Novopay expands to consumers with mobile wallet

Novopay Solutions, a mobile payments entity, backed by technology investor Vinod Khosla, on Wednesday announced a consumer wallet offer. This allows users to pay digitally for small transactions, as also to remit or withdraw cash at local stores across India.

The idea is to enable users to buy goods and services in neighbourhood shops through its wallet, reducing dependence on cash.

The firm has enrolled 12,000 outlets, three of four in rural areas, and plans to expand this 10-fold to 120,000 by the coming March, said Srikanth Nadhamuni, chairman.  Novopay has been incubated at Khosla Labs here. It says it hopes to have three million consumers using the app by next year.
 

“The technology today allows banks to make profits with customers having a balance as low as Rs 500. It was not possible earlier,” said Vinod Khosla, chairman of Khosla Ventures. This way, he said, India could add hundreds of millions of new banking customers, leapfrogging the traditional banking system, similar to how India became a mobile-first country, leapfrogging the landline telephone era.  

Khosla said that financial inclusion in the country would increase as friction in banking reduced and more people were enabled to make banking transactions digitally.

Novopay would apply for a payment banking licence again — its earlier application was rejected by the Reserve Bank. “Our initial model of building through partners is the best. We have more partners that will create a better system,” said Khosla.

Once the Unified Payments Interface is implemented by the National Payments Corporation of India, it would allow wallets such as Novopay and Airtel Money to transfer funds without any issues, similar to the banking system.

Novopay has partnered with Bank of India, Axis Bank and RBL to offer banking services. RBL has an open application interface, the first by an Indian bank, for partners such as Novopay to integrate its wallet with the banking back-end, said Narayan Ramachandran, chairman of RBL.

Novopay is also accepted in 85,000 outlets through partners such as Ezetap, Roadrunnr, EBS and Innoviti.  

Novopay Solutions uses an Aadhaar biometric scanner to enable people’s banking transactions at a neighbourhood shop. The app can be downloaded on Google Playstore, officials said, as a majority of Indian users had Android phones.