says Manoj.

A simple search threw up the names of two players that resemble the RedGiraffe model: Paymatrix and PayDeck. According to the Reserve Bank of India, a total of 24.51 million credit cards were in operation in March 2016. The number of transactions on credit cards grew by 27 percent for the year ending March 2016. In March last year, total transactions through credit cards numbered 72.22 million.

If the number of credit card users and number of transactions keep growing at this pace, it would be fair to say that the business opportunities will multiply going forward for this segment which is very niche as of now.

Website: RedGirraffe

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