The intention of deck is to showcase the studies/findings conducted to launch a new smart POS terminal in the market – the distribution methods and pricing models. The deck assumes the smart POS terminal is already built and ready to launch.

1. Distribution Model for POS
Device

2. Agenda
The intention of deck is to showcase the studies/findings conducted to launch a
new smart POS terminal in the market – the distribution methods and pricing
models. The deck assumes the smart POS terminal is already built and ready to
launch.
Introduction to Sabpe01
Competitor Analysis03
Pricing Strategy05
Recommendation06
Market Analysis02
Distribution Strategy04

3. Problem Statement
Identify distribution strategy not restricted to forward flow of Point of Sale Terminals delivered to
merchants but should also solve for reverse logistics for damaged & tampered devices, and capability to
provide servicing. Build a cost model rather than fixed cost model. Identify how some of the app providers
can lead to effective distribution in certain segments.

4. 01
Provides a
secure open
OS for any
smart
payment
terminal
02
Can be
deployed
anywhere in
the world
03
Enables
connected
multipurpose
payment
devices from
any
manufacturers
04
Provides a digital
marketplace of
curated, vertically
bundled 3rd party
business apps
05
To be rolled out
across Tier I, II
and III cities in
India
Payment Ecosystem

5. Business Model – A multisided platform
To provide a payment ecosystem to the store owners so they feel empowered to grow their business. Payment systems are a multi-sided platform as it
needs to get engaged with banks, retailers of various sizes across geographies, developers and regulators.
Big/Medium
/Small Retailers
Consumers
• 600K million retail stores
• 1 billion GPV Targeted
• >500 shopping malls across India
• Partnerships with Banks
• Partnerships with Distributors / Agents
• Direct / Indirect Access across India
• 600 million customer base available
• Average Value 2.5 to 3K per transaction
• 2 to 3% MDR in Credit Cards
• .5% MDR for Debit Cards
• .4% MDR Wallets/UPI
Free Paid

6. Persona
• Reduce transaction charges.
• Maintains multiple software.
• Manually predict what product
is selling more.
• High cost for using latest
technologies.
PAIN POINTSJOBS TO BE DONE
Kumar
45Years
LivesinBangalore
5yearsinrunningaorganicshop,Interestedinexpandinghisbusiness.
Kumar is from Tamil Nadu and holds a
Bachelors Degree in Commerce. He has always
been passionate about setting up this own
venture and is running his organic shop.
He has invested his saving in setting up shop 5
years back and quite successfully running his
venture in his neighbourhood. He has earned a
customer base of 3000 customers thus far who
are doing regular business with him. He does
door to door delivery.
PROFILE
• Engage with customers.
• Manage inventory.
• Identify products that are sold
swiftly.
• Monitor employee engagement
• Runs a “Whatsapp” group to
promote his new products and
increase sales.
I wish I get more sales and reduce my operating cost. It is hard and
difficult to engage with the run multiple software and hardware for my
shops.

7. For store owners in need of high quality point of sale
device with one stop solution
POS provides customers with commerce ecosystem
both beautiful hardware and feature rich software for
their entire business needs and
So they feel empowered to transform and grow
business in an integrated manner
Unlike competitors who provides keypad based point of
sale machines to accept payments.
Positioning Statement

8. Market Analysis

9. PESTEL Analysis for the Industry
Political Economical Social Technology Environment Legal
Political stability leading
to steady supply chain
and sales.
Indian economy is
growing at a faster rate.
Government and Red
tape can be a big
problem.
India still has difficult
laws and restrictions on
Foreign Direct
Investments.
Payment Industry had
maintained impressive
growth.
Payment industry is
expected to be 500
billion by 2021.
Payment industry is
predicted to have
grown to 8 to 13% of
India GDP.
An increase in
disposable income will
boost consumer
confidence resulting in
increased sales.
Changing consumer
preferences are going to
have a deep impact
rural sector.
Customer wants more
personalized service.
More focus shall be on
customer engagement.
Better use of
technology to enrich
customer experience.
A number of new
technologies like AI and
cognitive intelligence
are going to change the
landscape in the coming
years.
Even cloud computing,
IoT and Distributed
intelligence are going to
have a deep impact on
the sector.
Investment needed a
lot in reducing carbon
footprint and in
renewable energy.
Driving improvement in
packaging sustainability
across the entire supply
chain will be a key
factor.
Focus should be
achieving 100%
renewable energy
usage in the long term.
Overall, the legal
scenario is quite
complex and retailers
have to be cautious
since any violation can
result in big fines.
Favourable government
and central bank policy.
Various other
regulatory policies.

10. Payment Industry Growth Analysis
Card Growth Over 5 years
Year Credit Debit
2014-15 20 554
2015-16 24 680
2016-17 29 790
2017-18 38 890
2018-19 47 925
PoS Terminal Growth
Year PoS
2014-15 1.4
2015-16 1.5
2016-17 2.4
2017-18 2.8
2018-19 3.9
UPI Transaction
Year UPI
2016-17 0
2017-18 900
2018-19 5300
2019-20 9000
PPI Transaction Growth
Year Prepaid
2014-15 400
2015-16 800
2016-17 2000
2017-18 3500
2018-19 4700
Credit Card grown at a CAGR of 18%
Debit Card grown at a CAGR of 10% PoS Terminal has grown at CAGR of 23% PPI has grown at CAGR of 64% UPI Grown from 0 to 1 at CAGR of 874%
400
500
600
700
800
900
1,000
10
20
30
40
50
2014-15 2015-16 2016-17 2017-18 2018-19
Credit Debit
0
1
2
3
4
0
1000
2000
3000
4000
5000
0
2000
4000
6000
8000
10000
In millions
In millions In millions In millions

11. Internet User, Penetration and Household Growth
Mobile Internet User Growth
Year Users in millions
2018 390
2019 421
2020 448
2021 469
2022 486
390 421 448 469 486
0
100
200
300
400
500
600
2018 2019 2020 2021 2022
Household Income Growth in Urban and Rural Areas
Internet Penetration in States %
Top 5 States with Internet Penetration
States Percentage
Delhi 69
Kerala 54
Haryana, UP & Punjab 49
Tamilnadu 47
Maharashtra, Goa 43
0
20
40
60
80

12. Market Sizing in India including Tier 1, 2 and 3.
India needs 50 lakhs POS Terminals basis RBI/Govt Directions from present 3.9 million Devices.
Description Total Market Size Percentage of
Serviceable Market
Servicable Stores
Market for Sabpe
Retail Shops 12,000,000 10% 1,200,000
Hospitality 1,000,000 10% 100,000
Entertainment 3,000,000 10% 300,000
Healthcare 1,000,000 10% 100,000
Total 17,000,000 10% @ avg 1,700,000
• Tier 1 : 10 Cities
• Tier 2 : 50+ cities
• Tier 3 : 100+ cities
Huge market growth potential due Govt’s direction to
digitize payment and make less cash society.

13. Competitor Analysis

14. Patent
and
License
Having patent/license
would help the new
entrants to gain market
share. Existing Patents
and registered
trademark would play
significant role to gain
market share.
Partnering with major
retail group like
Reliance Amazon,
Patanjali can be
leveraged to rollout
terminals quickly.
This will be interesting
challenge to bring
down the production
cost and to increase
market share.
Working with
regulators on industry
standard features will
make sure market is
easier to be accessed.
There are established
players in market
offering similar
solution so
transitioning customer
to new POS terminal
might be a challenge
but market can be
influenced partnering
with established retail
groups.
Entry Barriers
Established
Brand
Regulatory Switching
Cost
Economies of
Scale

15. SWOT Analysis
S W
TO
• Solid Government Policy and Intent
• Local Demographics
• Infrastructure Availability in tier 1, 2,3
• People Interest on Tech Trends
• Mobile Penetration
• Various Partnership
Strengths
• Technology inroads in rural areas
• Absence of infrastructure in some
rural areas
• Scalability from service provider
Weaknesses
• Huge market outside tier 1 cities
• New Technology trends
• Consumer behaviors
• Emerging markets
• Door Step Banking
• Wider Adoption in Villages
Opportunities
• Price war
• Continuous Engagement
• Dense Competition
• Entry of Major Retail Houses
• Wider acceptance of cash
Threats
SWOT
Analysis

16. Competitors landscape in India
POS Terminal Provider Payment Service Provider

17. Competitors Feature Analysis
Features Payment Mswipe Ingenico Pine Labs Paytm Innoviti
Android OS
Smart Terminal
Support any
device
Tax
Management
Connect with
Customers
Employee
Engagement
Customer
Support
No Of Terminals
400,000 - 100,000 80,000 80,000

18. Distribution Strategy

19. Initial Distribution Approaches
Direct
Merchant
• Should go to the
merchants
directly with
their offering
• Big merchant
may need
customize
solution
Acquirer Tie-
up
• Should have tie-
up with multiple
acquirers such
as HDFC, ICICI,
AXIS, SBI Banks.
Together these 4
banks hold 80%
market share
Reseller
• This model can
be used if
provides a white
label solution.
• Resellers will
help to reach to
grow faster with
their reach
Partnership
with ECR
Vendors
• Should have
partnership with
ECR Vendors like
Oracle-Micros,
NCR
• Partnership will
help to get ECR
Vendors
merchants
onboard
Partner with
Field Engineer
• Will have to
partner with
companies who
perform field
engineering jobs
Partner with
Online
Distribution
• By partnering
with online
distribution
sales companies
or agents, POS
terminals can be
distributed

20. Distribution Approaches
Direct
Company .com
Contact Centre
Sales Team
Mobile App
In-Direct
Resellers
Engineer/Developer
Acquirer Tie-up
Agents
Hybrid
o Importance of
experience
o Price
o Emotions
o Market Dynamics
o Capital
Promotions
Prices
Product
Distribution Types Distribution Options Decision Criteria
o Brand
o Conflict
o Challenge in Price
o Growth Needs
o Market Access
o Service Needs
o Brand
o Conflict
o Revenue
o Captial
Places
Revenue ModelsPOS Terminal
Mix of Options
Affiliate
Broker
Co-Creation
Open Source
Razor Blade
Asset Sale
Usage
Subscription
Renting
Marketing
Word of Mouth
Social and PR
Website
Mobile App
Content
Organic Search
Digital
Traditional Media
Direct Marketing
Event
Distributor

21. Distribution Flow
POS POS POSPOS POS
Reseller Distributor Distributor
Direct Channel Reseller Acquirer Bank Agents
Retailer RetailerRetailer Retailer Retailer
Field Engineer
Field Engineer
Transportation
Company
Transportation
Company
Transportation
Company
Transportation
Company
Transportation
Company
Transportation
Company
Acquirer
Banks
Agents
Transportation
Company
POS
Service
Contractors
Service Engineer
Retailer
Transportation
Company
Forward Movement
Reverse Move
Anytamperedormalfunctioningdevicetobereplaced

22. Distribution Approaches
1. Distribute POS terminal to Retail Stores or groups directly
2. Provide Amazon delivery agents with POS to accept payment.
3. Partner with HDFC to distribute terminal for it merchant acquiring.
4. Partnering with Xiomi in their retail expansion and distribute POS
across their stores
5. Distribute POS to agents working for insurance companies with pan
India presence such as LIC Insurance, SBI and ICICI with 1.2 million
agents it could be a best channel to capture market share of 3-5% .
6. Distribute POS device to pharmacies stores such as StayHappi or
Apollo, NedMeds who are planning to open 15000 stores
7. Become a single source partner with Rupay Scheme to support the
market penetration
8. Distribute POS device as MicroATM services
9. Partner with ECR vendor
• Immediate (3-9 months)
• Immediate (3-9 months)
• Immediate (3-9 months)
• Near Future (9-12 months)
• Long Term (12-36 months)
• Long Term (12-36 months)
• Medium Term (9-12 months)
• Medium Term (9-12 months)
• Long Term (12-36 months)
Distribution Ways Timelines

23. Potential Distribution Partner Assessment
4. Geographic Alignment
Potential Channel Partner Target Companies Assessment
3. Customer Experience
2. Market Leadership
5. Partner Value-add
1. Size / Scale High
Future Group Amazon HUL Redington IngramMicro
High High High High
High High High High High
High High High Medium Medium
High Low High High High
High Medium High High High
Distributor DistributorPartner Hybrid
Partner/Retailer
Retailer
Sales Team
Owned
Low
Medium
High
Low
High
Dunzo/Pickrr
Partnership /
Outsource
Low
Low
Medium
High
Medium
Wipro
Hybrid
Dev/Resell
High
Medium
Medium
High
Medium
Partner Names
Type

24. Pricing Strategy

25. Bowman’s Strategy Clock
Low price and Low
Added Value
1
8
2
3
4
5
6
7
Free/Razor Blade
(Option)
Hybrid
A. Device Cost/Rent
B. Transaction
Processing Charges
C. Premium Feature
Charges
I. Connect with
your
customers
II. Visibility from
wherever you
are
III. Employee
Management
IV. Hassle free
accounting
V. Poynt HQ
Low
Price
Differentiation
Focused
Differentiation
Risky High Margin
Monopoly Pricing
Loss Of Market Share
Price
Low
High
PerceivedValueToTheCustomer
Low
High
3Months
Trial
A, B, C(Trial)
A, B, C (2 Features)
A, B, C (All Services)
Silver
Package
< 3 POS
Terminals
>= 3 POS
Terminals
Bronze Package
Gold
Package
Bronze (Device Only)
<2 months
Trail Period

26. Various Fees
 Setup Fee
 Installation Fee
 High Risk Merchant Escrow Fee
 Refund Fee
 Chargeback Fee
 Service Fee
 Transaction Fee

27. Sample Distributor Margins across segments
Product category Distributor Retailer
Fast moving consumer goods 3-10% 8-40%
Clothing and apparel 15-30% 20-50%
Electronics like mobile phones 3-7% 3-7%
Cars 5-15%
Furniture 30-50%
Jewelry 30-60%
Electrical equipment and lights 5-7% 15-25%

28. Pricing Strategies
 Device Cost/Rent
Device Cost : 30,000 (this cost includes all expense like insurance, transportation, tax etc with margin)
Interest on capital : 9000 (10% yearly for 3 years)
Device rent/month for 5 years = 39000/60 = 650
 Maintenance/Service Cost
Annual maintenance cost is to provide maintenances service in case of device break down
As per industry it is approx. Rs. 100/- per month for each device
It can be included in monthly rental or charge annually.
 Installation Cost
As per industry it is approx. Rs. 700/- as one charge time.

29. Pricing Strategies
 Transaction Processing Charges
• Monthly Fixed Charges
Avg transaction charges = (Expense to maintain GW)/No of transaction
Avg transaction per terminal = Total Transaction/No of terminal
Fixed transaction charges per terminal = (Avg transaction Charges) * (Avg Transaction per terminal)
= 0.5 * 500 = 250
• Per Transaction Charges
Transaction processing charges for one transcaiton = 0.5
Transaction charges for 1000 transaction = 0.5 * 1000 = 500
* Acquirer will charge directly to merchant for their charges
 Additional Service Charges
• Rs. 1 per day for each device for 1 service
• Bundle in gold and silver group

30. Pricing – each device
Gold Silver Bronze
Rent/month 1400 1150 1000
Premium Service All service Any 2 services No Additional
service
Payment Support Yes Yes Yes
• Rent for one device for a month
• Rent incudes device rent, maintenance charges and fixed transaction processing charges
• Acquirer will directly charge to merchant for acquirer related charges for transaction
• Bronze/Silver package can use other services with each service charges (Ex: Rs 1/day)

31. Pricing - package
Package
Features
Gold Silver Bronze
Package price*/month 11800 5500 2800
No of Device >=9 >=5 >=3
Value Service All service Any 2 service No additional
service
Payment Support Yes Yes Yes
• This is minimum charges for the package. Charges will depend on no of devices
• Acquirer will directly charge to merchant for acquirer related charges for transaction
• Bronze/Silver package can use other services with each service charges (Ex: Rs 1/day)

32. Pricing Strategies
Free/Razor
Premium
High Low
Value Price
Pricing Approach Market Conditions
Premium Strong brand, design,
performance and quality allowing
for demanding higher prices than
competition
Additional Service Charges Economic Value for customer
based on service offering
Device Cost/Rent Demanding the actual price over a
period of time
Transaction Cost Tied up with future sales
opportunities.
Free Market penetration approach.

33. Marketing Channels
 Social Media Marketing
 Facebook
 Twitter
 LinkedIn
 Youtube
 Google Ads
 Affiliate Websites
 Offline Media
 Newspaper
 Pamphlets

34. Recommendation

35. Go To Market Road Map
Activities H1 2020 H2 2020 H1 2021
Ecosystem Readiness
Identifying Initial Customers
Get regulatory approval
Build Marketing Channels
Develop Distribution channels
Determine Price Strategy
Onboard Partners and Contracts
Marketing and Advertisements
Pilot Implementation
Implement Distribution Plan
On Board Customers
Business as Usual

36. Key Metrics
 Customer Acquisition Cost @ Rs. 800 approx.
 Churn Rate @ 10% (Customer stays for 3-4 years)
 Customer Lifetime Value varies as per retailers.
 Qualified Leads.
 Monthly Recurring Revenue.
 No of Trails Signed up.

37. Primary Research – Customer Interviews
Customer Pains Will Customer migrate to new POS Recommendation
• Around 90% merchant raised
concerned for time taken to credit
the payment to their account
• Around 40% raised concerned about
high transaction cost
• Poor Network Connectivity in
another issue
• Failure to charge the POS terminals
while taking the POS to merchant
locations
• Merchants have concern for
switching & migration cost to new
system
• Around 50% merchant showed
interest to new software services
offered
• All merchants want to see the demo
how these new services works
• Merchants wants to know about the
ease of use of the core and premium
apps
• Every merchant raised effectiveness
and price factor for these services
• New POS devices should help
merchant to migrate to their system
• POS should create training material
or arrange training session for
merchant staff
• It will be good if POS can help
merchant to credit money faster to
their account
• Price should be in same range as the
current price
• Offer the software features for free
for initial 3 months to attract
merchant

38. Recommendation
For Distribution Strategy
For Pricing Strategy
Near Term Long Term
 Start with Tier 1 cities
 Partner with Major retail group stores for
quick wins.
 Partner with Dunzo/Pickrr to distribute
devices and reserve logistics.
 Move to Tier 2 then Tier 3 so on
 Identify retail partners with pan India
presence
 Distribute Terminals through traditional ways
 Appoint Agents and App Developers to
distribute devices.
Near Term Long Term
 Match competitors pricing strategy
 Blended pricing approach
 Value add services and transaction charges to
be combined.
 Pricing varies for each channel on
distributor’s margins.
 Strategize for pricing for Tier 2 then Tier 3
 Charge premium pricing

39. Thank you!!!