BharatPe CTO reveals his goals for unbanked and underserved communities empowerment

Discover how BharatPe prioritizes compliance and innovation in India's fintech landscape. Learn about their rigorous approach to regulatory standards, ensuring data privacy, and continual evolution to meet emerging compliance needs.

In an interview with Dataquest, Pankaj Goel, Chief Technology Officer, BharatPe's, outlined the company's tech-driven mission: revolutionizing fintech in India. He emphasized BharatPe's role in fostering financial inclusion by empowering small businesses through innovative digital payment solutions. Goel highlighted the company's initiatives, including user-friendly platforms, business loans, and POS machines, while addressing challenges such as connectivity issues and regulatory compliance. He underscored the importance of technology in creating positive social impact, promoting financial literacy, and enabling growth for unbanked and underserved communities. Overall, Goel depicted BharatPe's commitment to leveraging technology as a catalyst for inclusive and impactful financial services in India. He discusses the company's technological advancements, initiatives for financial inclusion, and innovative solutions empowering small businesses while navigating regulatory challenges. Excerpts:

How do you envision the future of fintech in India, and what role do you see BharatPe playing in this landscape?

Over the last few years, fintech has evolved to become an intrinsic part of our lives. Today, it is normal for millions to step out of their homes to shop without a wallet as their smartphones double up for all their payment related requirements. In my view, we are still scraping the surface. The future of fintech in India is destined for significant growth, driven by the rapid adoption of digital technologies, increased penetration of smartphones and internet and increasing financial awareness amongst the population.

BharatPe plays a crucial role in this landscape by providing millions of offline businesses and merchants with simple, easy to use and secure digital payment and other fintech products. We envision a future where BharatPe continues to be a catalyst for financial inclusion, making it easier for underserved and unbanked communities to access and benefit from digital financial services. Our innovative technologies will play a pivotal role in simplifying and expanding financial services, thereby contributing to the broader economic development of India.

BharatPe's commitment to serving offline businesses and merchants aligns with the vision of a more digitally integrated, financially inclusive India. We are dedicated to creating a seamless and user-centric fintech ecosystem that empowers businesses of all sizes. Through our technological advancements and customer-centric approach, we aspire to lead the way in transforming the financial services landscape in India, ultimately making it more inclusive, efficient, and accessible to all.

Can you share insights into the latest trends shaping digital payments and how they contribute to financial inclusion in India?

Digital payments in India are undergoing a transformative evolution, driven by contactless payments and QR code-based transactions. UPI has been a total game changer for digital payments and has enabled millions to become a part of the formal economy. All these solutions have contributed to greater financial inclusion by making financial services more accessible and user-friendly. For instance, contactless payments and P2P UPI enable secure, cashless transactions, while QR code payments simplify peer-to-peer and merchant transactions. These technologies are especially beneficial for regions with limited access to traditional banking infrastructure, ensuring individuals and businesses can actively participate in the digital economy and can avail other benefits like taking loans. Embracing these trends and offering user-friendly digital payment solutions, fintech companies have been instrumental in bridging the financial gap and advancing financial inclusion in India. They have also played an important role in providing credit access to millions who were unbanked or underserved due to challenges with the traditional banking system.

I foresee digital payments emerging as the mainstream payment mode for millions across the country- not only for smaller ticket payments, but also for larger payments. Also, with digital payments becoming common, they would enable credit access for millions of merchants, who did not have access to formal credit till date. I envision a future where digital financial services are accessible and convenient for all the unbanked and underserved communities, thereby playing a pivotal role in the growth of the Indian economy.

Could you elaborate on how BharatPe leverages technology to empower small businesses and merchants, and what impact this has had on their growth?

BharatPe leverages technology to empower millions of offline businesses by providing them with a comprehensive suite of digital payment solutions and financial services. BharatPe offers simple to use and secure payment acceptance products like UPI QR, POS devices, Speakers; investment platform, access to credit and other fintech products- all under one roof. This technology-driven approach helps businesses streamline their operations, reduces the reliance on cash transactions, and facilitates easy digital payment acceptance as well as access to credit.

The impact of our technology-driven empowerment is profound. Millions of offline businesses and merchants using BharatPe experience significant growth as they expand their customer base, increase sales, and optimize their operations by leveraging our products and services. By simplifying financial transactions and providing access to working capital, we enhance their financial stability and business expansion opportunities. Furthermore, our technology-driven solutions enable these businesses to participate actively in the digital economy, adapt to evolving customer preferences, and thrive in a competitive market. This approach not only drives the growth of individual businesses but also contributes to the broader economic development of the country by fostering a more digitally integrated business landscape.

What are some of the most exciting technological innovations or initiatives that BharatPe has undertaken recently to revolutionize the payment ecosystem for small businesses?

Since its inception, BharatPe has undertaken several exciting technological innovations and initiatives to revolutionize the payment ecosystem for millions of offline businesses in India. Some of the key initiatives include:

• Interoperable UPI QR: BharatPe was the first to launch interoperable UPI QR with zero transaction fees, in the year 2018. This UPI QR emerged as the flagbearer of digital payments in the country as it brought millions of offline merchants in the fold of the formal economy. Merchants were able to accept payments digitally, which reduced their dependence on cash. The digital payments came in handy during the times of pandemic, when customers preferred to pay digitally. This ensured that businesses of merchants were not impacted and in turn, continued to grow even during the pandemic

• Business loans: In the latter half of 2019, BharatPe launched business loans for merchants. The company offers unsecured business loans of upto Rs. 10 lakhs to its merchant partners. It underwrites merchants based on their payment flows. This initiative supports their growth and financial stability.

• Merchant Dashboard: We've developed a comprehensive merchant dashboard that provides businesses with valuable insights and analytics on their transactions. This tool helps them make informed decisions, optimize their operations, and enhance their financial management.

• POS machine: In the middle of Covid in 2020, BharatPe ventured into the highly competitive POS category with its zero fees, zero rental POS machine. Within 3 months of launch, it emerged as one of the top 3 played in the POS category in the country. Recently, the company launched Android POS with a host of features to help growth of the businesses of its merchant partners

These innovations align with our commitment to simplify financial transactions and empower small businesses, making the payment ecosystem more accessible and efficient for them. By introducing these initiatives, BharatPe is advancing the digital transformation of small businesses and merchants in India.

What are some of the key challenges you've encountered in using technology to serve small businesses, and how has BharatPe addressed or overcome these challenges?

Using technology to serve small businesses presents several key challenges, and BharatPe has addressed them effectively. Some of these challenges and our solutions include:

• Connectivity Issues: Many small businesses may operate in areas with limited network connectivity. BharatPe has addressed this by designing our products in such a way that they can work efficiently in low-bandwidth environments. We've optimized our apps and platforms to operate seamlessly even when internet connectivity is not strong.

• Digital Literacy: Some small business owners and merchants may have limited digital literacy. BharatPe has responded to this by creating user-friendly interfaces and offering training and support. We ensure that our technology is intuitive and easy to use, making it accessible to those with varying levels of digital familiarity.

• Regulatory Compliance: The fintech industry is subject to regulatory requirements, and it can be challenging to stay compliant while innovating. BharatPe has established a proactive approach to regulatory changes. We ensure our solutions adhere to the latest standards and regulations while continuing to foster innovation.

• Customer Support: Providing responsive customer support is essential, especially for small businesses. BharatPe has established clear channels of communication for users to report issues or seek assistance with flagged transactions. This proactive approach fosters transparency and user trust.

• Infrastructure and Scalability: As the user base and transaction volume grow, ensuring the scalability of our technology is crucial. BharatPe ensures that our technology can scale efficiently and handle increased demand. Take the example of the festive season- we proactively enhanced our production cluster by introducing additional brokers to ensure seamless traffic management. Also, to ensure uninterrupted service during the festive season, we made the decision to transition our servers entirely to on-demand instances, avoiding potential disruptions in service due to high demand for cloud capacity, which is anticipated by various companies. Additionally, we implemented proactive database alerting and monitoring to detect and respond to potential issues in real-time, ensuring a swift resolution to any challenges that may emerge. Lastly, we adjusted the auto-scaling parameters for critical services such as merchant, pay-in, notification, and our enterprise dashboard. These changes were designed to ensure that our systems could effectively manage any sudden spikes in traffic, guaranteeing a smooth and uninterrupted service delivery

By addressing these challenges with a user-centric approach and a commitment to regulatory compliance, BharatPe has successfully utilized technology to serve small businesses, making digital financial services more accessible, efficient, and secure for this important sector of the economy.

How does BharatPe navigate the regulatory landscape in India, and what measures have been put in place to ensure compliance while innovating in the fintech space?

BharatPe approaches the regulatory landscape in India with a strong commitment to compliance while promoting innovation in the fintech sector. We ensure that compliance is considered as a key parameter for any new product/feature launch. For us, it is important to ensure that all our products are well compliant.

Ethical compliance is a fundamental aspect of our approach, encompassing data privacy laws and industry regulations. We have implemented rigorous data protection and privacy measures to ensure the security of user data and financial information. Regular audits and monitoring are also part of our compliance strategy, helping us identify and address any compliance issues promptly. Additionally, we maintain adaptive resilience by continuously updating and enhancing our systems and processes based on new data and emerging regulatory patterns, ensuring that our compliance standards remain current and effective.

In what ways do you believe technology can be harnessed to create positive social impact, particularly in the context of financial services for underserved communities?

Leveraging technology to create a positive social impact, particularly in the context of financial services for unbanked and underserved communities, is a core principle at BharatPe. Our commitment to simplifying financial transactions for small businesses and merchants is a significant step in this direction. By providing user-friendly digital payment solutions and financial services, we empower underserved communities to access, manage, and utilize financial services effectively. With our lending vertical, we facilitate credit to millions of business owners, thereby empowering them to grow their business.

I believe digital lending and digital payments can play an instrumental role in creating positive social impact and enabling underserved communities to grow their businesses. These technologies reduce the need for physical infrastructure and lower transaction costs, making financial services more affordable and convenient.

BharatPe is also actively involved in promoting financial literacy and enabling entrepreneurs, by partnering with various Central Government initiatives and industry bodies. We have partnered with Niti Aayog to build the Women Entrepreneurship Platform. Also, we are partners in the PM Svanidhi Yojna designed to empower street vendors.