airpay, MSCB partner to expand UPI across cooperative banks

By Vriti Gothi

airpay Payment Services has partnered with Maharashtra State Co-operative Bank (MSCB) to enable UPI payments across Maharashtra’s cooperative banking network, extending India’s digital payments infrastructure into rural and semi-urban economies.

The rollout spans more than 21,000 Primary Agricultural Credit Societies (PACS), 31 District Central Co-operative Banks (DCCBs), and 55 MSCB branches, effectively embedding QR-based UPI acceptance across one of the state’s most deeply entrenched financial ecosystems. With the network handling an annual business volume of $6.70 million, the transition is expected to accelerate the digitisation of transactions at scale.

Cooperative banks have long served as the primary financial interface for rural communities, particularly farmers, small traders, and members of the unorganised sector. However, their integration into India’s fast-growing digital payments ecosystem has remained uneven. By introducing UPI acceptance at no additional cost to merchants, the airpay–MSCB collaboration lowers adoption barriers and brings first-time digital users into the formal payments framework.

Strategically, the initiative aligns with regulatory and policy momentum led by the Reserve Bank of India and National Bank for Agriculture and Rural Development (NABARD), both of which have emphasised the need to modernise cooperative banking infrastructure. NABARD has previously highlighted FinTech partnerships as a critical enabler for strengthening digital capabilities in regional and rural institutions, positioning collaborations such as this as foundational to broader ecosystem development.

From a technology standpoint, the deployment of a UPI acquiring stack across village-level societies represents a shift from fragmented, cash-heavy processes to interoperable, real-time payment systems. This transition is expected to improve transparency, reduce cash handling risks, and enhance operational efficiency across the cooperative credit structure.

“We are proud to power Maharashtra’s apex cooperative bank with a UPI acquiring stack that reaches 21,214 village-level societies. Thousands of grassroots micro-merchants and unorganised retail merchants will now access a seamless digital banking experience comparable to that offered by leading private sector banks. This partnership sets a national template for how cooperative banks can modernise at speed and scale,” said Kunal Jhunjhunwala, Founder, airpay Payment Services.

“The Maharashtra State Co-operative Bank Ltd. has since 1911 consistently been the backbone of Maharashtra’s rural and agricultural economic growth through the three-tier credit cooperative structure,” said Dilip Dighe, Managing Director, Maharashtra State Co-operative Bank Ltd.

Beyond Maharashtra, the model offers a potential blueprint for similar deployments across India’s cooperative banking sector. As policymakers continue to prioritise financial inclusion and cashless transactions under national digitisation initiatives, large-scale integrations of UPI within cooperative frameworks could play a decisive role in bridging the rural-urban digital divide.