How this fintech firm is enabling banks to achieve financial inclusion

Around 70 percent of India’s population belongs to rural India. Without economic inclusion of people living in rural areas, it will be difficult for India to grow. Fintech player, XPay.Life offers multiple financial services in rural regions with an aim to make life easier in partnership with District Central Cooperative Banks (DCCB), Regional Rural Banks (RRB) and several other such entities.

Through its technological innovation, XPay.Life helps these banks realize the goal of financial inclusion, which is at the top of the government’s agenda. Speaking to Bizz Buzz, founder and CEO of Bangalore-based XPay.Life, Rohit Kumar said that the company also provides various software products and solutions to banks for rapid digitization. From touchscreen-based kiosks to mobile vans, the company offers all payment and financial inclusion-related solutions to realize this goal. The bootstrapped firm is currently looking to raise funds to continue its next level of growth. About the plans for the next few years, he said that the company will quickly scale up. The fintech firm has already achieved profitability in a short period of time and said that profitability is at the core of each of its businesses. The fintech firm is in the process of raising funds, which is likely to happen by the end of this year.

Can you shed some light on XPay.Life’s operational aspects?

We mainly focus on three verticals. The first is about bill payments and charging. Below this we have our own Android app and iOS app. How we are different from other players apart from app is that we offer full spectrum invoice payment solution. There we have a PoS device, an Android-based PoS device and a kiosk with a touch screen. Our mobile van product is also very popular which now operates 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), about 65 percent of all transactions in urban India are digital. Nevertheless, 35 percent of transactions take place in offline mode. So we also automate these manual counters. However, our focus is on rural India and we have covered 1.5 lakh villages till date where we supply these PoS devices to our merchants or partners. The touch screen kiosk has a cash acceptor and validator. So the consumer who does not have access to UPI (Unified Payments Interface) or smartphone can transact through touch screen kiosks.

Can you shed light on XPay.Life’s initiatives to ensure financial inclusion?

Financial inclusion falls under our second vertical. We work closely with NABARD, District Cooperative Banks (DCCBs) and RRBs (Regional Rural Banks). At present, we cooperate with around 370-400 district cooperative banks and 43 RRBs. As of now we have covered 15 states where our mobile vans are operated through DCCBs for which these banks receive grants from NABARD for financial inclusion, to reach the customer’s doorstep and to carry out all other financial transactions. These are basically banks on wheels where there is a small office, and it is powered by solar energy. All 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 payment.

You also work as a technical service provider for these regional national and district cooperative banks. Please provide us with the operational specifications of these services.

We focus on district cooperative banks and RRBs in the districts. These banks usually do not have large IT teams. Technically, they need support to compete with other banks. We help with the automation of existing products and services. We help to get 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. Financial competence is also imparted within the van. The van is an income-generating model for them. All banks generate revenue from these mobile vans. This also helps with 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). Work has started in Karnataka. Here we offer services such as platform as a service or infrastructure as a service or software as a service. We are also working on two additional verticals.

In terms of consumer base, we have a very good consumer base. Our system is very stable. Given the initiatives taken by the government, digitization of these RRBs, PACS (primary agriculture credit societies) and DCCBs is our aim. In terms of reach, 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. Overall, we have a good presence in 15 regions.

Reserve Bank of India has already launched UPI123Pay to facilitate 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 that complementing our growth because smartphone penetration is less in rural India. That’s where it’s going to help us. There are DCCBs that have even celebrated 100 years of establishment. The entire focus of the Indian government is on rural India. It is so, we have seen and we have tested it too. It’s going to help our growth. We not only help our customers to move their transactions to digital mode but we also help them to do so. For this we are working very closely with NABARD for financial inclusion.

Are you profitable as a unit? Can you give some views on the mode of monetization from all these operations?

Yes, we are profitable. In the financial year ended March 2022, we became profitable with a turnover of over Rs 10 crore. Our income is definitely transactional. But this is insignificant because our current focus is on customer acquisition. There are many IT solutions and grants and subsidies given to DCCBs for each and every activity. Deploying our solutions in these banks gives us income. Our parent company is the largest kiosk supplier of touch screens. We have developed all solutions internally with patents on some of these. Regardless of the services we provide, I would say that our main 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 number one in this area. We grow our business by 2X-3X every year. I think next year we hope to be one of the unicorns. We’re bootstrapped so far. We are looking at raising funds. It will be a Series A financing round. We are looking to raise a large round. We are in the final phase of fundraising. Hopefully we will close it by this year. The company has reached the level where we can scale it up by 10 times in the coming years.