During the past few years, Indian fintech company Sarvatra Technologies, which was founded in 2000, has been helping small community banks in India integrate technology to facilitate real-time, online payments. The initial aim of the company was to offer nationwide connectivity between these small banks and their larger brethren.

“We started Sarvatra because we wanted to do something for the people in rural areas,” says founder Mandar Agashe. “We realised that enabling cooperative banks to go digital would be a monumental step in helping the unbanked and underbanked areas of India where most of the population resides.” Even simple facilities such as ATMs and debit cards were not accessible to these people, he adds. Since inception, the focus of the company has been to address the special requirements of the rural and co-operative banking sector. Sarvatra aims to remove all budgetary, technological, operational and infrastructural problems faced by banks in the sector. The overarching idea has been to bring these banks on to a digital platform and enable them to play a role in progressing financial inclusion in India.

The company was a pioneer of many aspects of banking technology; it was the first application service provider to enable sub-member banks on RuPay ATM, E-com, Value Added Service and the Immediate Payment Service (IMPS). It also claims to have created India’s first point of sale-based ATM. Other products and services include CardSafe, which is a standalone mobile banking security app that enables bank customers to customise and protect the security of their debit cards. Sarvatra has also built a network of micro ATMs – portable devices that make banking possible “in all areas”, says Agashe. The company serves more than 550 co-operative banks across 30 states and union territories of India.

Sarvatra is a B2B company that provides, as a managed service, the entire infrastructure that is required by a bank to centralise its systems and to participate in the national payment network. “Prior to Sarvatra, possessing a world-class data centre and payments infrastructure was difficult for small rural and co-operative banks due to the huge capital expenditure involved in owning and managing the required infrastructure,” says Agashe. “We enable even the smallest rural and co-operative banks to offer modern customer facilities with minimal expenditure and the shortest time to go live.” Sarvatra’s revenue is generated by operating cost on services, which are on a pay-per-use basis.

Agashe believes the main differentiator of the company is its pioneering approach to technology. It offers a range of seven switches: EFT, IMPS, Bharat Bill Payment System, Unified Payments Interface (UPI), Aadhaar Enabled Payment System, eKYC and micro ATM. This has attracted the attention of banking giants such as ICICI Bank, which in turn has enabled the company to work with third-party apps such as Google Pay and Paytm. In addition to ICICI Bank, new-generation payments banks such as Equitas Small Finance Bank are Sarvatra clients. “This makes us a significant name in the industry,” says Agashe. As well as these two banks, other customers include Capital Small Finance Bank, Nainital Bank, Oriental Bank of Commerce, IDBI Bank, Bank of Maharashtra and NSDL Payments Bank.

One of the main hurdles for the company as it was starting out was that very few of the rural co-operative banks were equipped with the technology required for digital transformation. “We had proposed to these banks a mobile app for national availability but realised that first they required a separate mobile banking licence from the Reserve Bank of India; only then could they launch a mobile app,” says Agashe. “We realised that more than a lack of funds for software technology, there was also a gap in the knowledge required to be part of a payment system.”

In 2010, the National Payments Corporation of India, an umbrella organisation for operating retail payments and settlement systems in the country, allowed Sarvatra to be the first ASP to connect directly to the National Financial Switch. This enabled co-operative banks to interoperate with other banks. “Our first breakthrough came when two banks, HDFC Bank and ICICI Bank, came on as partners. They are both an integral part of the payment network,” says Agashe.

Nearly two decades after its formation, Sarvatra is assessing international expansion. Typically, community banks and co-operative banks in other countries use platforms such as Visa and Mastercard, while their counterparts in India are connected to the homegrown RuPay network. “Many countries are studying the IMPS and UPI methodology and we have started getting enquiries from other countries such as Egypt and Nigeria for similar platforms,” says Agashe. “We are evaluating different global markets that want to replicate IMPS and UPI and are looking for payment technology companies like Sarvatra to help them migrate to the latest payment platforms.”

Sarvatra’s business model has evolved over its existence and from selling software on a one-time cost basis towards offering software on a platform-as-a-service basis. The company charges a one-time integration fee plus transaction fees. It is focusing on next-generation UPI and micro ATM technology platforms. “We have to enable more acquiring platforms in rural India because the issuing side has been catered to quite well by banks using our platform and those of other banks,” says Agashe.

Sarvatra enjoys a 54% market share of the debit card issuing platforms, serving more than 550 co-operative banks. The company is also among the leaders in providing the technology for IMPS and UPI transactions, while holding a leading share of the total transaction volume that is generated on the platforms nationally. Last year, the gross transaction value of about INR400 million ($5.6 million) was managed on the Sarvatra-hosted payments platform.

The company’s overall revenue exceeded INR500 million in the last financial year, with transactions growing by 50% on the previous year. This year and over the next five years, the company expects transactions to keep growing at a rate of 50% year-on-year and to reach INR1 billion annual transaction revenue in “a few years”, says Agashe.

Among the trends Agashe sees developing in India will be a shift from QR-code based payments to facial identification-based payments. “Today, with mobile plus QR code, customers don’t need to carry a debit card, but with facial identification, customers don’t even require a mobile and all one has to do is to look into the ID reader and smile to complete the transaction,” he says. “In fact, the roll out of such technologies has already started in China. Sarvatra is waiting for guidelines for India to start integrating this technology.”  

Article by-

Priyanka Pani
Senior Regional Correspondent
Middle East and Asia

by IBS Intelligence
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