Infibeam Avenues shops for PoS companies to build full-stack merchant play

After adding neobanking to its suite of business-to-business (B2B) payment services, Ahmedabad-based digital payments and e-commerce platform solutions provider, Infibeam Avenues, is out shopping for a Point-of-Sale (PoS) provider.  

The company, according to people privy to the discussions, is said to have approached multiple players in the market. It is also understood to have applied for a loan of $80-100 million to fund the acquisition, sources have confirmed.  Detailed email queries sent to Infibeam Avenues did not elicit a response till the time of publishing the article.

If the current acquisition goes through, it will be the third acquisition for Infibeam in the payments' space. Infibeam acquired payment gateway provider CCAvenue in 2016, and announced buying Cardpay Technologies in 2020 for $1.06 million.  

If Infibeam succeeds in buying a PoS company, it will create a full-stack play for its small and medium business (SMB) focused payments business including offline payment acceptance, payment gateway, credit and neobanking services. A close contender in the space is the recently-minted unicorn BharatPe which provides QR-code based payment acceptance to SMBs.   

Founded in 2010 by former Amazon executive Vishal Mehta, Infibeam has sold businesses over the years to sharpen focus on B2B fintech play. It also provides an e-commerce platform solution to the marketplace for procurement of goods and services by public sector entities and government departments, and the Government e-Marketplace (GeM). With a 78% contribution, the company’s primary contributor to revenue continues to be its payment gateway business.

“Unlike POS terminals, QR code payments do not require a hardware setup -thus eliminating the need for set-up and maintenance costs. Further, merchant service charge associated QR payment acceptance is zero or minimal thus provides an alternate and a viable option for merchants,” Ravi Sharma, lead banking and payments analyst at GlobalData said.  

He added that while the number of PoS terminals have reached 5.5 million, doubling from 2016 to 2020, the absolute number in India is low compared to other geographies such as China, the US and UK.

There has also been increased focus on popularising PoS infrastructure in India with RBI expecting a six-fold rise in the segment by 2021.

“The rise in adoption of contactless payments will also push demand for contactless POS terminals as consumers are increasingly opting for 'contact-less payments to avoid any health issues. As per Visa, the scheme provider had enabled over 1 million PoS terminals in India to accept contactless payments, as of November 2020,” Sharma said.   

QR code-based payments do not include credit card-based payments. Other incumbents in the payments space including Pine Labs have been extending their merchant network by digitising their PoS.