How Pine Labs Triumphed as India’s Largest PoS provider?

A decade-old establishment that has become conventionally more relevant and ahead of its time.


In the field of enterprise payment systems and solutions, the jaded and aged are conventionally outmoded but some exceptional unicorns like Pine labs pursue a mark firmly in the history of time. An elementary start-up that kicked off as a card-predicated payment platform focusing on and facilitating the retail Indian petroleum sector now dominates the South-Asian market.

Pine labs witnessed fluctuating dynamism and suffered consequential losses in FY 2018-2019 while also astonishing the market and generating massive headlines as the first unicorn from India in the pandemic infested year as it ended 2020 with a path-breaking overall company valuation of $2 billion.

Pine Labs: Oscillating Initial Years

An idea that moulded into loyalty points and a card-based payment solution founded in 1998, was the brainchild of Lokvir Kapoor, Rajul Garg, and Tarun Upadhyay. Pine Labs largely targeted the petroleum sector from 1998-2004, until two of its founding members Rajul Garg and Tarun Upadhyay decided to quit Pine Labs.

What transpired next was nothing less than all shades of a dramatic evolution for Lokvir Kapoor, who officially took charge as the CEO and seamlessly undermined the payment infrastructure in the petroleum industry.

Lokvir Kapoor invested time to indulge in and consider the technical offerings of banking systems in the early 2000s. The banks offered a more complex and subjectively inconvenient sales platform to merchants facilitating transactions over phone calls. Lokvir identified the dire need for a digital payment atmosphere. Hereafter, Pine Labs diversified its branches and entered the retail PoS (Point of Sales) payment systems.

How Did Pine Labs’ Real-World Payments Journey Begin?

Pine Labs worked for the following decade maintaining a low profile, picturizing the potential digital fintech advent.

From 2005-2009, the company commenced with EVM standard payment method and Visa certification, launching its multi-acquiring payments solution. Pine Labs partnered with known banks and archivist entities providing banking solutions and PoS machines to perform the role of processing diverse digital payments.

Pine Labs soon understood that the consumer banking experience is of utmost importance and to fill in the gap, user involvement should be the actual motive. Pine Labs centered its production on interfaces that allow customers easy accessibility and valuable satisfaction.

The year 2009 became a crucial year for the business as it raised a seed funding of $1 million by Sequoia Capital. Pine labs, in addition, inhabited a cutting-edge advertisement route where the partnered banks referred their PoS machines to entry-level businesses and consumer merchants.

Pine Labs not only understood consumer requisites and grievances but also worked as a remedy for consumers experiencing a digital dilemma when it comes to utilizing banking interfaces.

By truly venturing into the digital payments market in 2009, growth escalated, as from 2010-2011, Pine Labs overseas intervention fueled designing and developing an enterprise platform for Telekom Malaysia.

A Game-Changing Shift to Cloud Storage

In 2012, Pine Labs carved a revolutionary technological advancement solely by the move of the Reserve Bank of India (RBI) that acted as a catalyst, enrolling banks to surge securities on debit cards, thereby increasing the authoritative ordinance for debit cards in India, parallelly shooting up the demand for the company’s PoS terminals.

Analysing the hike of e-commerce websites and online transactions, Pine Labs developed a cloud-based PoS gateway to set foot in the offline market, in addition, clearing a secondary barrier of storage in chips acquired by machines, a 2013 technology.

The cloud-predicated system shunned away from the bank-inclined pre-existing plain ‘vanilla’ cards PoS interface, as cloud storage was highly secure, integrated, and primarily crafted to deduct on spending and sizing noticeable revenues for retail merchants.

Pine Labs’ merger with known banks enabled growth, structuring it into a consumer-friendly merchant platform offering transaction-predicated solutions, layered analytics, integrated billing, cashback, and much more.

The Digital India Setup and Introduction to Transparent UIs

The debut of UPI into the market in 2016 was simultaneously followed by the implementation of Demonetization in 2017 by the Central government raising a need for digital transaction platforms.

To face its cut-throat competition, Pine Labs commenced designing android applications and setting up programs, allowing merchants to witness consumer marketing psychology, providing them with an upper hand in understanding business nuances.

MyPlutus and BusinessPlus developed by Pine Labs were applications and programmes that availed merchants to engage in marketing programs and real sales transactions. Plutus Smart intellective, an android operated transaction terminal functioned as a collective data resource for comparing EMIs offered by different banks, further introducing in-built bar code scanners.

The economic policies noted in India integrated strength to Pine Labs to boost digital transactions, enabling UPI and wallet predicated transactions through PoS.

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Digitalisation acceptance in India requires an inclusion of small merchants to maximise trade across the country's small cities.

Pine labs and Its Route to Consistency

The (0-90 days) credit allocation scheme of providing merchants with credit enabled surmounting business needs. Pine Labs partnered with top NBFCs providing retailers with tax and hassle-free loans with the privilege to adjust the duration and daily amount to pay in instalments.

Access to no-cost EMIs from banks and for merchants at the PoS made Pine Labs a digital bull, enhancing the cognition of merchants with Pine Lab.

Pine Labs also included allegiance and gift incentives for its merchants and customers, hooking consumers, and expediting the business approach.

In 2017, Pine Labs as an Indian start-up marched towards international waters, exclusively partnering with CIMB bank in Malaysia. Pine Labs in the ending stages of 2017 shifted focus towards building concise and potential merchant gateways and transaction technologies for diverse merchant businesses. Topically, Pine Labs claims to have a network of 150k merchants in over 3700 cities in India and Malaysia.

Pine Labs marked its first recorded profit in FY2017, though the exposure was short lived as in the following years, 2018-2019, Pine Labs faced losses due to high expenses and lack of understanding profitability ratios. The net loss figures escalated 4.46 times, though, abbreviating taxes the overall loss figures dropped by Rs.18.4 Crore to 16 Crore in FY18 and FY19 respectively.

Pine Labs acquired $82M in Series B funding majorly from Actis Capital and Altimeter Capital on 13 March 2018.

Pine Labs centred limelight after its official announcement of Temasek from Singapore and fintech platform PayPal acquiring minority stakes in Pine Labs amounting to an amalgamated $125million.

The decision seemed to be a thoughtful one, as Temasek availed Pine Labs to settle its foothold in the regional markets of South Asia while PayPay being an international denomination would have helped Pine Labs to enhance and redefine the pre-subsisting products catered.

Pine Labs: An Inclusive Business Model

Pine Labs can now be termed as a sound profit-seeking fintech major that is availing merchants to expand, grow and execute daily business with efficiency. The company claims to revenue growth of 25-30 per cent ($110-120 million) per annum.

The topical accommodations of Pine Labs include application-predicated business growth programs, baking solutions, instant EMIs, e-wallet transactions, designated subject promotions, Pay by points, currency conversion, and refund solutions.

Highlighting the most awaiting aspect, the company is in touch with law firms, auditors, and bankers but has not yet promulgated a timeline to go for an IPO.

Pine Labs has always thought out of mere office cubicles, investing funds overseas to perforate deep into the international markets. The former company CEOs have invested the most valuable of all entity “time” in studying the market with an exhaustive analysis of business trends, shift, merchant analysis, identifying consumer behaviour and needs.

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Digital payments in India will authentically grow if the MDR strategy is taken to a whole incipient stage. In India, QR and UPI will migrate to digital terminals, which will necessitate investment.

Seeking Growth in a Global Crisis

Pine Labs has redefined the digital transactions platform introducing door-step commerce, offline to online business, pay later or credit schemes, authentically transfiguring UPI and QR predicated transactions.

Post the onset and continuation of the COVID-19 pandemic, Pine Labs claims to have digitised 25,000 stores, denoting the acceptance of digitalisation inground urban suburbs.

A move by the RBI in 2020 where it increased the inhibition on contactless transactions from Rs.2000 to Rs.5000, giving an upper hand to Pine Labs by promoting digital transactions.

The company additionally enabled 150,000 outlets to pay later accommodations.

Pine Labs with backing from MasterCard aims to recommend and pitch its merchant technology to 5 countries further opening its mobile PoS payment gateway to external developers.

The company in 2020 gained investment from Lone Pine Capital, which was the overseas company’s first private market investment of the year. Pine Labs currently is backed by investors namely Lone Pine Capital, Sequoia India, Temasek, MasterCard, PayPal, Actis, and many more.

With over 2000 competitors, including First Data, Clover, Cashfree, and others, Pine Labs remains ahead of the pack, despite the fact that significant market sharks such as Reliance Group are now making relentless efforts to penetrate the digital space with support from companies such as Google.

Pine Labs seems to have been looking upon its competitors not as rivals but as an opportunity to grow in a shared front, additionally contributing to bringing back the economy for new and small-scale merchants.

The Founders of Pine Labs: Lokvir Kapoor, Rajul Garg, Tarun Upaday

Pine Labs Predicting the Future of Technological Gateways

Pine Labs had earlier in 2020 launched an all-tap ePOS (electronic point-of-sales) application for contactless payments and later categorically designed a potential game-changer business application store that enables the merchants to download inventory, HR, and business expansion applications.

Besides constructing technological solutions, Pine Labs prognosticates open banking to advent the future financial solutions with a consumer-predicated front utiliser interface, paving a pathway for an inverted classic bank.

The future could potentially drum up a banking application that consumers would visit, bring it on to their terminals, hence, one banking terminal could be processed to function as required on different terminals.

From bringing in a game-changer PoS to analysing future trends, Pine Labs has not only followed a software or tech-centric approach but additionally has gone beyond the horizons of payments.

A Rearview to the Near Future

The company aims to increase credit outlets for diminutive merchants to have access to profitable business and growth opportunities. The company aspires to perforate deep into the global markets with backing from MasterCard making India a living digital highway for overseas businesses.

Pine Labs with its all-inclusive approach bridged banking solution blocks, providing Indian merchants with a platform to seek profit from their businesses. Pine Labs is a 22-year-old company, yet at its core, still has the characteristics of a fresh startup, including risk-taking, a positive attitude toward failure, and a persistent think beyond approach.

Seeking to live up to its company mission and vision statement, “advancing accommodations for boosting the economy in local markets for merchants”, it would be anticipated to witness what Pine Labs does further in the digital business space.

Pratik Jain
Pratik Jain
Pratik is an intern at Dutch Uncles, his interest area is technology start-ups and socio-political satire. He is currently pursuing a Bachelor's Degree in Journalism from CHRIST.

Your View Matters

  1. It is difficult to comment on whether the MDR policy will be compensating to payment firms but if it does, the payment industry can grow more.

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