[Funding alert] Public transit focussed payments startup CityCash raises $1M from Orios Venture Partners
CityCash, a Mumbai-based fintech startup focussed on creating a transit led micro-payments ecosystem, has raised its seed round of $1 million from Orios Venture Partners, an early-stage venture capital fund.
The company said the new funds will be used for expanding market access, merchant ecosystem, and to develop technology to deploy Open Loop National Common Mobility Cards on SoftPOS and digital ticketing solutions.
CityCash had earlier raised funds from Fino Paytech, the promoter of Fino Payments Bank and a fintech company that works towards enabling financial inclusion.
Founded in 2017 by Vineet Toshniwal, an alumnus of FMS Delhi, who had earlier worked at CitiBank, Bank of America, Infosys, and Equirus Capital, CityCash offers a multi-purpose NFC-based smart card that can be used to transact in an offline mode in transit and retail, rendering a smooth tap-and-pay experience for consumers.
The startup claims to be creating an offline tap-and-pay based payments ecosystem for 200 million+ low and middle income consumers who use public transit and make small retail transactions. CityCash works closely with the card issuer banks, bus corporation partners, and payment networks in order to establish the micropayment ecosystem.
Vineet Toshniwal, Founder, CityCash, said,
“The current ticketing model is high touch and requires exchange of paper tickets, coins and currencies. The need of the hour for the bus corporations is to provide cashless, contactless, and COVID-safe travel experience to the consumers by adapting technology at a rapid pace. The RBI’s recent announcement of offline payments in retail will be a gamechanger. Transit can play a pivotal role as it can drive very fast consumer acquisition and habit change from cash to tap and pay.”
Partnering with MSRTC, the state bus corporation of Maharashtra, CityCash said it has issued three million cards to consumers in nine months since it went live, and is accepted in 20,000 buses, each a unique point of sale. MSRTC has a daily bus ridership of seven million and an annual bus ticketing turnover of $1 billion. Transit payments necessarily require a phygital model where the consumers have to be serviced through an agent network. FINO and CityCash have together activated a large network of 4,000 agents in Maharashtra.
“India’s micropayments number over one trillion transactions in volume and $500 billion in value take place purely in cash as none of the existing players have built a win-win model for consumers-merchants alike. These small payments cannot be carried out online with dependency on network availability and high charges to merchants. UPI and card POS machines only operate in online mode, which is not suited for micropayments. These micro SMEs and consumers are also denied formal working capital or loans due to absence of data," said Anup Jain, Managing Partner at Orios Venture Partners.
He added: "CityCash is uniquely positioned to create a transit-led, offline tap-n-pay ecosystem on the lines of globally successful models of HK octopus and London Oyster.”
Edited by Megha Reddy