Simpl started pilot projects in December 2017 with a clutch of offline retailers in food and beverages segment and now has about 15 offline merchants on its platform.
Digital payments startup Simpl, which has created a deferred payment system to help online retailers reduce delinquencies of transaction failures, is now taking the solution to offline players.
The company started running pilot projects in December 2017 with a clutch of 15 offline retailers in the food and beverages segment, CEO and co-founder of Simpl, Nityanand Sharma told Moneycontrol. Although the company hasn’t made any official announcement, the offline segment accounts for nearly 30% of its overall business.
“We are present with almost all the big online retailers, barring a few. Now we are innovating solutions for offline. It is going to be a big push for us this year,” Sharma said.
However, Simpl is refraining from the usual point-of-sale and QR-code system of offline payments. “It is going to be a hybrid, mobile-based online-to-offline model,” President and co-founder Chaitra Chidanand, said. “Mobile blurs the line between offline and online,” she added.
Currently, the company is working with retailers to introduce the order-ahead option, where users can place an order through an app before stepping into a cafe or store, and consume the same on their arrival. The founders also want to explore peer-to-peer deferred payments in the near future. But for now, the founders are keen to launch split payments between a closed group, in terms of peer-to-peer payments.
“Restaurants are also looking at running loyalty programs. So we are working on a solution where our online users can avail cashbacks or rewards when they walk-in for a meal at a restaurant. It will be synced,” Chidanand noted.
Online merchant partners of Simpl, such as Fassos, offers deferred payment system as a loyalty customer reward.
Simpl is often clubbed with pay later services such as LazyPay and EPayLater, which offers users to fulfill a transaction on a later date. However, the company differentiates itself from such services and suggests that it works with retailers to erode friction points that exist in transaction process. “We don’t compete with LazyPay or EPayLater. They are a payments option, we are a platform connecting two points,” Chidanand pointed out.
E-commerce players suffer from high delinquencies because of transaction failures, which is as high as 25% of the overall gross merchandise value. If we consider the number of people abandoning carts after populating it, the percentage is a whopping 70%, on average, across sectors. With Simpl, which adds up all buyer purchases across apps and lets you pay at the end of a cycle, e-commerce players have been able to bring down such delinquencies to almost zero. “Conversion rate for our merchant partners have also improved to 75% with Simpl,” Sharma lamented.
“There is a definite business opportunity in converting cash transactions for online players into digital transactions. It is also a very effective growth driver for online commerce companies,” he stated.
Digital transactions have flourished with the advent of online commerce in the recent past, but India continues to be a cash-driven economy and accounts for 68% cash transactions. In comparison, the US accounts for mere 9%.
Almost 70% of online transactions are still done using cash, while offline, it’s much higher at over 90%. Simpl is aiming to replace such cash transactions to digital ones through deferred payment. The company is seeking to do the same for its offline merchants as well.
