Digital payment still a far cry for many rural people

UPI (Unified Payment Interface) has revolutionised the digital payment space in India. Post pandemic, the adoption has been rising each passing day. However, there are many people in rural and urban areas, who don’t have access to the payment platform because of lack of smart phones or lack of knowledge on how to operate. Companies like Ezeepay, leveraging their technology platform, are enabling those people in both rural and urban areas to conduct a host of financial transactions like sending money to other people, doing mobile recharge, buying an insurance product, and many others. In a conversation with the Bizz Buzz, Mushraaf Hussain, Chief Operating Officer of Ezeepay said that the company is currently reaching customers across 22 States in the country through its agents. With a monthly transaction of around Rs 1,400 crore, the company is facilitating financial inclusion in rural areas of India. He said that the company plans to increase its agent count and will expand its business in southern states of the country during the next financial year.

What are your views on the various digital payment initiatives taken up by successive governments in recent years?

Huge growth has been seen in recent years with regard to digital payment. Earlier, people used to be sceptical about using digital mode of payment. After the steps taken up with regard to digital payment, we have seen volume doubling in recent years. Especially, digital payment in rural India has grown manifold post the Covid pandemic. In rural India, trust deficit with regard to digital payment still exists. People had fears that scams of frauds may happen by using this channel. However, with the advent of many digital payment platforms like Paytm, PhonePe and others, which have worked on the ground level, trust is being established slowly. Now, they feel that digital payment is safe.

Can you give us an overview of the Ezeepay’s operations? How do you able to manage such a diverse set of financial services under one roof and what is the major focus area?

Our major focus is on AePS (Aadhaar-enabled payment system). Through this payment mode, people in rural areas are able to do financial transactions. Banks don’t have the reach in many rural areas of the country as those are mostly located in urban or semi-urban areas. Villagers have to travel 10-15 kms for withdrawing money. So, our AePS empowers people living in rural areas to withdraw money. We draw the maximum volume from the AePS. Our monthly transaction volume stands somewhere between Rs 700 crore-Rs 800 crore per month from AePS. Overall, our transactions from all our services stands at around Rs 1,200 crore-Rs 1,400 crore per month. Domestic Money Transfer (DMT) is the second biggest area for us. For transferring money to other accounts, DMT is used. As people don’t have access to net banking and even various digital payment platforms, people in both rural and urban areas go to our nearby agent and transfer money through our portal. We provide all kinds of banking services through our platform. We also provide various e-governance services PAN card, ITR, GST registration, and MSME registration. Through our platform, we also provide utility services like mobile and DTH recharge, and OTT recharge among others. We provide these services through our tie-up with Bharat Bill Payment. Also, various kinds of insurance products like health, motor, shop, & device insurance. Our products are best-suited for rural India taking into account the purchasing power. We also operate as an intermediary for providing loan and investment related services.

So, do you receive commission per transaction? Can you throw some light on the aspect of operations across the states?

That’s right. We get commission from the bank per transaction. The margin is very low. We also distribute that commission with our agents and distributors. Currently, we operate in around 22 states. Though we have presence in the southern states, we have kept the agent onboarding on hold for now. As far as agents are concerned, we have around 5 lakh agents as of now. Each day, around 3-3.5 lakh agents are active on our platform. We reach around 70 lakh customers every day. In the next financial year starting April, we will again expand our operations in southern states.

There is intense competition in the space in which Ezeepay operates, be it payment or insurance products. How do you view the competition and what are your key differentiators?

Though there are multiple players providing payment solutions or insurance products, many people in rural areas are not able to use those services. For instance, an individual not having a smart phone will not be able to operate payment platforms (like PhonePe or Paytm). There are also many people who don’t know how to operate the phone for doing that digital transaction. While in tier-I and II cities, usage of payment platform is more, that is not the case beyond these cities. Another differentiating factor is that all digital platforms operate in the B2B (business to business) segment but we operate in B2C (business to consumer) segment. We work with those people who don’t know how to send money or how to do that particular digital transaction. Even adoption of UPI123 Pay, which is aimed at facilitating digital payment in feature phones, will take some time.

What are your plans going ahead in terms expanding the reach of Ezeepay?

We are now onboarding the Kirana shops and our major focus is on this segment. We are onboarding new Kirana shops to expand our services. For the next financial year, our target is to reach at monthly transaction of around Rs 2,000 crore. We also eye to expand our agent reach in the next financial year. We have also onboarded noted actor Jimmy Shergill as our brand ambassador and launched the commercials. We hope that this branding effort will give us a lot of impetus in the next fiscal year. We will also add new services in rural areas.

What is the total headcount of the company? What are the key challenges that the company may face going ahead?

We are around 300 people strong team, comprising technology, sales and operations among others. All our engineering work is inhouse, which is handled by our team. As far as data security is concerned, we have taken a lot of initiatives to secure all the data, we handle. As we handle a lot of customer data, we take utmost care in this regard. We are a profitable business and all our investment are taken care through our internal accruals. So, we are not looking at raising capital. As a B2B business, the marketing spend is less and there is less cost of customer acquisition. As far as key challenges are concerned, we have to be vigilant on the aspect of data security. Also, providing customised services to users with proper customer services will be our priority.