Thursday, November 30, 2023

Allowing corporates into the banking sector will help to tap new segments: Aquapay FinTech CEO


The FinTech sector in India was valued at Rs 1,920.16 billion in 2019 and likely to reach Rs 6,207.41 billion by 2025, growing at a 22.7% CAGR during the 2020-2025 period.

After a devastating 2020, we have entered a new year and a new decade as well, with new expectations and high hopes, for the Indian economy that has been ailing due for the last couple of years, due to several events such as demonetisation, global meltdown, Coronavirus crisis, etc. The new decade is expected to witness the rise of new disrupting trends in the economic sector through FinTech companies.

The FinTech sector has been one of the key segments that have witnessed major growth in the last few years since the concept of the digital economy has gained momentum. However, like the other industries FinTech sector too faced challenges in 2020 and now going through a transitional phase, as these firms are implementing a host of new technologies and innovations in order to become future-proof.

According to research, the FinTech market in India was valued at Rs 1,920.16 billion in 2019 and is expected to reach Rs 6,207.41 billion by 2025, growing at a compound annual growth rate (CAGR) of approximately 22.7% during the 2020-2025 period. The study also stated that as of March 2020, India alongside China, accounted for the highest FinTech adoption rate at 87%, among all the emerging markets across the world. On the other hand, the global average adoption rate stood at 64%. Clearly, the Indian FinTech market has been growing at a fast pace and has become one of the key driving forces for the Indian economy’s growth.

Autofintechs spoke to Nitin Chavan, CEO of Aquapay Payments Technologies (P) Ltd, a FinTech firm that deals in enterprise payment solutions; and claims to be associated with more than 300 marquee Indian corporates spending more than Rs 35,000 crores of payments. The interaction is an attempt to learn how the FinTech ecosystem in India is evolving to make itself future-proof, how it is trying to come out of the crisis and walk on the growth path.

Edited excerpts.

Q. There are several FinTech firms in India. But, what is the status of FinTechs that are providing enterprise payment solutions in the country?

Fintechs who are in the enterprise space, are trying to solve the payment needs or challenges that companies typically go through. The enterprise space consists of various players including strategic, large, mid-Size, SME’s, micro SME’s, etc.

No matter their size for any business there are two main fronts when it comes to payments – receivables and payables. We as an organisation mainly focus on the payables front. What we do is provide solutions for organisations so that they can manage their payments more efficiently and bridge the gap between the functioning of the corporates and their payment functions.

Fintechs are with their enterprise clients all the way through the journey, from the time they want to procure something until the time they make the payment and settle it in their book of accounts. In short, they act like an ERP but provide functions that an ERP is not able to do. There are various Fintechs in the sector who focus on the different needs of each organisation and they are trying to help them drive savings, reconcile, and help improve efficiency in the process.

Fintechs provide customised payment solutions for any need the organisation may have. They always have done. But what’s changed is that due to the shift to a more digital tomorrow, organisations today need way more customised help, which today’s Fintech companies are ready to offer. 


Q. We all have seen Demonetization had accelerated the pace of the digital economy in India. How the Covid-19 pandemic has disrupted the FinTech sector in the country? Also, how has been the recovery in the segment?

Demonetisation caused a lot of upheavals but that was largely limited to the retail and the consumer front and didn’t really impact big corporates as much. Corporates weren’t that affected as they were already processing payments digitally through RTGS, NEFT, etc.

So in that sense demonetisation did not really change much for such enterprises. But having said that smaller businesses that aren’t big corporates and relied primarily on cash as a means of transacting certainly did face challenges. And they weren’t limited to demonetisation. The implementation of GST also presented challenges to such businesses. Ultimately, it compelled them to also go digital, thus impacting them in a major way.

The pandemic has certainly had an impact given that Fintech solutions are typically focused on corporates and their day-to-day dealings. There has been a significant drop in their revenues, but Fintechs have taken the opportunity to improve their capability stack and work on improving the user experience or efficiency. We as an industry innovated so that the processes and implementation that was done through a physical interaction could be met in an online format, making the process partially or fully-automated.

Since banks are completely dependent on Fintechs for the automation of their processes, it was down to the Fintechs to meet such demands. Fintechs in the past few months have tried improving the capability stack by automating as many manual processes as possible. The pandemic has given an opportunity to Fintechs to innovate more on digitising various processes that were fully manual, making it absolutely contactless and effortless, thus making it a win-win situation for all parties involved.

Q. What are the segments that Aquapay currently covers? What is your expansion strategy in 2021?

Aquapay is an enterprise payment platform with a lot of innovative payment solutions that will help corporates to fill the gaps in processing their payments. We cater to corporates of every size. We not only want to focus on domestic payments but also help organisations when it comes to cross-border payment solutions. Aquapay today tries to solve the payable needs of corporates, whether that’s making supplier payments, utility bill payments, GST payments, Direct Indirect Tax, these are the kind of solutions we cater to.

Apart from this the platform acts as an ERP for corporates as it has all the policies laid out, it has all the controls that corporates have, it highlights the processes that corporates follow for transactions, etc. It is a one-stop-shop where they can come and understand anything about payments. We are also actively working towards solving the reward recognition, gifts, incentive-related needs that a specific industry has as these factors play a major role in each and every industry today.

In 2021, we would like to achieve a complete procure-to-pay module and tackle any issue faced by any organisation.

The platform that we already have, we want to take it to a level of calling it a procure-to-pay platform, right now it is processing payments but we would like to get involved in the process from the beginning. In the sense from the time when someone wants to procure something or the purchase order is created, that is the point we want to get involved from so that we are a complete procure-to-pay platform.

So in 2021, we would like to achieve a complete procure-to-pay module and tackle any issue faced by any organisation. Over that, we also want to extend our help towards start-ups to run their daily business efficiently. We want to be a start-up that helps other start-ups. Aquapay will also want to act like a bank with the contacts that we have created with the pool of NBFC’s, and use their expertise to help industries get a solution to the problems that they are facing on the payment frontier. We would like to identify partners and create alliances with organisations and help fulfill their needs.

Q. There has been much hue and cry regarding the government’s decision to allow large corporates in the banking sector. How do you see this move could impact the Indian economy?

India is a densely populated country and the BFSI sector is not in a position to solve the need of the last strata that banking needs to reach. Hence, we can’t see the cashless economy growing at a faster pace. The cashless economy has grown far faster in other countries because of their smaller populations. Also, the awareness about using money and the existence of infrastructure for people to use the banking channel is not very popular or evident or taken seriously in our country because in some places it is a boon but some places are still not tapped and are away from this channel.

In my opinion, it is a welcome move as these corporates acting as a payment bank can help reach out to the strata that thus far have been untapped. This is nothing but a move towards becoming a cashless economy where people will have various options to conduct transactions digitally or come into the banking cloud. Thus, providing incentives for citizens to move away from a cash economy to a cashless one.

It is difficult for banks to tap these markets sometimes as there is always a cost-benefit mechanism for banks to decide upon a satellite branch or have some sort of a structure and hence we are not able to see a faster rate of adoption towards a cashless economy.

Q. What are the disrupting trends the FinTech sector will witness over the next decade?

Disruption is the only objective when Fintechs are operating in this space. The track record for Fintechs in the past decade regarding what was going on in 2010 versus 2020, I think a lot of processes have moved into the digital sphere and we have created a lot of avenues, especially in the retail sector. Fintechs are constantly innovating, coming up with ever more solutions but this is largely focused on the retail space rather than the enterprise space.

When we say solutions, we have seen the way lending is done, how online sales have skyrocketed, people have moved to an online way of undertaking their bank needs, today processes are undertaken with just a tap on the screen. Thus, disruption has been taking place in a positive manner and will continue to do so.

With the emergence of artificial intelligence, machine learning, blockchain, chatbox, etc. it is nothing but studying the customer’s behaviour and reinforcing it. Thus, this can provide customised experience for each consumer that is present. In terms of the coming decade, it is going to be a predetermined experience in where I think people will be more predictable than ever and online services will be able to cater to their needs.

This will reduce physical modes of conducting their activities which will move further into the digital space. In every aspect wherever we see there is some sort of discomfort anyone has today, people are trying to address that gap and if it is affecting a large population then only it is termed as disruption. Thus I would say it is going to be a completely automated world in the decade in which we are going to experience.

Q. How has been the impact of RBI moratorium in the FinTech sector?

The moratorium is a phenomenon where people have been given an opportunity to delay their payables, like their loans from the bank. I would say moratorium has not directly impacted any Fintech either positively or negatively because it was completely limited to the transaction between a bank and its customer.

I think what has really changed is creating systems and creating processes, as it came as a shock to banks with many authorising bodies telling them a moratorium needs to be applied due to the pandemic. Thus the RBI’s decision created a huge financial impact for the banks.

The role played by Fintechs in the moratorium was the creation of systems and processes where banks could manage the moratorium, as this was something new and banks needed to understand their standing. It gave an opportunity to Fintechs to create a platform or service or processes where how the moratorium has fared with different customers could be identified. Hence Fintechs had a really low impact from the moratorium.

Also Read: SIPs will see money pouring in mutual funds in the next 6-12 months: Samant Sikka

Shreyasi Dey
Shreyasi Dey
Having extensive experience in accounts and inventory management, Shreyasi Dey has been a passionate writer and a city journalist. Worked with The Times of India, Ei Samay, Discovery India, Dainik Sambad, Aajkaal.


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