Novopay to spin off retail biz, focus on banking software

livemint.com:

NEW DELHI : Khosla Ventures-backed Novopay Solutions Pvt. Ltd is in the process of demerging its retail business. The company will now only house its banking software business, which was recently rebranded as ‘Trustt’, chairman Srikanth Nadhamuni said in an interview.

Founded by Nadhamuni in 2014, Novopay Solutions began as a platform providing payments and banking services to unbanked and rural customers. Over the years as payments market changed with the emergence of UPI, the Bengaluru-based company started ‘Trustt’ to cater to the needs of financial institutions. “The Novopay Solutions’ business has a focus on banking SAAS products whereas the retail payments business is focused on B2C channel.

Considering the two different set of offerings, targeting two separate market and audiences, the demerger was a logical next move," Nadhamuni said. Novopay Solutions is spinning off its retail payments business into a new entity Novopay Retail Solutions Pvt Ltd, which was set up in March 2023. Separately, KYC-startup Veri5Digital, which was launched by Khosla Labs Pvt.

Ltd in 2016, is being merged with Trustt. “We are in the process of applying for the merger of Trustt and Khosla Labs through NCLT," the company said in response to a query. Novopay’s retail business, which works as BC (business correspondents or banking correspondents), lets domestic money transfers and AePS (Adhaar-enabled payment system) withdrawal services, via kirana shops.

It claims to have created a network of 100,000 kirana stores across 23 states. However, the financial inclusion space is now led by fintechs like Paynearby, Spice Money, Fino Bank and other payments banks. Asked if that was a reason to go slow on the retail side and put more focus on the