Boost in digital payments is a silver lining in this gloom: Sarvatra Tech CEO

By Priyanka Pani

In the first of our “Pandemic Survivals” series we interviewed Indian FinTech supplier Sarvatra Technologies to understand what differently the company did to cope up with the crisis created by the COVID-19. IBS Intelligence spoke with its founder Mandar Agashe. 

Edited Excerpts:

The pandemic has indeed caused major disruption, threatening the survival of many companies across various sectors. Fortunately for us, the fintech industry segment we operate in (switching and payments services) hasn’t been adversely affected, as fintech was classified as “essential services” right at the onset of the first lockdown. On the other hand, the pandemic has boosted the fintech sector by encouraging people to shift to digital payments in a much bigger way than demonetization did, as people want to use contactless, remote and online digital payments to adhere to social distancing.

Not really. To borrow a line from literature, “It was the best of times, it was the worst of times.” Pandemics, we must realise, has also the time when people reinvest time into their pending projects and execute their Plan B’s. So again, funding depends on what you wish to achieve. If you want to open a dine-in restaurant, this may be the worst of times, but if you want to develop an innovative app that helps people adapt to and overcome lifestyle and workstyle challenges in the post-Covid 19 world, this may be the best of times.

Yes, it is true that the boost in digital payments is the silver lining in this gloom. The fintech market is already witnessing growth in UPI, Contactless and AePS based transaction volumes, as people want to avoid contact with physical currency notes that have high chances of being contaminated as they exchange many hands. As can be expected, this migration of customers from manual to digital will have many secondary benefits for India and will immensely help in future in all sectors in the short and long term.

 What has been the impact of the pandemic on the payments space? Collaboration, consolidation or newer startups entering the space how do you foresee things panning out in the near future?

Considering that the lockdown has adversely affected many people financially and career-wise, the need for personal loans has become more urgent. However, lending as a business is dependent on the ability of the beneficiary to repay the loans, so the lending space is in a sort of a bind in these uncertain times, as repayment ability has also been affected. Collaboration, consolidation, and emergence of new start-ups will help companies stick to their core competencies, thereby reducing systemic flab and redundant replication. We’re sure things will fall into place in future.

As pointed out earlier, fintech players operating in digital payment services segment are not really facing an existential threat. However, companies into lending may get their customer base consolidated via acquisition by a large player with deeper pockets and bigger buffer to ride over ups and downs in the Indian economy. So yes, consolidation via merger/acquisition is very much a possibility in some sectors.

While it has always been an option for traditional companies to ride on the technology bandwagon to diversify their portfolio or to improve customer service ort to reach remote markets, these days employing cutting edge technology, including new age technologies like AI, right from customer acquisition to customer support has become a compulsion, as it’s impossible to survive without technology in a tech-savvy competitive market.

On the contrary, increasing unemployment will ensure that overqualified manpower will not just be available, it’ll be in surplus of the initial demand.