A PoS player, Mswipe Technologies, backed by Ratan Tata Associates, is seeking to transform into a digital SME bank within the next four to five years.

The bank will focus on serving small merchants and their needs. As part of its plans, it will expand value added services, such as insurance, at point-of-sale terminals and micro ATMs, said the new CEO, Ketan Patel.

He succeeds Manish Patel, founder of a platform for financial services for SMEs who will become managing director. Before joining CASHe, Ketal Patel was Executive Director & Chief Executive Officer of this digital credit company.

Since its inception in 2011, Mswipe has grown to serve 670,000 PoS locations and 1.1 million QR merchants across the country. It is also an end-to-end digital enabler for small and medium-sized businesses.

In 2017, UC-RNT Fund, an alternative investment fund partnering with RNT Associates (Ratan Tata) and the University of California, invested in Mswipe. Getting insights from RNT associates and the University of California has been helpful in building the business, Patel said. Matrix Capital Partners, DSG Partners, and Epiq Capital are other investors in Mumbai-based Mswipe.

Patel said there are currently 670,000 merchants in the Mswipe network, and the goal is to have one million merchants on board before applying for a banking license (Small Finance Bank). At the same time, the company will focus on micro-ATMs and merchant loans to help it run a bank.

Mswipe, while it has lending partnerships with financial institutions, scouts for non-banking companies to engage in direct lending. The company expects to begin lending under the NBFC model in the second half of the current financial year.

Patel said NBFCs would have equity investment of Rs 50 crore and loan books of Rs 150 crore in the current fiscal year.