Anand Kumar Bajaj, Founder and CEO, PayNearby, shares how their company is empowering kirana stores
Share a brief about the business you are in and the market that you have seen in last 4 years?PayNearby is the flagship brand of Nearby Technologies that operates on a B2B2C business model. Ours is an assisted hyperlocal fintech network that was set up to provide the last mile access of basic financial services to the unbanked and the under-banked. We empower retailers at the first mile to offer digital services to local communities, thereby boosting financial inclusion in India.
With more than 8,50,000 retailers comprising approximately 17,200 PIN codes across India, PayNearby today owns the country’s largest hyperlocal fintech network and services close to 10 crore Indians on a range of products and services. With a monthly throughput of ~4500 crores and clocking 10 lakh plus transactions on a daily basis, PayNearby today stands tall as the largest agent banking platform in the entire Southeast Asia region.
PayNearby is leading the segment with Aadhaar enabled Payment System (AePS), or Aadhaar banking with a 33% market share, which facilitates cash withdrawal, and balance inquiry through customer’s Aadhaar number and fingerprint authentication. Applying the mantra of “Automate or Eliminate”, PayNearby has automated every functionality, which has helped the company scale and handles large volumetric data. During the nation-wide Covid-19 lockdown, PayNearby through its network of banking correspondents it has been seamlessly facilitating cash withdrawal and transfer – conducting over 7-8 lakh transactions per day. This has been enabling the hardest hit especially the migrants and the rural population to access the Government’s DBT disbursements seamlessly.
With its well-entrenched network across the country, PayNearby has successfully enabled the availability of essential services in the most backward districts of the country. Today, PayNearby has its presence in the very hinterlands of India – from Muzaffarpur to Maldah, and Raichur to Rajnandgaon. The work done by the company has enabled financial inclusion worth INR 775 crores to the consumers in 115 backward aspirational districts, identified by NITI AYOG.
When you look at traditional retail stores they are very conservative in terms of adoption of technology. They are reluctant to adopt new things because they have a different business model. What kind of challenges did you face?
The small kirana store in the neighborhood has been an integral part of every Indian as it has been for the Indian economy. But with the rise of e-commerce and global retail giants eyeing the Indian market, there was a dire need to equip local retailers with the skills to perform digital transactions. At PayNearby we aimed to create a formidable combination of technology and last-mile connectivity by empowering India’s most trusted retail outlet – the local kirana.
We have therefore been working at the granular level creating awareness and educating them while also imparting the necessary knowledge and skills for making them digitally empowered. At PayNearby, we educate the retailers about the power of digitization and convenience of digital payments and operations, without the need for any additional investment. Besides digital empowerment, improving user experience and the interface is very critical. We have been offering our retailers with regular training programs which are offered to them. The training modules are also offered in every local language to our partners which further enables seamless consumption.
Additionally we have also partnered with renowned training partners – TRRAIN and RASCI. Besides e-learning videos, the partnership will offer a slew of skilling and knowledge-building courses, including financial and insurance planning and career guidance to our retailers. At PayNearby, training and awareness is an ongoing program that is helping our retail partners to evolve into micro-entrepreneurs who can navigate the financial and digital landscape of retailing seamlessly.
How do you see kirana stores changing post-Covid-19? How are you empowering them during this pandemic?
The lockdown period has served as a testament to the true resilient power of the humble kirana store. Where large e-commerce giants were unable to supply and home deliver goods to people, Indian kiranas emerged as the true corona warriors. Our Digital Pradhans selflessly committed to their national duty came to the aid of many in these challenging times including the banking sector which needed DBT disbursement support.
The nation-wide lockdown in the wake of Covid-19, predictably, hit the poorest sections of society the hardest, especially migrant workers and the rural population. However through bank Mitras and Aadhaar Banking, PayNearby offered customers cash withdrawals of up to Rs. 10,000 daily simply through the use of their thumb. We thus facilitated seamlessly cash withdrawals and transfers through the period – conducting over 7-8 lakh transactions per day.
From simple ‘brick and mortar’ stores they are gradually evolving into a hub for experimental research and development. We are also championing the cause for our banking correspondents’ sustenance during this time. We aim to adopt an omnichannel approach where the kirana stores are not only managing their customers efficiently but also have equipped themselves to reduce operational costs, inventory management, onboard new customers, while offering financial services seamlessly. We see the Indian kirana store to play the role of a catalyst in driving financial inclusion while transforming India’s socio-economic landscape.
What according to you are the biggest challenges for the retailers in India, especially the post-Covid-19 era?
The unorganized retail market indirectly generates livelihoods for more than 20 crore people and thus it is crucial that this segment espouses digital literacy facilitating ease of transactions. However with the rise of e-commerce and global retail giants eyeing the Indian market, there is a dire need to empower them by upscaling their digital and customer servicing skills. This hyper-localization, therefore, needs to be supported with training and upskilling programs for retailers to ensure that they thrive in the consumption market against the disruption provided by online aggregators.
Secondly, to be indispensable to the consumer, the local retailer must constantly evolve to accommodate the consumer’s changing needs. Kirana shops are unlikely to grow beyond a point and invest in shelf space unless they are enabled with the expertise to draw insights based on consumer interactions for e.g. if a kirana store is offering money transfer, venturing into a new vertical such as insurance will only be possible if he is armed with the infrastructure and adeptness to gauge demand. This ensures that the retailers transform the shop beyond a mom-and-pop store and become a one-stop solution for an assortment of needs.
What’re your biggest learnings in the Covid-19 period?
One of the greatest observations made during this period was how the government initiative to facilitate a more digitally inclusive economy has served as a foundation for the current period. Our financial services strategy to unbanked and underbanked helped us being extremely relevant. Where companies were facing challenges of failed transactions, we were strongly backed by technology and our systems have been running up and strong without any disruption.
We are proud of the fact that PayNearby’s services were called in for national duty of relaying government grants to millions of citizens through our Business Correspondents channel. This accentuates the credibility of our work and we hope to raise our service standards and emerge as a national asset.
What are the products that you are offering to the retail stores?
We have carefully analyzed the needs of consumers and identified a list of offerings we wanted to supply through assisted tech, thereby boosting financial inclusion at the last mile. At PayNearby, we offer a bouquet of services including Aadhaar banking, domestic money remittances, Micro ATM, bill payments, mobile/DTH recharges, granular investment, and insurance among others. Similarly, we also offer various solutions on the enterprise side – CashNearby, SalaryNearby, CollectNearby.
CashNearby – here organizations utilize the vast network of PayNearby retailers across the nation to disburse cash to its on-field employees. SalaryNearby – It allows enterprises with remote working locations to digitally pay salaries in the bank accounts of their workers/employees while ensuring compliance for identification and age regulations. With CollectNearby – NBFCs or Insurance companies can enable their customers to deposit their EMIs or premiums at their nearby retailers. At PayNearby we are developing a one-stop-shop model to ensure all individuals and organizations are able to access financial services within their targeted catchment locality, and are assisted towards a less-cash economy.
How far has PayNearby grown in India? What are your expansion plans?
Our agile and judicious use of technology has allowed us to grow our business in a short amount of time. We have built our network PAN India spreading over 17,200 PIN codes. Currently, the company is well-positioned to meet its aggressive goals to ramp up and extend assisted hyperlocal services in the county – and upgrade its network from 8,50,000 retailers to 50,00,000 retailers in the near future.
We have plans to foray into international markets and are actively evaluating Sri Lanka, Bangladesh, and South Asia markets for future expansion. The level of digitization in this region is similar and very high, alongside, the state of banking which remains similarly low. In addition to this, we have witnessed a large number of job losses among migrant laborers. With our new initiative ‘JobsNearby’, we hope to ensure that these workers and their families are not left bereft and can regain their dignity and livelihood. Through our database, we hope to provide these workers with an opportunity to rebuild their lives, without having to compromise on their skills. The rich data analytics that we have of our retail partners are valuable inputs which will also help us to risk score and offer customized lending solutions to our retail partners and customers shortly.
We are well-positioned to move to version 2.0 with multiple verticals and brands, including TravelNearby and InsureNearby.
Empowering retail stores is really necessary these days but at the end of the day you have to make money. How do you make money?
PayNearby is a B2B2C company and offers various financial and non-financial services to the masses across the country. We have commercial arrangements with the service providers whereby we earn a small percentage on successful transactions. PayNearby runs on positive unit economics. While scaling up, we have ensured that the business fundamentals are maintained for us to sustain and grow the business.
How can PayNearby increase digital spending in rural areas of India?
PayNearby offers financial products and services which are required for the masses in India. The focus is primarily to provide services at the interiors and to the lower strata of rural India, which constitutes 93%. With the help of Data Analytics, we can analyze demand and supply of various products at respective locations, for instance, the DBT disbursal, insurance in Red Zones, etc. We are offering financial training programs with our retail partners better known as ‘Digital Pradhans’, which will help create awareness about various financial products that are beneficial for rural audiences. For e.g. Insurance consumption in India is a mere 4 percent, and a major chunk of it comes from Urban India. There are already various insurance products that are customized for the audience of the lower pyramid. PayNearby will help deliver such kind of products to rural masses. The same is the case if e-commerce and online education. Our network will help e-Commerce companies to reach the interiors of India.
Where would you see the digital spending market of India in the next 5 years and how would PayNearby contribute to this journey?
The world’s largest and the most stringent lockdown in action, home quarantining more than 1.3 billion has interestingly brought about a huge surge in everything ‘digital’. With a huge influx of new users, digital payments, OTT, online gaming, e-commerce, and e-learning among others have been soaring. There has been a drastic behavioural and lifestyle shift among the masses. On the positive side, people are now more adaptable to anything digital. From payments to learning to stream, online has captured the imagination of every Indian like never before. Going forward we expect this trend to grow further.
Similarly, in rural India too we believe a lot of things will change fuelling a rise in spending patterns. The government’s measures towards MSMEs will help retain the jobs in rural regions and also encourage newer businesses to erupt thereby eventually boosting the consumption patterns across the country.
With the potential to be the pulsating nerve center of the locality it is situated in, kiranas can offer a customized experience at a much higher scale, creating sustainable economies and societies. PayNearby’s vast and robust network can surely play a major role in facilitating this paradigm shift by bringing technology to the last mile.