Paying in cash is so yesterday. Ezetap bags $23M to help mom-and-pop stores accept cards

Indian mobile payment startup Ezetap today announced that it has secured US$23 million in series C funding from Horizons Ventures (the private investment arm for Li Ka-Shing), Capricorn Investment Group, and existing investors. Last year, the startup raised US$8 million from Helion Advisors, Silicon Valley-based Social+Captial Partnership, and Berggruen.

The Bangalore-based startup makes a Square-esque gadget that attaches to a smartphone and allows retailers and merchants to process credit card transactions on their phones. It doesn’t buy third-party readers, but has its own production system. Ezetap’s customers include companies in ecommerce (so they can take payment upon delivery at the doorstep), bill payment and collections, insurance, restaurants and hospitality, retail, taxi services, and organizations focused on financial inclusion.

Launched in 2013, Ezetap says it processes transactions worth US$1 million per day through 60,000 points of sale across India. It claims to be adding 500 new small retail merchants a week and will use the funds to increase its reach to 200,000 merchants in a year.

Ezetap competes with Mswipe, which got US$25 million in series C funding last month. According to Ezetap co-founder and CEO Abhijit Bose, his startup is unique because Ezetap’s mobile applications are configurable by any merchant.

“Not only can we easily enable a storekeeper anywhere in the country to accept all forms of payments and increase their sales, we can actually turn his or her small shop into a bill payment center, eGovernment service point, full service bank branch, and much more with only a few keystrokes,” he says.

Bose is a Harvard graduate and former Intuit employee. He teamed up with CTO Bhakta Keshavachar and chairman Sanjay Swamy to launch Ezetap. It was incubated by Banglore-based Angelprime. With this fresh investment, Chamath Palihapitiya, founder of Social+Capital, who is a former Facebook executive, has joined the board. Ezetap’s early backers include individual investors Peter Thiel (PayPal co-founder and early Facebook investor), David Sacks (Yammer’s founder), and Nicolas Berggruen of Berggruen Holdings, in addition to American Express.

Ezetap charges a basic banking fee and a subscription fee. Since most of the purchases in India are based on cash-on-delivery terms, online shops are equipping their couriers with card-readers. Less than five percent of the 12-15 million small- and medium-sized enterprises in India are equipped to swipe a card, which makes it a huge market.