The best gifts are those that keep on giving. It turns out buying a gift-management platform could work out the same.

Offline payment processor Pine Labs bought gifting platform Qwikcilver Solutions for $110 million last month. And that buy checks multiple boxes for Pine Labs—more revenue, more retailers to reach out in India and internationally. But most importantly, it lets Pine Labs cross over—from enabling payment acceptance over point of sale (PoS) devices across 100,000 brick and mortar retailers to the madly competitive world of powering payments for online retail.

This comes at a time when every single online payment company—Paytm*, PhonePe, Google Pay, Amazon Pay—has waded offline. This despite online retail growing at a rate of 50% between 2012-2017. And now, the reverse trend is in motion, starting with Pine Labs. The nearly $1 billion-valued Pine Labs wants to tap Qwikcilver’s online retailers like Amazon, Flipkart, and manage more than just gift cards. It also wants to become an online payment gateway. Offline to online is a first for India and Pine Labs is leading the shift.

But it isn’t going to be easy.

Pine Labs is entering the den of payment gateways like BillDesk, PayU, Razorpay, CC Avenue, Instamojo that help businesses accept all forms of digital payments from wallets to net banking to cards to Unified Payments Interface (UPI). Indians spend close to Rs 20,000 crore ($2.9 billion) monthly online, all of which is processed by these gateways, according to industry estimates. A large number on the face of it, but only two out of 10 retail payments happen online.

Payments that happen in offline stores account for roughly 80% of the total payments that are processed in a year, say those in the industry. And that’s where PoS companies like Pine Labs, Ezetap, M-Swipe are at now; however, they cover only about 1% of the 14 million retailers in India. But as retailers see merit in being present both online and offline as omni-channels, offline payments processors are following suit.

“We want to enable our merchants wherever they want to grow,” said Vicky Bindra, CEO of Pine Labs, over email.

And to do that, 20-year-old Pine Labs, which has raised over $200 million, is counting on Qwikcilver’s network. The Bengaluru-based Qwikcilver is the largest of its kind in India and works with about 200 top retailers both online and offline. And online retailers like Amazon (which bought a 10% stake in Qwikcilver in 2017) make up 35% of Qwikcilver’s revenues. Amazon users spent over $6 billion in 2018, and about 60% of people pay for the goods online with the rest opting for cash on delivery. A chance to gain even a sliver out of those transactions would be well worth the $110 million Pine Labs is spending on the acquisition.


Arundhati Ramanathan

Arundhati is Bengaluru-based. She is interested in how people use money in the digital age and how new economies will take shape based on that interaction. She has spent over 10 years reporting and writing on various subjects. Previous stints were at Mint, Outlook Business and Reuters.

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