Razorpay said the Ezetap deal would boost efforts to tap the offline market which still accounts for many electronic payments in India.
India’s Razorpay said on Thursday it had bought offline payments firm Ezetap, marking the Sequoia Capital-backed firm’s latest bet on the payments industry in a deal which a source with knowledge of said was worth $150 million.
Razorpay, which is valued at more than $7 billion and offers payment gateway services for online merchants, said in a statement that the acquisition was its biggest to date.
It said the deal would boost efforts to tap the offline market which still accounts for a bulk of electronic payments in India. Ezetap, whose products include point-of-sale machines, processes more than $10 billion in annual transactions in India.
Razorpay co-founder Shashank Kumar said Ezetap will help it develop in this area. “There is still a large portion of offline payments and in-person payments that we don’t cover,” he said.
The source said Ezetap will continue to operate independently after its acquisition, adding that the deal includes a $150 million payment to Ezetap, with another possible $50 million linked to its performance over the next year.
The deal will also help Razorpay cross-sell its services, including loan offerings, to offline businesses, Kumar said in an interview, adding that Razorpay currently serves more than 8 million businesses and processed payments worth $80 billion since its inception about eight years ago.
The acquisition comes as solution providers in India try to secure a tight grip on both online and offline payments.
India’s Pine Labs, which for years focussed only on offline payments, last year started processing online transactions, a business from which it is targeting $4-5 billion in monthly transactions within two years, Reuters reported. — Reuters