Uni: Acquiring Low-risk Customers

Uniorbit Technologies Pvt. Ltd. (Uni) is an upcoming fintech that combines the benefits of prepaid/credit cards with Pay Later features. UNI Cards is in partnership with RBL Bank, State Bank of Mauritius (SBM Bank), and provides customers with a pre-paid card (backed by the Visa network) that can be used to make payments. The key differentiator with traditional cards is the Pay Later feature, where the repayments can split the spend into three monthly installments at zero cost. 

Uni typically acquires low-risk customers. It offers a prepaid card with a credit limit of up to Rs.0.6m where the customer can convert their monthly spend into two/three months’ interest-free EMI. The customers are geographically diversified and the average age of the customers would be in the mid-30s. A typical customer would be in the Rs.300k-0.3mn income bracket, either prime/super-prime as per bureau score who would face the occasional cash flow mismatch and use the pay later product to tide over it. Digital sourcing results in $ 20 in customer acquisition costs (including overhead costs) compared to $ 40-45 through traditional channels.

The company’s core proposition is to provide repayment flexibility. Through deeper customer segmentation, identification of specific needs, and providing solutions for these, it aims to ensure that even well-carded customers find a use-case for its cards. It is looking to launch a co-branded credit card, Uni Store, and has applied for an NBFC license to widen its product base.

It offers a pay later card issued by RBL Bank/ State Bank of Mauritius as the issuing partner, and LendingBox / Northern Arc /Liquid Loans as lending partners, while Uni brings technology and product innovation. The underwriting risk lies solely with the lending partner. Uni earns interchange fees and any carry-forward fees (3-5% of the amount rolled over). Expanding lender
partnerships will allow it to serve customers with different risk profiles.

Currently, Uni provides a digital platform and takes operational risks. The fees earned from the interchange fees (on spend) are shared with the card-issuing partner while the credit risk is borne by the lending partner. However, the aim is to build an ecosystem that can leverage high customer engagement (9 sessions per month currently) by cross-selling financial and
non-financial products. This means that while the core product RoA would be lower than
that of credit cards, the operating leverage created by cross-selling other products will
improve overall business profitability over time.