Airtel Payments Bank is taking cues from initial launch in Rajasthan

Airtel Payments Bank, the first in the space to roll out services nationally, has grown to 400,000 outlets across India. The company, which was initially launched as a pilot in November 2016 with 10,000 outlets in Rajasthan, has covered 15 million customers since the nationwide roll-out of its services in January this year. Given the thin margins for payments banks, the company needs scale to justify customer acquisition and marketing costs as it eyes expansion. As it faces these challenges, Airtel Payments Bank has adopted an asset-light model — sans large physical branches  —  to keep its operating costs low. Also most importantly, it is consistently drawing lessons from its pilot in Rajasthan to improve its services.

At present, customers can open accounts and remit money out of 1.5 million Airtel outlets. Following a successful pilot, the company has managed to establish a paperless network of banking outlets with uniform on-boarding processes across India.

Shashi Arora, managing director and chief executive, Airtel Payments Bank, says, “The pilot was a crucial phase for us to beta test our technology. For digitally powered paperless bank outlets, technology is at the heart of operations, it is the backbone. We have to ensure the technology infrastructure at the outlets is robust and our app interface is simple and easy to use.”

For example, for the company, fine tuning its on boarding process by accurately fetching Aadhaar for establishing user identity through biometric authentication has been a key learning from its pilot. Often, people would come to the outlets with visible discrepancies in their names in two sets of documents such as PAN and Aadhaar. In most cases, the name of the person, her first and second name and initials, would be misspelled on the two documents.

“With such cases, we had to figure out how to marry and match the details provided by a user to verify her identity. Given the discrepancies in fields like name of the person, to carry out biometric authentication we had to tweak our systems to ensure they take Aadhaar as the ultimate document for establishing an individual’s proof of identity,” says Arora.

The pilot proved that to onboard users it was crucial for the team to pick up and stay with user details seeded in Aadhaar. Because this was key to biometric authentication and crucial for running paperless outlets. Other equally important innovation came in the form of USSD (a GSM communication technology)-based solutions and ensuring these were optimised for feature phone users across rural areas.

For Airtel Payments Bank customers, their mobile number is their account number as well. Given that most customers in rural areas use entry-level feature phones, it was important for the company to check the key services it could offer to them. During the pilot phase, the team tested and offered services like providing bank balance and details of last five transactions.

Also, with an aim to tap into users cutting across regions and languages, the Airtel Payments Bank app is menu-driven and available in 12 languages. Using the app, migrant workers can remit money to other users by using a simple USSD code.

Unlike its competitors, Airtel Payments Bank has the advantage of tapping into Airtel’s 280 million subscriber base and converting a majority of pre-paid customers to opt for digital payments services. Also, for players in the field, payment is the key revenue line and hence it is crucial to identify and create more use cases for digital payments. Recognising this, Airtel Payments Bank is aggressively identifying and rolling out more use cases for customers.

Leveraging Airtel’s huge customer data base, the payments bank has made utility bill payments a simple process for rural folks who are familiar with a feature phone usage but may not be literate. For utility payments, the app shows up the electricity board based on the state the user is located in, eliminating confusion for users.

Alongside, the player is striking alliances with third parties, thereby adding to the depth and reach of its network. For instance, it has tied up with Hindustan Petroleum (HPCL) and 14,000 HPCL fuel stations will act as banking points for Airtel Payments Bank. Customers would be able to access a range of banking services at these fuel stations including opening up new accounts, making cash deposits and withdrawing and transferring moneyopening up new accounts, making cash deposits and withdrawing and transferring money.