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Home-grown payments solutions unicorn Pine Labs is planning to enter new overseas markets on the back of encouraging growth trends in global financial services.
 
The Paypal- and Temasek-backed company will launch its integrated consumer ‘Buy Now Pay Later’ credit offering across five Southeast Asian markets through a partnership with card network major Mastercard—in Thailand and Philippines by February 2021 and, subsequently, in Vietnam, Singapore and Indonesia.
Pine Labs has already rolled out its ‘Pay Later’ solution in Malaysia with Mastercard, which had made a strategic investment in the Noida-based fintech firm earlier this year at a valuation of $1.6 billion, making it the first startup in 2020 to become a unicorn—a startup with valuation of $1 billion, or more.
 
The partnership with Mastercard will enable Pine Labs to service three other banks in the Southeast Asia, where it will offer ‘Pay Later’ as a technology service to offer credit, debit and digital equated monthly instalment (EMI) solutions, as well as ride on online payment gateways to establish its presence on online shopping websites. ‘Buy Now Pay Later’ products allow users to turn their purchases into EMIs at 0% interest.
 
By mid-2021, Pine Labs also plans to introduce prepaid vouchers and gift cards through its subsidiary Qwikcilver, which it had acquired last year, to extend its footprint further in these new markets.
 
“In India, almost 20% of all digital transactions were converted into ‘Pay Later’, and we see a similar trend unfolding in Southeast Asian geographies. The biggest advantage of ‘Pay Later’ is that it allows merchants to boost sales and helps consumers upgrade their purchases, due to the free cash available. Mastercard is a predominant player in Asia, in the debit and credit card markets, and this solution will help improve checkout experience for its customers," said Amrish Rau, chief executive, Pine Labs, in an interview.
 
According to Mastercard research, 43% of consumers in Southeast Asia will be willing to increase spending by at least 15% if they were to pay in instalments. Within a year, Pine Labs has already equipped 25,000 merchant outlets in Malaysia with its ‘Pay Later’ solution.
 
In July, Pine Labs had also invested in Singapore- and Malaysia-based loyalty payments platform Fave.
In India, Pine Labs is estimated to have a 75% share in the offline EMI market among fintechs. ‘Buy Now Pay Later’ based purchases were up by 30% year-on-year in October, with Tier 2 and beyond cities contributing 54% to the overall transaction value of EMI products, on its platform, Pine Labs had recently said.
 
“It’s not just access to credit but customers are also looking at better cash flow management solutions in the market. The full potential of EMI-based products can be unleashed if they are present at the point of purchase, helping customers make more calculated decisions. Hence, instalment options complement the wide array of services which Mastercard offers including its payment gateway," said Sandeep Malhotra, executive vice president, products & innovation, Asia Pacific, Mastercard.
 
Pine Labs, which automates offline store fronts and equips them with digital payment solutions has seen almost a 67% jump in monthly merchant on-boarding, this year, owing to shift towards digital, this pandemic. It moved from onboarding 12000 merchants on a monthly basis to close to 20000 currently in the last few months.
 
According to Rau, Pine Labs clocked revenue of about $100 million in 2019-20. Even Qwikcilver has been growing at 50% annualised basis.
 
Pine Labs now plans to get back into providing cash flow-based lending through its banking partners, to merchants starting January, next year. It had paused operations on this front earlier this year.
 
It processes over $30 billion of payments per year, serves about 150,000 merchants across 450,000 network points in South Asia, Southeast Asia and the Middle East, and is backed by Temasek, PayPal, Actis Capital and Sofina.