How this fintech firm enabling banks to achieve financial inclusion

Around 70 per cent of India's population belongs to rural India. Without financial inclusion of people living in rural areas, it will be difficult for India to grow. Fintech player, XPay.Life is providing several financial services in rural regions with an aim to make lives simpler in collaboration with district central cooperative banks (DCCBs), regional rural banks (RRBs) and several other such entities.

Through its technological innovation, XPay.Life is assisting these banks to realise the objective of financial inclusion, which sits at the top of the government's agenda. In a conversation with the Bizz Buzz, Founder and CEO of Bangalore-based XPay.Life, Rohit Kumar said the company is also providing various software products and solutions to banks for digitalising fast. From touch screen-based kiosks to mobile vans, the company provides all payment, and financial inclusion-related solutions to realise this objective. The bootstrapped firm is currently looking at raising funds in order to pursue its next level of growth. About plans in coming years, he said that the company will rapidly scale up. The fintech firm has already achieved profitability in a short span of time and said that profitability sits at the core of each of its operations. The fintech firm is at the process of raising funds which is likely to happen by end of this year.

Can you throw some light on XPay.Life's operational aspects?

We are majorly focussing on three verticals. The first one is into bill payments and recharge. Under this, we have our own android app, and iOS app. How we are different from other players apart from app is that we provide full spectrum bill payment solution. There we have PoS (point of sales) device, android-based PoS device, and touch-screen kiosk. Our mobile van product is also very popular which is now running in 15 States. Through our products such as PoS, kiosk and mobile van, we focus on rural India. According to NPCI (National Payments Corporation of India), around 65 per cent of all transactions in urban India are digital. Still, 35 per cent of the transactions are happening on offline mode. So, we are automating these manual counters also. However, our focus is on rural India and we have covered 1.5 lakh villages till date, where we provide these PoS devices to merchants or our partners. The touch screen kiosk has a cash acceptor and validator. So, the consumer who doesn't have access to UPI (Unified Payments Interface) or smartphone, can do transactions through touch-screen kiosks.

Can you throw some light on XPay.Life's initiatives for ensuring financial inclusion?

Financial inclusion comes under our second vertical. We work closely with NABARD, district cooperative banks (DCCBs) and RRBs (regional rural banks). Currently, we work with around 370-400 district cooperative banks and 43 RRBs. As of now, we have covered 15 States in which our mobile vans being operated through DCCBs for which these banks receive grant from NABARD for financial inclusion, reaching customer's doorstep and for doing all other financial transactions. These are basically bank on wheels in which there is a small office, and it is powered by solar energy. All the banking activities like account opening along with bill payment activities also happen at the village level. We also have Aadhar-enabled payment system and all modes of payments.

You also work as a technical service provider to these regional rural and district co-operative banks. Please give us the operational specifics of these services.

We focus on district cooperative banks and RRBs in rural areas. These banks usually don't have big IT teams. Technically, they need support for competing with other banks. We help in automation of existing products and services. We help in getting IMPS, UPI or any of the financial inclusion-related services to these banks. We help these banks to raise awareness among customers. Through our mobile van, customers can withdraw money. Within the van, financial literacy is also imparted. The van is a revenue-generating model for them. All banks generate revenue from these mobile vans. Also, this helps in branding of the banks. We have observed many success stories coming from these vans.

Currently, we have also started working with SHGs (self-help groups). The work has started in Karnataka. Here, we provide services like platform as a service or infrastructure as a service or software as a service. We are also working on two more verticals.

As far as consumer base is concerned, we have a very good consumer base. Our system is very stable. Given the initiatives taken up by the government, digitalisation of these RRBs, PACS (primary agricultural credit society), and DCCBs is our objective. As far as reach is concerned, we work with almost all DCCBs in Karnataka. Similarly, our reach is very strong in Tamil Nadu. Andhra Pradesh, Jharkhand, Bihar, Uttar Pradesh, Madhya Pradesh, Maharashtra, apart from other States. Totally we have good presence in 15 regions.

The Reserve Bank of India has already launched UPI123Pay for facilitating digital transactions in feature phones. Do you see this step complementing your growth or will it emerge as a competitor to your service offerings?

We see it complementing our growth, because smart phone penetration is less in rural India. There, it is going to help us. There are DCCBs which have celebrated even 100 years of their establishment. Entire focus of Indian government is on rural India. That is how, we have seen, and we have tested it also. It is going to help our growth. We are not only help our customers move the transactions to digital mode, but also handhold them to do that. For this, we are working very closely with NABARD for financial inclusion.

Are you profitable as an entity? Can you give some views on the mode of revenue generations from all these operations?

Yes, we are profitable. In the financial year ended March 2022, we became profitable with a turnover of more than Rs 10 crore. Our income is definitely transaction-based. But, this is negligible because our current focus is on customer acquisition. There are many IT solutions and grants and subsidies provided to DCCBs for each and every activity. Deployment of our solutions in these banks gives us revenue. Our parent company is the largest touch screen kiosk provider. We have developed all solutions inhouse with patents on some of these ones. Whatever services we provide, I want to say that our major focus is on profitability.

Where do you see your company in the next three years?

Please share your plans for the coming years.

We aim to be the number one player in this space. We are growing our business at 2X-3X each year. I think, by next year, we hope to be one of the unicorns. We are bootstrapped so far. We are looking at raising funds. It will be series-A round of funding. We are looking at raising a big round. We are at final stage of fund raising. Hopefully, we will close it by this year. The company has achieved the level where we can scale it up by 10 times in coming years.