EnKash: Powering India's SMEs and start-ups with a suite of corporate cards

The firm currently has a user base of 100,000 enterprises and processes transactions worth about Rs 28,000 cr a year

You've got a running business and need money moving in and out quickly and seamlessly. The problem is very few banks and institutes will give funds in the range of Rs 25 lakh to 50 lakh. Getting money from Banks is a long process and many may get rejected because they are too small.

It is this untapped market of small businesses and startups struggling with big-ticket payments that Naveen Bindal, co-founder, EnKash, believes occupies a large chunk of a $500 billion domestic opportunity estimated by Google-BCG in one of their reports. And this chunk has been lying under the carpet for years even as fintechs, banks, et al obsess about B2C payments or the B2B business involving large, well-known enterprises. It is a segment that Bindal, who has been in the payments and cards industry for the past 22 years in India and abroad, began tapping in 2017, when he quit his last job as CTO of CitrusPay.

Bindal joined hands with Hemant Vishnoi and Yadvendra Tyagi to start EnKash that year, and the trio rolled out their first payments product for SMEs and startups in February 2018. Incidentally, Vishnoi was instrumental in setting up and scaling India's first payment gateway at ICICI Bank, and was associated with CitrusPay before and after its acquisition by PayU. Tyagi was also with CitrusPay before EnKash took off. He was also part of the founding team at NPCI, which launched RuPay cards on PoS terminals.

How it works

The flagship product, called Freedom Card, is essentially a corporate card that an enterprise needs to spend about 10 minutes applying for on the company's website. "We collect all the information from the enterprise applicant and then we validate it," says Bindal, whose firm has partnered with six banks, including Axis Bank, ICICI Bank, HSBC, State Bank of Mauritius-India, Kotak Mahindra and HDFC Bank, to offer a product that can be used globally. Post validation, the case is taken to one of these six banks, and the card is issued once the client has been approved at the level of the issuer.

Once approved, the SME or startup user gets a DIY dashboard on his system using which he can generate the cards he wants and set sub-limits. He could, for instance, set up a Rs 25 lakh limit on a payroll card he has generated and assign the spending power to select executives within his organisation.

The EnKash suite of corporate cards essentially automates key payment obligations such as supplier invoices, utility bills, rent, payroll and tax payments enterprises in the Rs 5-500 crore band. Bindal says, "A Rs 5 crore business today will probably reach Rs 50 crore in five years' time, because the pyramid in India is moving very fast."

He adds, "The client isn't required to change his existing bankers or accounting package, such as Tally or Quickbooks. We simply build a layer on top of these things and put our basic product onto it."

Explaining that the corporate card ecosystem was completely off limits to the market segment EnKash serves today, he says, "These enterprises (SMEs and startups) were struggling to get company cards from banks because they didn't have enough credit worthiness." He claims that a lot of his clients today come to EnKash purely because of the convenience that it provides them. A few approach the firm wanting to know how they can give their executives a company card that allows them to spend on the company's behalf, while ensuring they don't misuse the product.

"Our solution allows these companies to confidently use our financial products and have them integrated into their existing accounting systems and their bank partners. This way we manage to automate their entire workflow and have instruments that solve the twin challenges of convenience and credit," says Bindal.

He claims a card from EnKash that has credit on it, can be used anywhere in the world. "Imagine you could actually use this card to do whatever, get 30 days' interest-free credit on it and pay after getting your statement," he quips. "As a businessman, you are getting free credit as you're getting a tool so that you don't have to move money in cash or through a check or any other mechanism."

On how the latest RBI guidelines barring non-banks/fintechs from loading credit on to cards affect EnKash, Bindal states very clearly that EnKash is not a balance sheet play, and doesn't bring in money from its pocket. It is not a credit or lending company--something he and his partners have been very clear about at the outset.

"Our expertise is not in lending--we leave that to the banks and NBFCs. Our expertise lies in technology, for which both, the lender and customer come to us," explains Bindal.

Funding and operations

Bindal says there are more than 100,000 businesses on the EnKash platform. His company processes transactions worth about $3.5 billion (about Rs 28,000 crore) a year, a milestone achieved in a matter of four years. He adds that EnKash is growing almost 25 per cent quarter on quarter and has about 120 people on its rolls. Bindal sees this count going up to 250 by the end of the current fiscal year.

The firm received $20 million in a Series-B round led by Ascent Capital in April this year. Other investors included Singapore-based VC, White Ventures and Baring India. It had earlier raised about $3 million from Mayfield India and Axilor Ventures in a Series-A round.

EnKash has not broken even yet, though Bindal says it was close to achieving that last year. "But then we decided not to do so because now is the time for us to grow. So we are actually now pumping in capital. But I think we should break even in 36 months."

The company earns a fee on each card subscription and also gets a share of the revenue earned on each transaction done on its card.

CardX

Launched in the first quarter of the current fiscal, CardX is essentially a plug-and-play Banking Infra API Suite that enables non-fintech enterprises (a food or cab aggregator or even a logistics firm, for instance), fintech companies, banks and NBFCs to launch their own branded cards, BNPL and reward programmes hassle-free.

The technology enables multiple use cases of credit cards, prepaid cards and wallets. It offers a complete card management suite and integrated functionalities such as real-time KYC, fraud and authorisation controls, reward management, multiple credit products like EMI, BNPL and supply-chain finance, data analytics and insights, among other essential elements. Using EnKash’s Open API Stack, businesses can issue credit and prepaid Cards to their customers, users, agents, employees, and others, for their respective use cases.

What differentiates CardX from other market players is its low-code modern stack and innovative solutions around KYC and compliance, which helps companies go to market faster. It also comes with a curated set of partners whom clients can leverage for their customer communication, operations and customer service setup. CardX is currently integrated with SBM Bank as its strategic issuing partner, with more banks in the pipeline.