We are not a conventional payments company: AGS Transaction's Ravi B Goyal

Ravi B Goyal, founder-chairman and managing director of AGS Transaction Technologies, spoke to Raghu Mohan

AGS Transaction Technologies has interests in legacy and the digital universe payments, and no peer-to-peer comparison is available. It straddles businesses ranging from ATMs and cash logistics to servicing customers across retailing, petroleum, and mass transportation. Ravi B Goyal, founder-chairman and managing director, spoke to Raghu Mohan. Edited excerpts:

Few companies answer to AGS’ Transact Technologies’ profile given your interests across the payment landscape. Can you sum it up for us?

We started by re-selling the ATMs and cash-dispensing machines of Wincor Nixdorf (now Diebold Nixdorf) in 2002. We have diversified into banking outsourcing, currency-tech, transaction switching, and cash-in-transit (through Securevalue India), to digital payments under the brand ‘Ongo’ and toll-and-transit solutions. In the petroleum and retail space, we provide customised solutions including inventory management, forecourt automation, integrated payment solutions, and cash-management solutions. Our digital payment suite includes point-of-sale (PoS) solutions, credit and debit card management services, loyalty programmes, and other merchant solutions. We also manage the automatic fare collection (AFC) for the Kochi Metro and Amritsar Metrobus; and have won the mandate of AFC management for Phase-II of the Bangalore Metro. You see, we are not a conventional payments company.

Where did you get the idea to knit together such a company? 

During my first entrepreneurial stint in the 1990s with Advance Graphic Systems, which is focused on colour-dispensing solutions (hardware and software), I frequently travelled to Europe. There, I had the opportunity to experience first-hand the paradigm shift which digitalisation was bringing in. Automation in India was at a nascent stage, and global players had a limited presence. So, when our partnership (through AGS Transact Technologies) with what is now Diebold — Nixdorf as their sole distributor of cash-dispensing machines in India succeeded, we extended it to the retail sector to streamline complex processes. While working with banks, outlets of petroleum and retailers, we observed that offering them a bouquet of products and services provided greater overall operational efficiency in terms of customisation, turn-around time, and convenience.

Are you saying that cash-versus-digital payments is not to be seen as a zero-sum game?

We believe that cash and digital payments will continue to co-exist. The end-consumer should be empowered to pay via a mode of his or her choice whether it is cash, credit, or debit cards, or UPI QR, whatever be the mode. This requires an integrated-payments platform, which can process both cash and digital forms of payments in a secure and seamless manner; and which is scalable. For doing so, we are constantly innovating, strengthening, and customising the solutions whilst keeping in mind the end-consumer convenience. For example, we have introduced UPI-QR-based ‘touchless’ cash withdrawal and deposit solutions for ATMs and ‘Fastlane’ — a mobile-fuelling app. Similarly, our digital payments brand Ongo offers value-added services, including loyalty programmes and instant motor insurance.

How is the ATM business — the legacy part  — doing now? 

The ATM industry has significantly evolved powered by technological innovations. They are today fully capable of operating as ‘virtual branches’. Bank customers can fulfil their requirements through a self-service model operating 24x7. You can make real-time cash-deposits through cash-recyclers and change the PIN without visiting the bank branch. We offer a complete range of ATM management and outsourcing services to more than 100-plus banks. Currently, we have an installed base of approximately 70,000 ATMs and have processed about 550 million switching transactions since April 2020.

We are constantly innovating to offer more robust and future-ready solutions to our partner banks. For example, AGS’ UPI-QR-based ‘touchless’ solution enables a bank customer to withdraw or deposit cash by scanning a QR code displayed on the ATM using a smartphone. During the lockdown, we worked closely with HDFC Bank, ICICI Bank, Axis Bank, Kotak Mahindra Bank, Federal Bank, and RBL Bank to sustain critical services such as ATM operations, cash replenishment services, and various back-end operations to serve the needs of customers. We introduced more than 50 mobile ATMs — or ‘ATMs-on-wheel’. Also, during the peak of lockdown, we successfully migrated a significantly large-size bank on our switching platform from a different platform they were using earlier.

If the low interchange rate at Rs 15 per transaction is an issue on the ATM side, you also have the zero-merchant discount rate (MDR) on the PoS side when it comes to Rupay cards? How has it impacted deployments of ATMs and PoS machines?

We are primarily a cash-led economy, which will continue to see the co-existence of cash and digital payments. The current cash-in-circulation, according to the Reserve Bank of India’s data, has increased to 25 trillion from 23 trillion, up by almost 10 per cent in the past 6-7 months. Also, the pandemic has reinforced the importance of digital payments with increased adoption by new and existing customers. This offers a great opportunity for both ATMs and digital payment platforms such as PoS to grow simultaneously. A healthy interchange rate as well as MDR can play an important role in strengthening this ecosystem and fast-track its growth, especially in the tier-3 cities.