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The Story Behind UPI, And What’s Next: ONDC, BBPS & ULI with Deepak Thakur (NPST)
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"When UPI happened, it was like, very clear now, this is something that will change everything."
This powerful statement from Deepak Chand Thakur encapsulates the monumental shift the Unified Payments Interface has brought to India's financial landscape. It wasn't just another payment system; it was a revolution that reshaped commerce, financial access, and technological innovation —a revolution that Deepak and NPST have been at the heart of.
Deepak Chand Thakur is the Co-Founder and Chief Executive Officer (CEO) of Network People Services Technologies Ltd. (NPST). He has guided NPST from a bootstrapped startup to a publicly listed entity on the mainboards of the National Stock Exchange (NSE) and Bombay Stock Exchange (BSE). Under his leadership, NPST achieved FY24 revenues of ₹130.08 crore, a 216% year-on-year increase, and a net profit surging by 310% to ₹26.71 crore. The company's SME IPO in 2021, which Deepak recounts was valued at ₹50 crore, saw it deliver approximately 9000% returns to its early investors and reach a peak market capitalization of around ₹5000 crore.
Key Insights from the Conversation:
👉UPI's Genesis & Evolution: A deep dive into how UPI was conceived, its evolution from IMPS, and why it became a uniquely successful global model for digital payments.
👉NPST's Role in UPI: How NPST became a crucial technology service provider, bridging the gap between NPCI and banks to facilitate UPI adoption and build scalable solutions.
👉The Tech Behind Scale: Understanding the microservices architecture NPST employs to handle massive transaction volumes, like processing over 5.5 crore transactions daily for a single banking partner.
👉Innovation Beyond MDR: How the absence of Merchant Discount Rate (MDR) on UPI payments spurred innovation towards creating value-added services and new revenue models.
👉JAM Trinity's Impact: The foundational role of Jan Dhan-Aadhaar-Mobile (JAM) in creating the digital backbone that enabled UPI's widespread success in India.
👉Future of Payments: Exploring what's next after UPI, including digital currency (e₹), ONDC, and BBPS.
Chapters:
00:00:49 - Introduction: Deepak's Journey to Becoming a Fintech Founder
00:07:36 - Understanding NPCI and India's Early Payment Ecosystem
00:15:11 - NPST's Bootstrapping Strategy & Early Days Before UPI
00:22:33 - The UPI Revolution: Impact and NPST's Pivot
00:39:14 - Deep Dive: UPI Architecture, Evolution from IMPS & Global Uniqueness
01:07:07 - The Business of UPI: No MDR, Scarcity Driving Innovation
01:19:01 - UPI Going Global & The Foundational JAM Trinity
01:32:55 - Beyond UPI: Exploring BBPS, ONDC & Account Aggregators
01:53:31 - NPST's Business Model in the UPI Era: PPaaS & Value Creation
02:03:48 - The NPST IPO Journey: Fueled by Fintech Growth
02:14:37 - Life After IPO & The Future of Digital Payments in India
#UPI #FounderThesis #DigitalIndia #FintechIndia #PaymentsRevolution #NPCI #DigitalPayments #MakeInIndia #StartupIndia #TechInnovation #IndianFintech #Innovation #DigitalTransformation #PaymentGateway #Fintech
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Transcript
Why is UPI so successful in India?
00:00:00
Speaker
Why is UPI such a unique thing in the world? I haven't heard of a similar success in any other country. Did India india just get lucky? I mean, every 8 out of 10, transactions are on UPI. Is cash dead?
00:00:16
Speaker
If the cash is not dead, then can we create a digital cash? Help me understand NPST as a business. We never raised funds through debts. We never diluted an equity. So we gave about 9000% return to our investor
00:00:43
Speaker
Deepak, welcome to the Founder Thesis Podcast.
NPST's Entrepreneurial Journey
00:00:46
Speaker
Tell me about your journey of becoming a founder. I wouldn't say it's an accident, but at the same time, I would say that it was a decision which happened very late.
00:00:58
Speaker
I was working for a consulting company, then I worked for IT company. ah During that period, I really found that you know there are things which I was trying to do and there are a lot of efforts which I was trying to make never worked out.
00:01:16
Speaker
ah Not because it was not workable, but because I felt that there was no one listening to it. So there was opportunity which we were working on for a very long time.
00:01:31
Speaker
um For about eight years, so I was, sorry. Yeah. So I was, i worked for Frost & Sullivan and then I worked for Spanko. During this time, I was actually trying to read 2G, 3G market, you know, how the growth would happen.
00:01:49
Speaker
And then i was even looking at the internet penetration in India. So I was actually part of the ICT room in information and communication technology. Along with the penetration of internet and penetration of phone, there was also a launch of iPhone during that time and the smartphone era would start.
00:02:11
Speaker
So that is ah also something that was going on. Parallel, I was also going through the National E-Governance Plan. For anything to work, infra is very important and what is the government doing about it?
00:02:25
Speaker
That is what I got in 2006, National League Governance Plan, where government had national mission mode projects, 27 odd, and they had a plan to set up data centers, they plan to lay networks across India.
Evolution of Digital Infrastructure in India
00:02:40
Speaker
Parallel to that, you have 2G, 3G evolution going on, and then smart phone coming. it was quick to understand that, you know, entire world will definitely come down to this.
00:02:53
Speaker
You know, ultimately that's where the applications will be built. Services will be delivered. You know, you'll find people going to that particular place. You don't have to, you know, run around for shopping. We just have it on phone.
00:03:09
Speaker
So there are a lot of use cases, lot of stories going around globally, but it was about to come to India. And that is where I felt the need of getting into this.
00:03:21
Speaker
Just before we started, there was this question running in my mind, you know, what happens if you fail? So I just told my wife that, you know, let's try it once. I'm just 30, 31 right now.
00:03:34
Speaker
Let's try it once. If at all we fail, We fail once and then I have lot of time to recover. but it's way too early, even now. So let's try it out. And it's been 11 years now.
00:03:47
Speaker
ah Things worked out well. oh ah Partners and all those people who believed early, all those guys who came together, really thankful to them.
Challenges and Solutions in Government Service Models
00:03:59
Speaker
ah What did you want to try? Because you wouldn't have... gone into it thinking I want to do entrepreneurship. Let me quit and figure out and explore ideas. I'm ah assuming you would have narrowed on something ah Yeah.
00:04:19
Speaker
Yeah. so So I had a lot of material with me. I went to so to start with. So basically when we started, it was it was about setting up, you know, physical centers across India. So the idea was, can we digitize the physical centers who can deliver government and business services to citizens in rural, semi-urban India?
00:04:42
Speaker
So that was the model with with which we started. And we were three of us. but There was an ITC initiative, eChopal or something like that, right? eChopal was known that time. There was this model which was ah going on from the government of India, which was common service centers setting up... ah one center for six one center every six villages.
00:05:10
Speaker
That was the plan. So I don't remember the number, but this was in lakhs. I think 6,26,000 villages divided by six. So that's the number that government came up with.
00:05:22
Speaker
And this will be the initiative. Just to land records or birth records, death records. Everything from the government. Yeah. So for government services, now you can go to the center. They will be the authorized agents.
00:05:33
Speaker
And they will be living services. So that was the first initiative. Now there we could not make great money. But we were able to do Aadhaar enrollments.
00:05:44
Speaker
Now, other enrollment is where we got paid every transaction. And that's where we started building
The Rise of Mobile and Digital Banking
00:05:50
Speaker
the cash flow. But back to your question, what made us think about this entrepreneurship? So what ran in my mind was very clear.
00:06:00
Speaker
There's a mobile penetration happening in India. This will peak to 100% and go beyond that in next three, four years. odd The technology will move from to 3G, 3G to then obviously 4G. And while we were talking about 3G, there was a conversation about 5G in Japan. So that was also going on.
00:06:20
Speaker
Online marketing, online space, shopping, all of that had really caught up in US. So all that was going on. And then I thought this the right time to get into this.
00:06:33
Speaker
And during this journey, I was actually working for the banking and financial sector. So, IT as a background, mobile banking was something which was very new.
00:06:44
Speaker
yeah Your client was a bank who was doing ah like a digital transformation and Spanko was doing the IT intro for them, something like that. Yeah, so Spanko actually launched SBI Freedom that time.
00:06:57
Speaker
So, there was this mobile app SBI Freedom, mobile app. It was a mobile banking app. NPCI started somewhere in 2000. I mean, obviously long back, but... 2010 is where it is said to be IMPS story
NPCI's Role in Payment Innovations
00:07:11
Speaker
coming up.
00:07:12
Speaker
Now, what is NPCI's history? let's Just give a quick primer on that. Like, why was it created? Who created it? like Okay, so this is my learning and my, obviously, understanding. I don't want to get into nitty-gritties of that.
00:07:27
Speaker
ah See, NPCI for sure, the the the thought around... NPCI is National Payments Corporation Corporation of India, yeah. Now, the thought around this is very clear that, you know, for anything to work successfully, you need to have a seamless payment flow in the country.
00:07:45
Speaker
And for that to work, you really need to have real-time payment ecosystem. That is where the regulator thought about, you know, getting one body brought in by multiple banks.
00:07:57
Speaker
So all the banks pooled in and then they decided to create an entity. And that is how NPCI came in. So NPCI was interested in the task of building the real time infra of the country around payments.
00:08:11
Speaker
And that is where you'll hear about products around check truncation system. like you know So one small project, let's say the check takes about three to four days to realize, can we bring it down to same day?
00:08:25
Speaker
To do that, can we have a play of digital ecosystem? So there was there was a product called a check truncation system. Now, going beyond that, can we do a real-time payment which works 24 by 7 and can be executed within a minute?
00:08:43
Speaker
So then came IMPS, immediate payment system. So that's 24 by 7 started working. and And that is where people were not aware, like the system before that used to be NEFT in which... Neftart is yes, yeah.
00:08:57
Speaker
and ah There would be like some hourly settlement during working hours only kind of a thing. True. True. So I keep thinking. So NEFT and RTGS, obviously, NFT and RTGS is where, you know, so idea was to get the online transaction. And that's basically because you had internet banking in place So you work in an office hour, you have, what would the business case where the fund transfer will be higher.
00:09:26
Speaker
So business cases, you have B2B payments, you have corporate payments. So you have large ticket size payments. So then you have RTGS for that. And then any of these where you log in into internet banking and you make So you don't log in at night, right? You don't log in late.
00:09:42
Speaker
And obviously there wasn't such need during that time. But now that the economy was changing, where the transactions were supposed to process quickly, and you were expected to have the, you know, the business running 24 by 7.
00:09:59
Speaker
Now in that case, you need 24 by 7 pay-by.
Collaborations Between Banks and Tech Providers
00:10:03
Speaker
For that, it was imperative to get some someone like NPCI in place and every bank should agree to you know such kind of technology.
00:10:11
Speaker
And that is where IMPS came into picture. So, to all of this is a... Like a protocol body, like say for the internet, like HTTPS is ah is a protocol set by some protocol body, but they don't run the internet. Like the internet is run by, let's say, AWS servers or Azure, whatever.
00:10:34
Speaker
What NPCA? NPCA is not a protocol body. So ONDC in fact is, but... NPCI is is a proper switch.
00:10:45
Speaker
When we say switch in our terminology, it's an application that sits at center and then it does the interoperable transition. They have a proper technology to create an interoperable payment ecosystem.
00:10:58
Speaker
So every single bank can go talk to NPCI about debit credit transition and then they will ensure that you have a routing around this particular transaction. So NPCI will then have multiple products.
00:11:12
Speaker
say A MasterCard. like Like MasterCard is a way for payment we've processed. ah Different context, but MasterCard is running the pipes.
00:11:23
Speaker
ah Similarly, NPCI is running the pipes. Absolutely right. In fact, the answer is Rupay. So Rupay is also run by NPCI. so So in reference to MasterCard and Visa, those who understand that story.
00:11:37
Speaker
So Rupay is run by NPCI, which is an India's product. And it has all debit, credit, prepaid, all the possible you know payment instruments and running on Rupai.
00:11:51
Speaker
Similarly, you have IMPS and then you have UPI. Now, these are non-card products, but digital in nature. Then you have CTS, you have Aadhaar enabled payment system where you use Aadhaar as a base for validation and then deposit withdraw certain funds.
00:12:08
Speaker
So these are multiple products that they have. So obviously they have lot of responsibility around building nation and creating the digital story about India. So that's what they do.
00:12:19
Speaker
Now, this was... ah So we started end of 2013 and then, you know, IMPS was 2010 story. Okay. UPI had come out then or it
Mentorship and NPST's Growth in Digital Payments
00:12:31
Speaker
was? No.
00:12:32
Speaker
Okay. no No. UPI is 2016. 2015 is when the guideline came and 2016 April is when the pilot launch happened with few closed user banks.
00:12:45
Speaker
oh So now imagine if you have so much story with you and you know what's going to happen in future, have worked in consulting, you have worked in the real execution.
00:12:57
Speaker
So it was obvious that, you know, if at all, there is someone who had a risk taking appetite and who really thinks that whatever, you know, has been taught or whatever ideas had been brought in would have worked really strong.
00:13:13
Speaker
then I felt it is very difficult for me to continue working the way it is until, you know, you really try it out. And that is where I mentioned, let's try it out. You know, it fails, it fails once, but later on, you know, let's go ahead.
00:13:28
Speaker
And in fact, this was majorly pushed by my boss ah who who happened to help me out, you know, with the entire thought process. my He became my mentor.
00:13:42
Speaker
And he was the one who actually came up with this entire you know thought around this entrepreneurship. So all of this ah taken together, we decided let's create network people services technologies.
00:13:57
Speaker
Now when we started yeah so when we started this company, it was network people services technologies. The idea was to create a network of service delivery centers by use of technology to serve people.
00:14:14
Speaker
So the first model was obviously around the physical center, which I mentioned. And from there, as and when we moved ahead, the best part about NPST is that we never stopped with one single model.
00:14:27
Speaker
We realized what is next. And this particular business, which we started earlier, became the feeder of operating margin in the organization. Now, we didn't want to raise funds, neither we want to wanted to you know go The idea was very straightforward that we were still building the ecosystem and we had very, very strong idea about what we actually intended to achieve in the digital payments.
00:14:55
Speaker
And we were way too early there. So Ashish is a hardcore finance guy. He's CAICWA. He's another co-founder.
00:15:07
Speaker
ah He decided that, you know, Deepak, let's push the organization at a bootstrap model and let us try working on the operating margin. So you keep thinking about what business can be brought in, what kind of operating margin can be generated. Even if it is less, let us go bootstrap around it.
00:15:27
Speaker
That's where we started. Anyway, there were hardly any VCs around at that time, right? 2013 would have been. We got an offer way back to sell the, not offer exactly, but the discussion started. ah The discussion was around selling the center business because we almost did about one crore Aadhaar.
00:15:48
Speaker
And that was a great revenue booster. ah We picked up that money and then we invested into what where the heart was, obviously digital payments. So although we started end of 2013, but the NPST that you're seeing right now, the story that you're seeing right now actually started at the end of 2015-odd.
00:16:11
Speaker
So two years later. So those two years became feeder to actually build NPST. So that one car enrollments happened in those two years. Yeah. How much did you get per enrollment?
00:16:24
Speaker
I think it was somewhere around mid 25, 26 or something like that. And of which we used to get some 10, 15%. Rest used to go to the center guys.
00:16:39
Speaker
So this was asset light.
Operational Strategies and Shifts in NPST
00:16:41
Speaker
You were the technology provider for the center. You were not actually running the center. No, there was. In fact, we were not the technology guys.
00:16:49
Speaker
It was entirely by UIDI. ah UIDI is ah now everyone knows Aadhaar. So they provided everything. we were majorly the guys running operations on field.
00:17:03
Speaker
So set up about 2000 odd centers, ensure that, you know, are right enrollments, target being achieved, services being done. There is no overcharging, reporting to the UIDI. So all of that we did.
00:17:18
Speaker
Parallelly, we had like three, four guys sitting in office doing a small coding around mobile banking, around Android testing. So we were in fact in that Symbion era.
00:17:30
Speaker
So from there moving to Nokia phones and you you see. So there was no common operating system. So I'm lucky. and So when I'm talking to you, I'm actually trying to realized that, you know, there's so many things happened in those five, six years.
00:17:47
Speaker
There was this government's plan around going to e-governance. There was this 2G to 3G journey going on. And then at the same time, the operating system were getting standardized with Android and, you know, iOS and then smartphone getting launched. So all of these happened during that time.
00:18:05
Speaker
And so, I mean, it was very late. But I think Jio majorly on the 4G journey, that is where they came.
00:18:17
Speaker
But the the content was not clear in our mind that you know what exactly has to be built and where exactly we have to go. So we picked up the, in fact, there was one more operating system, which was Windows, brought in by Microsoft that did not work.
00:18:37
Speaker
yeah and And Windows was picked up by Nokia. yeah So unfortunate. But anyway, ah so we we stuck around testing Android and you know iOS. We stuck around building some pieces around it.
00:18:52
Speaker
So you had seen that SBI Freedom app ah business of Spanko, and you were essentially thinking that we can do that kind of a business where we can build them a mobile app for a bank.
00:19:04
Speaker
and My intent was not just mobile banking app. That was indeed the beginning. but But the question that was in my mind that, you know, BFSI segment itself is going through change.
00:19:16
Speaker
So taking a cue from what government was planning to do and how the how the internet is moving, it was very clear that ultimately the users will start using internet banking, mobile banking. In fact, the account which I opened, my personal account, which I opened ICCI Bank when we started the company,
00:19:38
Speaker
Initial two, three years, I was entirely into internet banking. Till date, I have never been to the branch. I mean, since 2013, I have never been to that branch, wherever the account was opened.
00:19:51
Speaker
They came to our office, you know, that change was visible. It was very clear that, you know, that's not not how the banking will happen. And mobile banking during that time was just about fund transfer.
00:20:04
Speaker
You transfer fund, you do balance inquiry, you check your statement. That's all. There are hardly about 10, 15 odd services on it. But the question was, what about the services which exist inside bank, but not available on phone or on internet?
00:20:20
Speaker
So that was another question. Then if 24 by 7, I mean FDs, loans, you know, or RDs, there are so many such stories which are yet to be bought brought into the application.
00:20:35
Speaker
So obviously what was being done in my past organization where before i we started embarked on to this journey, That was the trigger point for us to, you know, for whatever has been collated till date.
00:20:50
Speaker
And then after you see SBI freedom and then, you know, oh, see, this is happening and now it has to be done. So somewhere in 15, 16, when we restarted our journey around digital payments and then from there, 16 is when UPI happened. And when UPI happened, it was like very clear now, this is something that that will change everything.
00:21:14
Speaker
So 18, 19 odd, we were very clear that we are completely technology company. And then we changed ourselves from network, people, services, technologies to NPST, where T is prominent.
00:21:28
Speaker
So that NPST still remains, but today the T has become prominent, then N. So that's how the entire journey. So we rebranded o ourselves. The logo was redesigned.
00:21:40
Speaker
Yeah. the ah So you heard about UPI, when you heard about upi ah Did you start winding down that Adhaar enrollment business? Did that continue? What did you see as the UTI? It was by force.
00:21:54
Speaker
It was by force. In fact, we were asked to bring it down. The decision was taken to... I think most of the enrollments were done across India.
00:22:05
Speaker
And ah there are a lot of decisions being taken around you know security and compliances. And then at the same time, and the cause to maintain such a huge infrastructure across country, taking so many updates and MIS going on.
00:22:22
Speaker
I mean, I'm just talking about basics. And then at the same time, being at a risk of, you know, what kind of enrollment would happen after this. So lot of decision taken and it was ah forced to push it only in the centers, which were either owned by the government, they were captive in nature,
00:22:42
Speaker
or you know banks that was the idea so initially we thought we can probably type with bank and start doing some business with them but that did not fly Obviously, banks were like, this is again an added headache on us.
00:22:57
Speaker
And there's no revenue coming in. This is not our goal. When this happened, you were totally reliant on Aadhaar for your revenue. That was the single source of revenue.
00:23:08
Speaker
um I mean, it freak you out? My business is going to die. Like, the thought must have crossed. So we always knew this business will die because the enrollment was very high. And that is where we differentiated ourselves from the others.
00:23:25
Speaker
ah The core was not always to continue with what You know, we were doing Aadhaar and the other business. The idea was to generate some bootstrapped model, get some cash flow, deploy that cash flow into the the organization which we actually wanted to build.
00:23:44
Speaker
And that is what we did. So it was always in plate. By then, luckily, we had already built a good cash flow. ah the entire organization moved from the operation driven organization to tech driven organization.
00:24:00
Speaker
And then we also got certain contracts. So, I mean, we started with Canva from there. We kept on adding more accounts. So, so slowly and... When did the Canva account come?
00:24:12
Speaker
Canva bank yourself? It was 2015. Okay.
Canara Bank's Digital Transformation
00:24:15
Speaker
And then, then what was the business you got from them? Like what was the contract on? Very small thing. I mean, convert their GPRS based bank, sorry, SMS based banking to GPRS based banking.
00:24:30
Speaker
So again, what you yeah something. and Okay. So earlier the, like I said, internet penetration was very low. The technology was not that evolved.
00:24:42
Speaker
But SMS is where you know most of the transitions were flowing. So although you had an app, but it would its backend would work on SMS.
00:24:54
Speaker
So on an encrypted message. Okay. So it's very hard to believe it, but that's how it worked initially. And then from there, moving on to, you know, ah completely internet based and, you know, scrapping the entire SMS backend. So that's what we did.
00:25:11
Speaker
ah From there, then we completely migrated to a full blown application. 50 odd services, I think 50, 56 odd services on the application. It was very new.
00:25:23
Speaker
and Okay. Okay. And then, then you pay off. So essentially, Canera's mobile banking platform, ah you kind of built that out. yeah so we are managing this for last 10 years now and it has gone through almost three evolutions so so first one which i mentioned later on we moved to microservices to ensure the scale and capacity is really great so this is something we did and then about three years back we migrated this to super app
00:25:58
Speaker
So super app is where you have the ability to consume products and services beyond your core and then give the seamless experience to the user. So you can book a flight on your mobile banking app. Yeah. So bank's core services would be your loans, FD, ARD, which I mentioned earlier, apply for a new account.
00:26:21
Speaker
But then you can also tie up with a third party who has the aggregated services around flight, which you rightly mentioned, buses, or, you know, again, you can have a direct tie up with RCP.
00:26:34
Speaker
Technically, there are multiple ways to bring them onto super app. So how beautifully we can design the solution, where in Come what may, any kind of partner, any kind of technology they may own, can we bring them seamlessly on the application? So that was the problem we were trying to solve.
00:26:52
Speaker
So that is what we did. what Can you zoom in on? You said that the first change was moving to microservices. What does that mean? What was it before? How does microservices help? What is microservices?
00:27:05
Speaker
so technical gri So now, along with payment, there is also technology a evolution. okay So initially, most of the pieces were written in monolithic architecture. That means you have like one container well to make it easier for everyone.
00:27:19
Speaker
And you put all the services inside one container. So you have, like let's say, 20 odd modules, different modules. So there is an authentication module, very authenticated.
00:27:31
Speaker
There is a transaction module where you are transacting. There is a acknowledgement module wherein you are giving the confirmation. So there can be so many different modules. So let's say 20 modules brought into one single container.
00:27:45
Speaker
Now what you can do is in microservices, you create small, small services, microservices, and each module becomes an app in itself. So earlier there was one app having all 20 modules. Now there are 20 apps.
00:28:00
Speaker
different modules. So tomorrow, let's say you want to scale so fast that your one service is about 80% of the entire transaction, which may be your, let's say, fund transfer.
00:28:11
Speaker
Now you give maximum allocation of resources to fund transfer rather than giving it to the other services, which are very just 5%, 2% of the entire volume.
00:28:24
Speaker
So what it does is if at all you want to scale horizontally, I mean, you want more utilization around few of these services. Now you are you are free to do that.
00:28:35
Speaker
In the earlier cases, you had to do it for the entire application. Now you can actually focus on those pieces which actually need scale. If you do this, then your ability to build a large and you know, a platform which has the ability to transact in millions.
00:28:56
Speaker
Now that's what you're able to build up. So today I think in Canada we are processing about 5.5 crore plus transactions every day.
00:29:06
Speaker
So we're talking about almost 50 to 60 million transactions. That's majorly because we are into microservices. So that's what we did somewhere in 2018, 2019. Now that's the industry norm which everyone has adopted. so Whenever there are smaller ticket banks, I mean, if the volume is 10 lakh odd, ah maybe for the entire month or it is just 1 lakh a day, absolutely fine. I mean, you don't need such a huge ecosystem.
00:29:35
Speaker
But wherever the the scale is higher and you have a larger aspiration that you want to bring in, let's say you are sitting on 56 services, you want to add 200 more services.
00:29:47
Speaker
You want to add multiple more users which are non-banked users, but you want to give them certain services. For them, you will build a very different story in the application.
00:29:59
Speaker
For you to have freedom around what kind of services to be built, what kind of users you're bringing in, and then the volume that you are want you're projecting for the future, you need to have a different tech stack altogether.
00:30:15
Speaker
OK. ah When NPCI brings about ah these innovations, like, say, first IMPS, then UPI, ah How do banks adopt it? and Do they have an in-house IT team or do they typically work with vendors to adopt?
00:30:31
Speaker
so ah So, you know, Akshay, so the thing is bank is this completely, so this is my belief that A bank is a regulated entity which has so much you know to do as a responsible organization and being a financial pillar of the country.
00:30:55
Speaker
ah Their focus is so much around CASA. Their focus is so much around you know managing compliance and the entire regulatory pieces. Technology is heart and core today for banks right now.
00:31:08
Speaker
However, within technology and the kind of applications which is being run, we know that the core banking solution is brought in by likes of Infrasys or, you know, TCS or, you know, Oracle.
00:31:20
Speaker
So these are the guys, you know, ah running the solution. But when it comes to certain expertise around payments, if you start building it in-house, then what may so happen is you'll have to build an organization altogether to run that particular piece.
00:31:40
Speaker
Now I'll take an example of UPI. At any given day, we do nothing less than maybe, you know, 150 odd enhancements or maybe more than that in a year.
00:31:55
Speaker
Now, if that is the kind of enhancements or that is the kind of demand a particular product has, then it is always good to have experts who not only understand technology, but who also understand the future roadmap.
00:32:09
Speaker
So in this ecosystem, NPCI has really you know done a fab job in creating an ecosystem wherein you have technology service providers who keeps doing this job, who sits between bank and NPCI.
00:32:25
Speaker
And we are one of the technology service providers. Our job is to ensure that the entire upkeep or entire effort around scaling the digital payments and achieving the technology target between banks and NPCI is met.
00:32:42
Speaker
And that's why you have an ecosystem called as technology service providers who service banks and ensure that their core components like core banking solution or these components are untouched.
00:32:54
Speaker
And there is a separate ecosystem which focuses purely on digital payment system like INPS, UPI, AAPS, you know, NETC, national, that's that's your first step.
00:33:07
Speaker
so So all of these taken together. There are organizations which will deliver those product to bank, connect it to NPCI and at the same time maintain it so that there is real time transition going on 99.99% uptime.
00:33:28
Speaker
And then at the same time, they will also ensure that whatever there is ah and but planned around future, for UPI or any of these products. They work very closely with bank and NPCI. So it takes up a lot of pain and pressure from banks.
00:33:44
Speaker
And NPCI is like a ah deciding who all are TSPs. Like you have some stamp of approval from NPCI that you are an authorized TSP. Yeah. So NPCI has NPCI partner program under which You can obviously present what kind of solution you have built. And then do you have a compliant product as per NPCI standards?
00:34:09
Speaker
So once that is proven, every single implementation goes through certification process. It's just not that you can build anything and and then deploy it. Obviously, there is a layer of customization.
00:34:21
Speaker
There is also a layer of, you know, what a customer demands, but at the same time, the core solution, which is being built, that particular solution has to go through a proper certification process.
00:34:33
Speaker
So if you can get that certified, if you can, you know, comply to the, to the switch requirements bye by bank as per NPCI, then you are one of the partners.
00:34:46
Speaker
Got it. Okay. Okay. So this, um, you know How much of what you provide to a bank is ah productized? How much is custom built for that specific bank?
00:35:01
Speaker
So when we begin the journey with any bank, almost about 85% or is productized.
00:35:13
Speaker
But as and when we go ahead, if there's a large bank or someone who has an aspiration to really build business out of it, the customization flavor goes to about 30, 40, 50% also.
00:35:25
Speaker
so this So for example, Canva, we are there since 2016 on the UPS stack. oh I would say that there's whatever we are building right now, whatever development we are doing,
00:35:41
Speaker
About 60, 70% development, oh or to be conservative, at least 50% of the development is on demand and not just around switch.
00:35:54
Speaker
Like demand from merchant, demand from branches, demand from customers, the the upgrade or the technology ah you know uplift, and then at the same time, performance, the partner ecosystem, all of that taken together.
00:36:11
Speaker
The moment we start a journey with ah one particular bank, it's a compliance switch that goes into the bank's ecosystem. And then later on, you keep on adding flavor.
00:36:23
Speaker
So depends on the journey that a bank wants. It also depends on you know the time spent on that particular search. So that's the overall journey with customization.
00:36:36
Speaker
okay Okay. So essentially what... ah most TSP's would be doing, I'm guessing, is that you have a core switch technology that switch you sell to a bank and therefore the bank can do the UPA transaction. And then you also have white-labeled offerings like a mobile banking or a loan or a FDE or those kind of white-labeled offerings which the banks can choose to adopt once they have built a relationship, built trust, etc.
00:37:04
Speaker
So this is typically the TSP model. Yeah, that's that' was the TSP model, wherein we have multiple products. UPI is core. We are working around, I mean, we are now doing a lot of development around ONDC. We are doing lot of development, not part of NPCI ecosystem, but yes, ONDC is something that we are working.
00:37:28
Speaker
ah We are also working with NBBL, NPCI Bharat Build Payment Limited. So there's a separate entity, which obviously has been built to bring in the aggregated businesses, which is like Bharat Bill Payment Services.
00:37:42
Speaker
So that's something that we have built ah as a switch vendor to bank. And then we are also oh you know building certain stories around the corporate payments, which will work on BBPS ecosystem.
00:37:57
Speaker
There was this requirement around RBI's online dispute resolution, which has to be interoperable, I mean, multi-channel. So that is also something that we have built. So there are a lot of such products as a technology partner we provide to bank, which are around payments and then then gets customized beyond certain ah you know duration or certain aspects.
00:38:22
Speaker
Okay. um I want to zoom in on some of these. ah Let's start first with UPI. ah what is ah like What was the innovation of UPI? How how is it different from IMPS?
00:38:36
Speaker
I mean, just imagine that you know you are and a smartphone era. You do a shopping on a particular website. You go there, you shop, and then you make a payment through an EFT.
00:38:49
Speaker
And then you wait for another day. to check whether the payment has been successfully credited. And then ah the transaction would you know proceed.
00:39:01
Speaker
Today there are like, I don't have the actual count of e-com business, but per day there would be crores of transactions happening. Imagine if all of this settlement happens on NEFT and imagine if you know all the consumers who are buying online are given only an option to do it on NEFT and RTGS.
00:39:23
Speaker
We will never be able to scale the kind of business this India or the economy this country needs. hey So for for this, it is important that we understand that there are certain challenges because of which the IMPS came into picture. So, IMPS became 24 by 7 product and then at the same time the response time was like in seconds.
00:39:46
Speaker
I remember that you know the question coming around can we respond milliseconds. So, ideally if the response is within 10 seconds, 2-3 seconds, it serves the purpose of the online you know the requirements.
00:40:00
Speaker
now E-com is one use case. We are talking about services. We are talking about government payments. We are talking about so many transactions today, which is not just on internet banking, but also on your, you know, payment gateways.
00:40:18
Speaker
Now for payment gateway or something like a mobile banking solution to work, the entire solution was built on a very closed loop model. Okay. IMPS is interoperable.
00:40:30
Speaker
In fact, the The entire solution is created in such a way that, you know, all the banks can transact and there can be a settlement happening the very next day.
00:40:41
Speaker
But the transaction is executed today. So that's the entire journey. So a merchant may get money next day, but your amount is debited.
00:40:52
Speaker
The success is confirmed. And then merchant is very clear that I will get this fund. then they have a very clear understanding around that so they will obviously deliver service even before the settlement is done so that's how the imps works and then imagine that the imps works only on your mobile app so you have an icc account and then you have to transact on imps so you need to open your imobile and from there you use imps and make fund transfer to your friend
00:41:28
Speaker
ah For which first you have to add a beneficiary. and You have to add a beneficiary. It's cumbersome. Yeah, you have to download an app. You have to add a beneficiary. Can you go to... Now you're using some other bank app also or you're using maybe some other different ah instrument, okay? do Can you use ICSA account from that particular application and make one transfer to your friend?
00:41:54
Speaker
No, that's not possible. That's where the restrictions were. Second challenge IMPS was a push transition. That means you are making a payment to your customer, but, sorry, your merchant, but does merchant have an ability to request for the payment?
00:42:14
Speaker
That was also completely missing. So there was in fact, a thought around bringing M2P as a payment channel. In fact, it existed in IMPS. We have P2P, which is person to person transaction, peer to peer.
00:42:29
Speaker
So I make a transaction to you. That's P2P. If I make a payment to, let's say, Flipkart, then that's a P2M merchant transaction.
00:42:40
Speaker
ah There was a thought around M2P. So merchant to person. So that's what was being done. But ultimately what question came to mind was, you know how exactly we are going to scale further beyond this particular ecosystem.
00:42:59
Speaker
And that is where the and the discussion happened around, why do we need account IFSC? Account IFSC exists for any bank as an identifier, right?
00:43:11
Speaker
But that's also the the the number sitting inside core banking solution. Why do we need that? Why can't there be a different identifier? So why don't I have Deepak as an identifier? Why i don't I have Akshay as an identifier?
00:43:26
Speaker
And can we also, the interoperability inside exists, but can we also create an interoperability around the application? So why not do an ICIC account transaction through a third party application?
00:43:41
Speaker
Why not do an SDFC or SBA transaction through a different application? So that was also the question mark. So that is where the restrictions were, lot of restrictions initially. And then when UPI came in, obviously IMPS,
00:43:56
Speaker
was the ah not just test bed, but also the fundamental product available basis with the UPI evolution happened.
00:44:08
Speaker
However, when it moved on, use cases were so strong that UPI today is no more a payment instrument, but it in itself is an ecosystem which has multiple payment instruments.
00:44:21
Speaker
when i talk to lot of guys i clearly say that you know don't consider upi as a payment channel consider that upi has become an ecosystem which has multiple payment channels you begin with account ifsc as a transaction Then you have prepaid instruments.
00:44:38
Speaker
Then you have credit cards. And then imagine we are also talking about credit lending, and using overdraft as an option to make a payment. So it has covered all the spectrum of the payment instruments. So that's that's the beauty of the product which has been.
00:44:55
Speaker
so Why did banks get on board?
Fintechs as Partners to Banks
00:45:00
Speaker
Ike? imagine a bank could feel like, I don't want my customer to use any other app.
00:45:07
Speaker
I want him to stay in my own app. Why should my customer use Google Pay, Did that happen?
00:45:25
Speaker
So, there was lot of effort by banks. I think there was one Bheem app or something also, right? No, no. So, Bheem was later. So, I'll tell you.
00:45:36
Speaker
So, all the banks who were brought into UPI ecosystem, they launched separate app. So, almost every bank had a UPI app.
00:45:47
Speaker
So later on, it was very taxing and difficult to manage the application because you see, ah ultimately, it's an interoperable ecosystem.
00:45:58
Speaker
A bank is launching a separate application where the user is transacting from their bank account. Plus, they're able to add other bank also in the same application transacting from that app also. So there's a story is both the ways.
00:46:12
Speaker
A, why will banks, so back to your question, why will bank allow ah ah someone like Google Pay, Phone Pay to transact from their application. But if you're not part of the ecosystem, then you will be out of the ecosystem and users will not be using your bank account.
00:46:32
Speaker
So the entire decision moved towards customer, not with bank. The decision makers were us. We decided who are better service providers to us.
00:46:44
Speaker
Who can actually listen to my problem statement? Where can I lay my trust and still own a bank account where I want to? Now, this is a win-win for everyone.
00:46:55
Speaker
I mean, you cannot expect that banks will will burn cash the way fintechs do because fintechs have a larger vision building the payment ecosystem.
00:47:07
Speaker
Banks have a larger vision around building the entire financial ecosystem. Now there you're talking about loans, you're talking about you know deposits, you have your balance sheet on asset and liability.
00:47:21
Speaker
Here we are talking about solving merchant problem, solving customer problem, creating user stories, and then generating and revenue, a better business model around it.
00:47:33
Speaker
Both are completely different. Once this is understood, so fundamentally this understanding has to be created. So the moment you have this understanding, everyone everyone are very clear who has an important role to play.
00:47:45
Speaker
around payment, who has an important role to play around financial services and where exactly someone has to contribute. So all of that is well understood now. So I don't think fintechs are considered as competition to bank, but it is well understood by banks that for us to also scale, if we have fintech partners with us, then for sure ah ah you know, penetration in certain businesses which they are driving will be larger.
00:48:16
Speaker
And fintechs have realized that the licenses remain with bank. That is where, a you know, regulator is comfortable with. So we have to work very closely with bank and we have to create completely new use cases and solve certain problems in the market. So that's how it works.
00:48:34
Speaker
Okay. Okay. Fascinating. what you're saying is that because there was so much customer adoption, so banks had no choice. They either adopt or they lose the cash which customers keep in the bank. Because banks earn a lot of money purely by virtue of customers leaving their cash in the account.
00:48:52
Speaker
Like savings account hardly has any interest rate. So you want... Absolutely. imagine that you're raising fund. I mean, fixed deposit is nothing but raising fund, right? Which you deploy as loan.
00:49:04
Speaker
So you're raising fund, you're paying I don't know what would be the interest rate right now. 6.578% on. And now you have fund in bank in a current account or savings account. What is the interest you're paying?
00:49:18
Speaker
Hardly any. it is almost diminished. So, so that's, that's the gap. So the fundraise at six to 7% versus balance in the account, which is you're paying your cost. Maybe, I don't know what percentage, I don't want to go wrong figure, but if at all, let's say the cost for the sake of this conversation is 2%, 3%, you're still saving those three to 4%.
00:49:44
Speaker
That's how it would work. And then when you type, so very interesting case now. So someone like a large payment aggregators, you know, those who transact thousands of crores every day and settle about thousands of crores every day.
00:50:02
Speaker
What if you get that 1000 crore in your bank account as an overnight deposit? So that is where banks get an advantage to tap with such kind of fintech partners.
00:50:14
Speaker
So getting that 1000 crore of an overnight float further gives you an added advantage of saving against what you would be paying for, you know, FDs or RDs.
00:50:28
Speaker
So that's how it would work. So that is one use case where banks and fintechs can work together. The other problem is... you know, you have ERP requirements.
00:50:40
Speaker
Let's say they're about, you know, 7,000 or let's say I'm just throwing a number. Large bank may have about 1 lakh odd schools and, you know, let's say schools.
00:50:55
Speaker
ah You hold those accounts. Okay. But they're using some other product for collecting fees. and then it comes to your account. Imagine if that fees comes to you after one day, but if a bank ties up with an ERP partner and then says that i will back you, you give ERP to all my schools, whoever has account in my you know in in in my bank.
00:51:25
Speaker
So can we empower them? So now you're giving end-to-end service to a school from a bank Very interesting. for the product, which is not built by a bank, where their focus is to ensure that they are getting funds in their account.
00:51:41
Speaker
And ERP's focus is to generate revenue from the services. o That's the case. Okay. Okay. Fascinating. ah There was this, ah ah Mark Andreessen said, software is eating the world. ah You know, I think now it's more like fintech is eating software because for a lot of software, the monetization is fintech.
00:52:04
Speaker
i That's because that's the there's the end transaction, right? You do anything, anything you do, ultimately it will convert into a transaction. And when it converts into a transaction, you use payment ecosystem.
00:52:19
Speaker
So FinTech is in position to solve that problem. When you do shopping, you buy ticket, you pay for government services, ah you make online payment or you make offline payment.
00:52:33
Speaker
ah You... You travel abroad, whatever you do. ah Ultimately, it is a transition. Anything you do, except for non-financial transition, wherein, which also leads to a financial transition. So you do a balance inquiry or you check what is the fund available in account, obviously.
00:52:51
Speaker
And then from there, you make a decision what exactly you want to do with this fund. You want to invest? You want to loan it to your friend or, you know, that kind of decision is being taken.
00:53:02
Speaker
so either there are financial transitions or there are non-financial transitions creating decisions for financial transition so that's how the entire journey is so if that's the case when you so in fact within fintech there is paytech so you have payment technologies which will obviously drive and innovate how the payment works seamlessly, and then what more use cases and what more problems can be solved.
00:53:30
Speaker
Over pay tech, you have ecosystem that can be built by fintech. Now, this is where you have, ah you know, multiple ah ideas and lot of innovative thoughts coming in.
00:53:45
Speaker
What if there is an auto pay as a payment product? Okay. Let's say there is an auto pay wherein you are creating a subscription based collection. All right. So Enash. So over Enash comes UPI AutoPay.
00:54:00
Speaker
What if you create a solution for solving the problems around the subscription, which has auto pay in it? Now in this entire system, you have payment technology, but on top of that, you have fintech.
00:54:14
Speaker
And there's no bank here. Only when the auto pay needs to connect to a bank ecosystem is where the bank will come. So bank continues to focus on building, ramping up their assets and liabilities.
00:54:29
Speaker
And then you have payment technologies building the layer. And on top of that, you have FinTech, which is actually creating the use cases. that's That's how the ecosystem would go. Okay. Okay.
UPI's Success and Global Expansion
00:54:40
Speaker
Why is UPI such a unique thing in the world. I haven't heard of a similar success in any other country. Did India just get lucky or is it the... yeah You must have heard this, that ah India skipped over the landline ah generation.
00:55:00
Speaker
ah India never had much landlines. It straight away jumped into mobile. So ya your disadvantage becomes an advantage in a different time. Is that something like that happened the So I don't know how much I should speak about this, but I have a very interesting analysis around this.
00:55:19
Speaker
ah
00:55:23
Speaker
So we were in paper currency era long back, right? And then you have this you had Britishers who left English India.
00:55:36
Speaker
And obviously we adopted that. It was not because we had, obviously, with the kind of, you know, skill set we have since beginning, the kind of work that we do.
00:55:52
Speaker
i mean, are let's say two generations back, these guys and believed in, you know, you should study hard. You should really, you know, have some degree with you.
00:56:03
Speaker
ah So consider that you have language with you and then you have skillsets with you, which is brought in by your parents. You have to ensure that you do your engineering well.
00:56:15
Speaker
You have to ensure that you you do your stuff well. And then you have a country which is sitting on a low cost labor, speaks the same language and has an ability to code.
00:56:30
Speaker
And they've gone to colleges and there is no jobs. So what do you get out of it? You get a great opportunity to build your softwares and solutions in this country.
00:56:42
Speaker
And that is where, you know, I feel that the entire software journey is a combination of those 60, 70 years, which, you know, the country has gone through.
00:56:53
Speaker
Uh, and then, uh, Then I go back to the same point when this journey was going on. You had paper currency in the beginning. Then came your ah your plastic money.
00:57:08
Speaker
obviously the evolution would move from, you know, paper to plastic. And then all the banks, same thought, if you go and read Visa Master's story, all the banks come together and say that, you know, and the transitions are increasing. There's huge requirement around how the money should be stored.
00:57:27
Speaker
And we don't think we can keep Anyone can keep, you know, dollars or, you know, such currencies with them for a very long time in their pocket. Can we get a secured system?
00:57:38
Speaker
And that is where the plastic card came. So Visa, Master, all of that. And then my belief is that wherever you had U.S. going with relations, plastic card always followed them.
00:57:56
Speaker
And then the entire world obviously started using cards. And then we also started moving to cards. So now there's a combination that there is a story of evolution from paper to cards.
00:58:10
Speaker
And then you have engineers and then you have software developers and then you have English running with you. you have got great thinkers around here. So you have the evolution globally going on. And then parallel, you have all these guys sitting in RBI, you guys sitting in government who are way too concerned. So hats off to all those visionaries who never let both the financial pillow of this country to the wrong hands.
00:58:38
Speaker
I mean, you always had you always had RBI taking decision around the currencies, taking decision around the monetary policies and government was taking decision around the government policies.
00:58:54
Speaker
So you always had that great institutions working in parallel. So the decision around monetary policy, the decision around evolution was being taken by the regulator.
00:59:05
Speaker
Now this structure over the last 70 years allowed them to build something like NPCI, allowed them to you know bring in a very strong ecosystem around banks to move from physical to digital transactions.
00:59:21
Speaker
Now you have the evolution story around money. You have the great minds available in this country, which has evolved over last, you know, 20, 30 years of software journey.
00:59:33
Speaker
And then you have regulator who has complete control over monetary policies. And then you have government who is pushing everything to create a great economy. Now, if you have such a combination,
00:59:45
Speaker
then for sure it becomes ah you know an opportunity for people sitting inside and building a story like UPI. So I would say that there's a lot which has happened to arrive at UPI.
01:00:00
Speaker
And then the moment you arrive at UPI, you realize that people were trying to solve the problem. So again, it is an evolution. 2010 IMPS happened, 2016 is you when UPI happened.
01:00:14
Speaker
But actually the story started picking up in 2017, 2018. IMPS, we were trying to build M2P. which is merchant to payment system. Now, because you did not have the ability to do merchant to payment ah ecosystem and evolve that in IMPS, you had to build a separate instrument.
01:00:34
Speaker
And that is where unified payment instrument came into picture. then When you have freedom to choose the application. so So again, it's an evolution, right?
01:00:46
Speaker
You are going through a mobile banking journey. And you have a captive nature of entry into ah digital payments. From there you're moving to, you know, ah to, ah after solving the problem, if my instrument is interoperable, why not my users get a choice?
01:01:06
Speaker
Why do I need a account IFSC? Why not have UPID? So all these questions were brought in by the earlier instrument. It was not an overnight thinking.
01:01:18
Speaker
So all of this taken together, obviously you have UPI. So I say that, so from paper to plastic, obviously you have US who led the entire you know evolution.
01:01:32
Speaker
And then you have China who came up with UnionPay. Obviously, they also wanted to move globally. But union pay? Union Just like Rupee, you have their own payment, interoperable payment ah system.
01:01:50
Speaker
So China, the moment they were you know they got strong with their economy, they decided that with my relations, why not you know there can be such kind of product which ah US had?
01:02:02
Speaker
But while all of these were going on, there was this this innovation and there was this aspiration which was built in India. And it was so quick. It was so quick.
01:02:13
Speaker
There was no time for others to think to build such kind of product. So i mean I would say the nature of the product was brought in to solve the problem of larger masses, to solve the problem in the system.
01:02:27
Speaker
I mean, imagine if you need a pause of 10,000 rupees to accept the payment at a small Panta pre-shop or at a small Kirana, how will it work?
01:02:41
Speaker
So it is either a cost on a merchant or cost on a bank. So how do we solve that problem? Do we have a unique QR code system? You just need to scan and make a payment.
01:02:53
Speaker
So it was about solving that particular problem. So the moment you did that, your penetration was very high. So a digital payment to work, you really need to have a great acceptance ecosystem.
01:03:06
Speaker
And the moment you bring that acceptance cost from 10,000 rupees to one rupee, your penetration is very high, isn't it? So that's how it works. so the The fact that India had ah strong independent regulator and a government push towards growth and ah talented workforce ah knowledgeable in English and software is not unique to India.
01:03:33
Speaker
I mean, there are lot of countries which have this, right? Western countries. ah Still, ah is it that India didn't have enough plastic? like Whereas in the West, the problem didn't exist because everyone had a cart.
01:03:46
Speaker
But in India... That was not the case. Plus, as you said, the cost of the POS machine, um maybe the fact that India needed an affordable solution.
01:03:57
Speaker
So, i you know, actually, I believe that, ah of course, every there this kind of force, I mean, workforce, this kind of ah ability to, you know, around software and all, exists globally.
01:04:13
Speaker
But we were the early adopters. we actually started long back, whereas others started later. so So we have moved up the value chain. If you see, we are not just building, we are not just doing services. We are also bought into product.
01:04:32
Speaker
We are also bought into you know data centers. We are also bought into knowledge-based services. So And we are also in fact part of certain R&D and the innovation labs for global companies.
01:04:46
Speaker
That is because we were early adopters and we have moved up this value chain, which I just spoke right now. So I would say that, you know, ah how quickly we got into this particular ecosystem.
01:05:00
Speaker
Secondly, the policies and the needs of the masses that has to be well taken care of. Even if there is workforce available, similar workforce available in other countries, but what kind of progressive policies you have and what kind of problem you want to solve and what is your intent?
01:05:20
Speaker
That makes lot of difference. So, or else you have world's greatest oil reserve and you're still going to enjoy that. That is also possible. So it's it's not it's not just about you know the talent pool, but it is also policies that play a very, very important role.
01:05:41
Speaker
I mean, why would a regulator take a pain to talk to all the banks and say, why don't you all come together and pull in to create a real-time payment ecosystem?
01:05:53
Speaker
ah you think You participate into it. I was just saying that maybe the right way is to look at... the real innovation is IMPS. UPI is IMPS version 2.
01:06:04
Speaker
Like, IMPS was what really spurred the innovation and a better version of IMPS is what UPI... IMPS is something which... and So, IMPS was the first one to make 24 by 7 payment and, you know, respond within seconds.
01:06:20
Speaker
So, that's obviously you're right. And I agree to your fact that it's a trigger. That's fair. But, you know... ah nothing to take away from UPI because it's so unique and it goes way beyond the thinking what IMPS had.
01:06:39
Speaker
Majorly because you see IMPS was focused on account based transactions which money residing in your account But going to a level where you understand the ecosystem or you build a flexibility so well that today you are transiting your credit card payments on a mobile app by scan and pay on a QR code.
01:07:05
Speaker
Now, isn't that a great way to think about? i mean, you don't need a credit card, plastic card today. in your phone i mean in your wallet.
01:07:16
Speaker
You just need to scan your credit card on a QR code. And that's ah that's a very interesting way to mention about UPI, how it is going to be.
01:07:27
Speaker
So how much does UPI cost the economy? And how much money does UPI make for the economy? Because as far as I know, there is no, but there's a very negligible way to monetize upi like say visa and mastercard they charge one to two percent fees for being the pipes and enabling the transaction to flow through but upi is free for most transactions uh so you know what what is the pnl statement of upi uh so i would slightly differ in this uh yeah so one thing is i agree with the fact that
01:08:10
Speaker
um you know there's a lot of bleed because upi does not have mdr obviously mdr is a merchant discount merchant discount rate i mean that you means that there's a fee charged too right there's a fee so for every transaction there's a fee which gets charged to a merchant merchant takes a decision whether they want to get it from their customer or they will pay from their pocket many at times MDR is embedded into the the price, MRP, which is, let's say your MDR is 2%. So your overall cost of product will entail certain cost, 2% cost around MDR. So if at all, you're making a payment to credit card.
01:08:57
Speaker
uh one best case is you go to a smaller i mean i have experienced this you have go to a smaller jewelry store and there you flash your credit card they will say upfront give me will charge two percent extra that's because they have to pay that it's not embedded there so uh yeah so uh back to your question so of course uh uh you know but there's a bleed in in the in the Overall investment that one in has to do overall. in How much is the bleed? like How much would a bank be investing? I don't think i can i can have the right number with me. I don't even have the number. things i can okay and
01:09:38
Speaker
It's very difficult, Akshay, because it differs. Like I said, it depends on bank how they want to take UPI as a case. For example, there is a bank with which we are working.
01:09:53
Speaker
they have built the ecosystem such that they can consume, I mean, they can consume the services, UPI services, and they can they can expose it to their customers, mobile banking customers, or, you know, any other customer, wherever they can expose UPI.
01:10:12
Speaker
or they can expose the services to merchants who can open bank account here or they can expose the services to government entity and yeah and get those funds also here so that so it's up to them how they want to explore this now here the calculation is that you cannot charge mdr but at the same time you because you cannot charge mdr You are compelled to innovate and you're compelled to build different models via which you can generate revenue.
01:10:48
Speaker
You can generate a value added services or you can generate, you can, you can deal, you can solve certain problem. Give me some examples. Riding on UPI. So, uh, Like I mentioned about yeah ERP. Okay. So we were thinking, um so we are planning to launch this. and in As in you have this typical case of jewelry stores wherein ah I don't have the right percentage with me, but let's say one third of their entire sale happens through monthly collections.
01:11:18
Speaker
So if you go buy something and then they will ask you to, why don't you pay 2000 per month? paid for 11 months, 12 months will pay from our pocket. It is nothing but 8% additional over your payment. That IT system. Yep.
01:11:31
Speaker
yeah So, yeah. So, 22,000 becomes 24,000 and then you buy the product. So, that's a great way to, you know, increase your sales. yeah But you do not have... Savings product also for like an informal savings product.
01:11:45
Speaker
Yeah. You get, let's say, 8% all interest rate and then you buy gold. So, which you can save for long term. now in this case it is do we have the product ah do we have the auto pay facility on the spot wherein while buying the you know this particular scheme you can pick up your phone and you can allow the user to you know approve it and make the payment.
01:12:13
Speaker
It's not Nash, right? Where you need a ah scan copy of your check. What will you do then? if Can you open the scheme? No. Then he will go back home. Then he will come back. Or he will you know ask for the photocopy from home.
01:12:29
Speaker
Give it to me on image. And then you do So you don't do Nash here. You need to have something which is real-time. And you create a real-time autopay. Now, can we solve that problem? Nash is N-E-C-H, which allows you to, so that's a different product altogether, which allows you to ah create a frequency, yeah, a proper frequency, when exactly the debit can happen, what amount to be debited. So it creates that subscription-based model on it.
01:13:00
Speaker
Now, a UPI allows you to do auto pay real-time on the UPI ID that you have. On top of this, if I built a certain solution which solves that problem around customer engagement, customer acquisition, it allows them to you know build certain use cases around discounts, around new schemes, and give that product to the general store.
01:13:23
Speaker
This guy will be happy to pay me a convenience fees of 10 rupees because have helped him with all those solutions. They'll not pay me for the MDR. He'll definitely pay me for for the onboarding process, for the hosted application for which I'm spending on Infra.
01:13:43
Speaker
He'll pay me for creating discounts. He'll pay me for the promotion that i that he's using from my application. So that is how yougen you you start building the product.
01:13:54
Speaker
So I would say that scarcity is the mother of innovation, right? We know that, right? So now because there is no MDR, you'll find all the FinTech, PayTank running behind such use cases and trying to, you know, create the solution.
01:14:09
Speaker
So that's about one piece. The second piece is how do we solve the problem for banks and how do we solve the problems for these guys? So can there be a reconciliation system wherein you bring down the manual efforts and make it automated?
01:14:26
Speaker
so your your cost towards recon goes down from let's say if it is about 50 peso goes down to let's say uh seven paise or eight paise at least you're bringing down the cost so you'll be ready to pay that pay for that rather than paying 50 peso so there again and so either you bring down the cost or you generate certain model wherein the revenue can be created So this is possible on UPI right now because UPI is almost about, let's say, 78% I don't know the latest number, but 78% of the total digital volume in the country.
Future of Digital Payments: Currency and Beyond
01:15:03
Speaker
And if that's the touch point, I mean, every eight out of 10 transactions are on UPI, you have to bring products and services on UPI, then you survive.
01:15:14
Speaker
So that's the story so far. ah Is cash dead? No, not at all. In fact, it will still take more time and it will still take more products and innovation to happen.
01:15:32
Speaker
RBI came up with a digital currency concept. The idea is how to see if if the cash is not dead, then ah then can we create a digital cash?
01:15:43
Speaker
ah digital currency is about converting your paper currency into a digital currency so in upi you are actually transacting from account to account you are not keeping currency in your wallet so you use your account number to transfer fund into your account number so it has gone from from you know sbi to canra bank okay but in digital currency you actually go to your bank account but withdraw the money, keep it on your phone.
01:16:16
Speaker
That money does not remain in bank. It is on your phone. but that's and So so much effort going on to you know reduce the cash exposure in the in the system.
01:16:29
Speaker
And for that, there are much more such innovations to be brought in. So now the question is, can we transact digital currency offline? then it's very near to be be cash the cache. And then... it also give how anonymity?
01:16:49
Speaker
Like one of the things with cache anonymity, right? Traceability. it will give you traceability. It's not anonymous. So it can be traded. It's a blockchain technology.
01:17:01
Speaker
So again, it makes no sense for the regulator to ah you know build something which is ah which cannot solve the current problem.
01:17:12
Speaker
If there is anonymity, and people want to maintain it, cash will stay there wherever such needs exist. And wherever there is no challenge with traceability, use it.
01:17:26
Speaker
Use digital currency. Okay. Okay. Fascinating. um So, you know, this, ah how is UPI going global? ah Because so far, it's basically, NPCI is like consortium of Indian banks. And so, there Indian banks who are ah doing the settlement between each other. ah But I also read about UPI going global. How is that happening?
01:17:50
Speaker
so ah So, obviously, I'll not not get into the policy level discussion what RBI and PCI are doing with other. They might be doing some stuff.
01:18:03
Speaker
I can actually tell you the UPI global journey. So for sure, when you go to other banks, like I said earlier, also US, China, they, you know, there are countries who have tried to take their product globally with their relation.
01:18:22
Speaker
Similarly, you have Rupe and UPI going globally. Okay, with our relation, wherever we can, wherever it is possible. And then obviously the adoption would happen.
01:18:33
Speaker
So that's that's the thought under which UPI Global also comes into picture. Now, in UPI Global, the first problem that we solve that are trying to solve here is Indians abroad, ah they cannot transact India.
01:18:53
Speaker
I mean, ah when they come to India. Or they cannot transit sitting outside for any Indian payments. Okay.
01:19:04
Speaker
Can we solve that problem? That's a quick thing to do. Right? So, ah so the first thing was bringing 18 odd countries, I guess, on UK international platform and wherever there are NRE, NRO accounts.
01:19:21
Speaker
which are not a normal accounts in India. So your NRIs and all those guys holding a account in any of the Indian bank, they should be able to use UPI. They should be able to use that particular account and make a utility payment or education fee or make fund transfer to family.
01:19:39
Speaker
You know, those kinds of transactions, can we get those transactions on the UPI platform? And it's a very big use case. Indian diaspora is really big.
01:19:50
Speaker
ah The fund flow is very big. So if at all we do this, then obviously banks from India who have branches outside, obviously they will get empowered and other banks, if at all they have ah accounts of Indian diaspora, they can also think about being part of the UK ecosystem.
01:20:12
Speaker
because that's where the transition is. So again, it goes back to the customer. If the customer is strong, then obviously the supplier will ensure that, you know, your product, your customization, your tweaking is everything as per their demand.
01:20:25
Speaker
So that that's the first step. Second step is, can we be part of the the local growth story? For that, if you partner with, let's say, if UPI goes to a certain country, let's say an African country, and there the economy is growing, and obviously there is a need for digital payment as a stack.
01:20:50
Speaker
So can we come in and help you with your digital story? So you don't have to re-innovate. You don't have to redo everything. What we have been doing for last maybe 20, 25 years.
01:21:02
Speaker
so so So we bring all of that to you. So there's a great amount of respect towards India's regulator in the global forum.
01:21:14
Speaker
All these countries consider ah you know but us as as guys who have solved problems for masses.
01:21:25
Speaker
have not built problem ah We have not built solution to solve a problem around ah how to keep the currency in my wallet. we have We have solved the problem around how do I penetrate in rural masses?
01:21:39
Speaker
How do I ensure that bank accounts reach everywhere, you know wherever possible? So the vision of the government is, you know ah you you see JAM, right?
01:21:50
Speaker
Chandan, Aadhaar, Mobile. That I believe is the biggest infrastructure a story globally, which has brought India here.
01:22:01
Speaker
I mean, if today we are 40%, more than 40% of the global digital payment is all because of this. So there is Jandan, there is Aadhaar and there is mobile. Jandan is the account opening drive. Is is the is the account.
01:22:16
Speaker
Ideally free account. I mean, you don't have to keep deposit. So you have to see first you should have a Jandana account. What kind of technology or what kind of policy can be brought into to make Jandana success?
01:22:29
Speaker
Then you have identity of an individual irrespective of yeah what kind of time, whatever you own. You should have your identity with biometric. And then do you have a mobile phone?
01:22:42
Speaker
If you have a smartphone, fine. If not, we will still create a solution for the feature phone. So if this three combination is taken, jammed, then for sure we are laying a very strong infrastructure, which is not visible, but very strong in infrastructure in the country.
01:23:00
Speaker
Now, that is and not technology decision. It's policy. Now, when you go global and you have such kind of thought with you, you have a lot of respect.
01:23:13
Speaker
you know That is where if NPCI goes global, for sure, ah UPI as an instrument or RUPI as an instrument, we are either trying to solve the problem around the customers that we currently own, Indian diaspora, or we solve the problem of the nation where we are working together.
01:23:35
Speaker
and then If so, then what exactly can we do to move beyond the Indian diaspora? So that's that's how the journey has to And that is what is being done.
01:23:47
Speaker
What is the account aggregator framework? Is this also an NPCI? ah No. and So, yeah. So ah i'll I'll answer this with a use case. So you have, ah let's say you're applying for a loan in HDFC and you have an account in Access Bank.
01:24:07
Speaker
So now you need, you'll ask for huge collateral. Okay. You'll ask bank statements, collateral or you'll ask for whatever details you need.
01:24:22
Speaker
ah ah customer may take two weeks, three weeks to bring those documents. But ultimately it is a bank statement lying in excess bank, which is an SDFC bank needs. What if SDFC bank takes a consent from the customer that I can pull this bank statement from Exis Bank?
01:24:38
Speaker
If the customer has given the consent, then it's sitting on the and the desk right there of the loan, the guy who's processing the loan. And it gives the consent, goes online and from account aggregator model, if it is linked to his system, can pull the statement from Exis Bank and we can process the loan.
01:25:01
Speaker
So account aggregator is about how do we aggregate the banking ah services? How do we aggregate those documents or you know those products ah which is required within the banking ecosystem or or even the fintech ecosystem? How can we...
01:25:23
Speaker
use that. So if at all there is a use case wherein you need multiple bank statements to predict the the capability of the user to make a payment towards loan, then you don't have to go to multiple banks or multiple credit card entities.
01:25:41
Speaker
just go to one single spot and you get everything. That's the contact aggregator. Not with NPCI. It's a separate product altogether. Who's behind the product? oh I'm sorry, I don't know. But obviously, this is also an RBI initiative.
01:25:58
Speaker
Okay, okay, okay. ah But this hasn't taken off, right? Not exactly. ah yeah Are you involved in that? Like, are you a TSP for that?
01:26:09
Speaker
So, we decided to get into account aggregation long back. Apply for it and become one of the aggregator. Is it possible? I mean, we were just thinking around that. But I guess we were not qualified that time.
01:26:22
Speaker
And then secondly, the UPS story happened. So we never got time to go back to the account aggregation. So why did it take off? I mean, it's a powerful use case, right? Like basically data sharing.
01:26:39
Speaker
One is data sharing. We also have to think oh how how is it evolved? How has it evolved or or what else is required for it to become a success?
01:26:53
Speaker
So do we have a lending ecosystem strong enough or do we have ah you know but the the use cases where ah account aggregator can become feeder?
01:27:06
Speaker
Okay. And if account aggregator has to become a feeder, then the story down the line has to be strong. So I believe that account statement was one of the strong product for sure in the in the aggregation side.
01:27:23
Speaker
ah But at the same time, ah you know i think there are a lot of problem which was being solved by the lenders. Further, ah the use cases around account aggregation were not very strong. Or I would say ah we did not come across such kind of requirement.
01:27:47
Speaker
Where do we use it exactly? So the story which I mentioned about have pulling out the account statement beyond this what? Where exactly is it needed?
01:27:58
Speaker
So those were limited. Second, I believe, ah digital lending and, you know, bringing on the journey for processing a loan from about, let's say, 15 days to about two days or three days.
01:28:21
Speaker
So that is still going on. It's still not done. So that is still going on. So not all banks are still in a position to, you know, execute loan ASAP or There are some beautiful products around, you know, pre-approved loan ah basis, the statement, but these are all ETV.
01:28:41
Speaker
I mean, I have access to my ETV is existing to bank customer. ah So I have an account in ICSA. ICSA is in a good position to actually identify what kind of pre-approved loan I can give.
01:28:54
Speaker
So that's again where, you know, you don't need account aggregation. But at the same time, if at all, there are larger stories available around it, which can you know ah push such kind of product.
01:29:08
Speaker
So I think it will take a shape going forward. But now it is limited. At the same time, you have this ULI, which has been launched, Unified Lending Interface.
01:29:21
Speaker
Okay. so I haven't heard about that. Again, what problem it is trying to solve? It is trying to solve the problem around lending. so ah but I think it's a inspired, right? ULI. Yeah, it looks like UPI inspired, but it's not like that.
01:29:39
Speaker
It is again a feeder to ensure that the loan is processed ah quickly and all the problems around loan processing is managed. So all the APIs required to take decision around lending will be available at once one one place.
01:29:57
Speaker
And then let's say you have to give an agriculture loan. Now the data around agriculture loan or the users around the data around those users is very limited.
01:30:12
Speaker
So what happens ah i is for the primary sector lending, there is a target. And to achieve this target, you need to go to, you know, ah primary sector around farming, you know, fisheries, you know, all these segment sectors.
01:30:33
Speaker
ah we isma ah If at all the data around account aggregation, bank statement, made data it ma any which can help you take a decision, then what will you do?
01:30:44
Speaker
Then you go to Kisan credit card. Then you go to some other instruments like his its personal records, which can make you take such decision.
01:30:55
Speaker
So those are some kind of data available with, you know, ULI, which banks can take an advantage and process the loads. So, I think it's a duplicate, la ri me but I don't know how it will pan out.
01:31:10
Speaker
And you realize by whom? Again, RBI initiative. Okay. Our regulator is very progressive. I think maybe the reason for account aggregator not taking off is the customer demand would be very minimal, right? As a customer, you take a loan once in two, three years. It's not a regular thing. Whereas payments you do every day. So, maybe the ah so maybe the Demand from customers is not there to really push banks. Like like you said, you know if customers demand it, then banks will have to adopt it.
01:31:43
Speaker
Okay, interesting. So you also mentioned about NBBL, BBPS. What are these? NBBL is, you know, but so just around payment, you you create interoperability in payment.
01:31:59
Speaker
ah There was an interoperability around... MBBL is but an an NPCI product. Yeah, it's ah it's an entity, in fact. Oh, it's a... Okay.
01:32:11
Speaker
NPCI Bharat Bill Payment Limited, not NASH. Okay. It is NPCI Bharat Bill Payment Limited. So it's a subsidiary of NPCI. It's a subsidiary, correct. ah Okay.
01:32:22
Speaker
So, NBBL is... ah Okay. So, ah what they do is beyond... So, UPI, INPS, APS, these are all payment instruments.
01:32:35
Speaker
ah and it And there is an interoperability around payment. NBBL creates an interoperability between billers and the customer. So, you go to any application.
01:32:46
Speaker
You go to Google Pay, you go to Phone Pay, or you go to... a local application. Now these guys can consume the services. All the billers will be made available in one single application.
01:33:00
Speaker
So you don't have to go to 500 different billers and bring them on the platform. NPCI does it for you or NBBL does it for you. So NBBL will create a system in such a way that there will be operating units. So there is a biller operating unit and there is a customer operating unit.
01:33:17
Speaker
so So let's say one bank decides that I will get maximum billers on my platform. Now, electricity bills, gas, or you know even societies, they can all become part of the biller ecosystem.
01:33:32
Speaker
And on the other side, customer operating unit. Now there, they can extend the APIs to someone like Google Pay, Phone Pay. So in the entire ecosystem, if there are, let's say, 10 different banks who have 100 different billers, for Google Pay, you will have all those 100 billers in their application without even going to each of those 100 billers.
01:33:57
Speaker
So that's the kind of ecosystem they have built. So this ensures that your transitions are on utilities or or any payment that you're doing is available on any application that of your choice.
01:34:11
Speaker
Okay. How is it different from BBPS, Bharat Bill Payment System? So so sorry. So NPCI Bharat Bill Payment is the entity and BBPS is the product.
01:34:21
Speaker
So BBPS is what I was talking about right now. Yeah. Okay. Okay. Okay. Yeah. Okay. So, there is like an aggregator platform, which has aggregated all the products. Aggregator platform. So, there is convenience.
01:34:35
Speaker
oh Yeah. Absolutely. Interesting. Okay. Okay. Okay. ah So, this is, again, something which you are providing as a service to banks. Yeah. You help them to...
01:34:47
Speaker
Yeah. On both the sides. Yeah. So the builder side and as well as customer side. And then we also build applications. So we have ready apps. We have ready APIs.
01:35:01
Speaker
So anyone who wants to get into the business, and utility is like a not just mandatory, but also a commodity.
01:35:13
Speaker
for any application to survive in the market. So you have all these services, but you will also have utility payments ah um the in the application. so So these guys can use the services that we are providing.
01:35:27
Speaker
And is there a margin for the person? Yeah, there is a margin. Okay. Yeah, there is a margin. So in fact, There is a proper, just like an interchange mechanism. mechanism When I say interchange, your MDR is divided into multiple costs.
01:35:43
Speaker
So there is a cost that goes to switching fee. i mean, the the one providing switching services. There's cost towards acquisition. There is cost towards you know issuance.
01:35:54
Speaker
So when it's an acquisition, someone who has acquired a merchant. When I say issuance, someone who is giving, allowing the beneficiary based transactions or debit based transactions happen.
01:36:06
Speaker
so So that's where, you know, the entire MDR is divided. So similarly in BBPS also, you have a cost which ah which gets paid to the agent institute. So, or I would say someone who is transacting at the point of customer.
01:36:26
Speaker
So the one who is transacting at the point of customer is an agent institute who gets on boarded on customer operating unit. Now customer onboarding units role is to ensure that these services are made available at the customer end.
01:36:41
Speaker
So they will tap with agent institute. So Google Pay can be an agent institute and the bank from which they take ah these services can be the sponsor bank. just for, you know, others to understand. so like that, any app provider can become an agent institute.
01:36:57
Speaker
Now there, ah if at all, you are allowing these services, you're actually spending in user acquisition. So you should get paid for that. So any electricity bill paid there or any recharge done there, there is a fee which goes to the agent institute via customer operating unit. So both of them earn.
01:37:19
Speaker
And who pays? The ultimate beneficiary, the biller. The biller pays to the biller operating unit and then it comes to NPCA and then there is a cost which gets divided. How much is that discount rate?
01:37:32
Speaker
It's not a discount rate, but some fees. It varies from from some basic pace to not more than 2 rupees or 3 rupees, something like that.
01:37:43
Speaker
and there fixed neeroids not It's not on the... Because that's different, right? BBPays is not a payment instrument. There will be a cost towards payment instrument.
01:37:56
Speaker
That's different. You can use credit card, debit card, or you can use UPI. You can use any product to make a bill payment. So these are two separate ecosystems.
01:38:08
Speaker
And um further, there is a convenience fee. So you're allowed to charge a convenience fee if, yeah, to the customer.
01:38:19
Speaker
So you may pay you may be paying a convenience fee on PhonePay app if you're seeing PhonePay app. So I don't know. ah So i've I've heard about that. There's a convenience fee So so ah yeah that's there's a limit to it.
ONDC's Marketplace Revolution
01:38:35
Speaker
I think that it, I remember last was 10 rupees, I guess.
01:38:39
Speaker
or maybe a certain deviation based on the biller. So that's how the fees is defined. So there is a defined fee at backend, which gets distributed across ecosystem.
01:38:51
Speaker
And then there is a convenience fee. The decision is taken by the the the one who has onboarded the customer and there is a cap to it. Okay. And you are also doing ONDC, you told me. What is ONDC? Yeah.
01:39:05
Speaker
So ONDC is like you began with, you know, it's a protocol. ah Very interesting case. It started with solving the e-com related problem in the country.
01:39:18
Speaker
The thought was, you know, if it's it's a marketplace, right? So and e-com is a marketplace wherein you're selling your products or let's say you're selling a swimwear in a shop and now you can sell it online as well.
01:39:35
Speaker
So for hosting your product there and to to sell your product at certain discount or whatever you can, by keeping it in your you know warehouse and saving the retail cost, you can pay certain fee to the marketplace, basis which your products will get sold.
01:39:58
Speaker
Now that's how the entire e-com industry would work. Now here the cost to the seller, the guy who's selling a silverware can go from 5% 30%, 40% also.
01:40:16
Speaker
the Who is the ultimate guy taking an advantage? The marketplace. Now with that thought, The idea was, can we democratize the ah the marketplace the way we have democratized the payment instrument?
01:40:31
Speaker
Now that's how the ONDC happened. But later on, the idea was that beyond e-com, ah what more can be brought in? What more ah ecosystem can be built in?
01:40:44
Speaker
So today, ONDC has two sides. One is supplier, another one is buyer. Supplier is where you have, you know, but all of these guys, let's say, oh Hindustan Unilever or Procter and Gamble or all of these guys were who have something to sell will go to ONDC platform by being into a supplier stack and having a supplier app.
01:41:10
Speaker
So there will be a technology partner who will build a seller application for these guys. ah There can also be shop owners, small shop owners. Those who have shop right now selling it here, they are selling it on Amazon. Now they can sell it on ONDC also.
01:41:27
Speaker
But who are the buyers here? The buyers will be owned by guys who will acquire customers. and who will acquire the customer it can be anyone having a payment application or shopping app or whatever it is so then there is a separate ecosystem which is a buyer ecosystem now this buyer ecosystem will have a technology partner who will build the buyer application now let's say i have my own application which is time thing so we also have a product called as time pay which is a b2c app
01:41:59
Speaker
that's a ah future journey that we are ah building right now. A lot of aspiration around it. Now, this application is a payment app. On this application, you have ONDC as a solution provider. So there will be one buyer who will bring the products and services made available on ONDC by the suppliers.
01:42:21
Speaker
So you have different suppliers and these suppliers will come to ONDC platform. Buyers will consume all the APIs, whatever is available and show those services on the buyer application. And this will be then made available here.
01:42:36
Speaker
I'll explain this with an example. So let's say there is guy Kolapur who is manufacturer for Kolapuri Chappal. And somewhere at Northeast in Arunachal, one but wants to buy a Kolapuri Chappal.
01:42:53
Speaker
Now, if this guy goes to a seller app provider and says that, you know, I want to be part of ONDC, he'll get a portal or something where he can maintain his inventory.
01:43:07
Speaker
And then someone in Arunachal Pradesh has built an application which this guy has downloaded. Now when he is searching online and he searches that app, he also finds that, oh, there is a Kulapuri chapel available here.
01:43:22
Speaker
So there is supplier ecosystem separate, buyer ecosystem separate, but ONVC ensures that all of them are on ah one protocol and they are following the guidelines. And they all go through this gateway.
01:43:35
Speaker
So the gateway is being built here. that's That's how it works. Now, for this to be a successful case, neither a supplier can manage logistics, nor the buyer can manage logistics.
01:43:48
Speaker
So then comes partners in the ecosystem. So you have logistic partner. So the logistic partner will ensure that anything coming to his a platform, he will pick up the uh kolapuri chapel from kolapur and will send it to someone in arunachal and from there the logistic partner will pick up the chapel and deliver it to the buyer then there is a payment partner in the ecosystem similarly there are multiple partners in the ecosystem so that's how the entire ondc framework is designed
01:44:22
Speaker
ah we are working on financial services also right now. In fact, we are working on mutual fund story. That's a very interesting case. I mean, we are in the era wherein, I mean, I remember that my parents, when I started earning, they said, Deepak, buy insurance. I said, why? That's a great investment.
01:44:43
Speaker
When I grew up, ah my yeah so So the one who would come to our office as ah to manage our investment, he would say that insurance is for insurance. It is not for investment.
01:44:57
Speaker
And so then we move towards mutual fund. And then from mutual fund, now the area is where people are interested in investing straight away into equity and taking that risk.
01:45:08
Speaker
So if we have gone from insurance to mutual fund too. you know, to equity. So if at all you say 500 rupees or 1000 rupees a month and it is instantly available on your phone where you want to invest and you have mutual fund available giving great returns and you don't want to take risk, it should be on the phone.
01:45:27
Speaker
So financial services has insurance, it has mutual funds, I think it has personal loan as well. So these three categories on ONDC. So you have e-com as a category on NBC. You have financial services.
01:45:41
Speaker
They're doing something. Restaurants also. like Yeah. Yeah. Food delivery. Absolutely. delivery. And then transit. I think transport also. Yeah. Yeah. Great story. Transit, ride-hailing apps and your metro travel, all of that.
01:45:57
Speaker
Tickets. And then I heard that they were also experimenting around quick commerce. So there was a very recent story because it was, ONDC was built to solve e-com problem.
01:46:11
Speaker
And the entire traffic is moving from e-com to quick com. So obviously they will have to start thinking and building, you know, solutions around quick commerce as well. So that's the ONDC.
01:46:24
Speaker
Is ONDC meaningful today? in terms of the transaction volume? See, UPI is obviously meaningful. Is ONDC meaningful?
01:46:36
Speaker
See, everyone has a different role to play. Like BBPS is about aggregating utility services. ah UPI is about agg democratizing payment ecosystem.
01:46:49
Speaker
ONDC is about democratizing the marketplace and, you know, the similar... services democratizing the financial services market phase all of that uh unless so so there is a uh chicken and egg story so uh which i have learned way back when we were running the centers okay so if you have all the services with you then you have buyers Like you'll go to Amazon, right?
01:47:22
Speaker
You'll not go to someone who has just 5% of Amazon inventory or for, and for the, for someone to make this, bring all these services on the platform, you need to have buyer.
01:47:35
Speaker
so As a seller, you will go where there is demand. Absolutely. me So now for, I believe that ONDC will definitely become a success going forward.
01:47:47
Speaker
It is just a matter of time wherein ah the right inventories are available. The buyers will start flocking so that it saves their cost. But I have been hearing for two years now.
01:48:01
Speaker
It will take more time. It will not happen so early. It is like a 10-year journey. I will tell you, for mutual fund, when we are integrating...
01:48:13
Speaker
I'll not name it, but the the one who provides services in market ah has about 22,000 odd instruments.
01:48:24
Speaker
ah And here, there is just about 1,200 right now. so But the development journey.
01:48:35
Speaker
the the I would say the support and the freedom to innovate and ah you know ah bringing services on the platform and generating revenue.
01:48:51
Speaker
is it much better on ONDC compared to the other one. So if this 1200 goes to 3000, 4000 or let's say even 5000 one day, it is still good enough for the buyer to buy Mutual Front from the buyer app.
01:49:09
Speaker
So that is possible. So the moment this 1200 goes to 5000, let's say this was launched somewhere in, I think, last GFF, which was August, September, Global FinTech.
01:49:24
Speaker
And if at all you spend two more years and bring all of them on this platform, why will not buy our app get mutual fund from OMDC? So but the success will come in pieces.
01:49:36
Speaker
but Even with restaurants, it hasn't happened, right? Restaurants started two years back. Restaurants was an early use case, but I've never heard of anyone ordering through an ONDC.
01:49:48
Speaker
and Now here is ah the understanding that we have got. If it is service delivery over application, it will be a quick sale, it will be a lease. If the service experience is left to someone else, that is where the problem is.
01:50:03
Speaker
Okay. So offline is going to be a much harder because Zomato has control. They have SMAs. yeah They have TADs. They have like the leakages.
01:50:16
Speaker
they They ensure that there is a success. or they They provide a backstop that if it's not delivered, we'll refund you the money. or If you have a problem, we'll refund. and Absolutely. Absolutely. And they have all the possible matrix with them.
01:50:29
Speaker
And they see wherever the matrix is out of control. What do we do about this? That's in their hand. It is logistics partner. It is supplier.
01:50:41
Speaker
If at all. And then there is buyer. Buyer has no control over supplier. You know, that's that's just not... the case. That's why we picked up financial services as the first use case.
01:50:52
Speaker
And then we believe travel can be the second use case. So this is something which will quickly work. And then obviously there will be ah lot of innovations which will happen as in when the journey goes ahead.
01:51:05
Speaker
So the buyer apps have everything in it or can the buyer app curate and say, I don't want to show ah restaurants for example I just want the mutual fund and the e-commerce it's up to you what you pick up okay right now ah whatever we are building is based on you know what we have decided we want to do let's see even if we are compelled to do it the decision is up to left to us what to give to our customer because it makes no sense if buyer does not have the flexibility to decide it
01:51:40
Speaker
I mean, I'm not into, if I'm running a payment application and my focus is financial services, that's the category. I don't want to sell, you know, your biryanis and sandwiches on my application.
01:51:56
Speaker
It straight away defeats the purpose.
NPST's Comprehensive Financial Solutions
01:52:00
Speaker
So ah help me understand NPST as a business. What ah What is the kind of revenue you do currently? What is the split of that revenue? How much comes from which product line or business line?
01:52:13
Speaker
So NPST's vision is to provide digital technology across financial value chain. Now, when I say financial value chain, let's start from the regulator who has built NPCI. From there, ah regulator entities, which are banks,
01:52:32
Speaker
PPI and VFCs. From there, it goes to Fintechs, which is your payment aggregators, gateways, and then it goes to merchant and then from merchant to the customer. So that's the value chain we believe.
01:52:44
Speaker
So in the first value chain, we intend to be in the entire value chain. So the first one is about, ah you know, being a technology partner between banks and NPCI. So NPCI and bank, or, you know, if at all, there is any need that we can build something around the regulator ah requirements beyond payment.
01:53:04
Speaker
So that's where we sit. That's the first leg. And this is where we have majorly licensed in SaaS-based model, where we have all the products, including UPI, IMPS, SuperApp, which earlier was mobile banking, online dispute resolution, merchant acquiring stats,
01:53:21
Speaker
ah We have come up with a great product, which is regulatory tech. So that's ah that's my next big thing. all this... So, regulatory tech is for bank compliances. Like bank has some RBI compliances, etc. helps them manage that.
01:53:39
Speaker
Yeah. So around payments, what we believe is the payment ecosystem to secure the entire payment ecosystem. A, you have cybersecurity, you have, ah you know, but ah systems which can wrap over your payment software.
01:53:59
Speaker
The other one is the risk engine. So today we have EFRM, majorly fraud risk management system. But these are all, ah you know, pre-transitions.
01:54:12
Speaker
I mean, only if it is allowed by EFRM, you can transact. But what if the transition comes in the system? After that, what would you do? Then there are a lot of compliances. Now, compliances plus speed the ever-changing digital payment landscape, which compels regulator to bring in several more use cases and several more checks and balances.
01:54:35
Speaker
For that, there should be a single engine. And this is what we are building. So any compliance and regulatory requirement, which is required by a bank or a payment aggregator or a FinTech to own and operate a payment ecosystem is Rectic for us.
01:54:52
Speaker
And that is what we have built. It's a very ah futuristic solution, which is built on the AI ML engine. So we we decided that anything that we'll build will push it to machine learning so that the predictive and the overall you know learning of the entire rule-based ecosystem is evolved as and when it goes forward.
01:55:17
Speaker
The data will will you know will be the decision maker for the future data. That's how it should ideally work. So yeah, so back to this case.
01:55:28
Speaker
ah So these are certain products that we have, which either we sell it on license or SaaS based model. ah Then this piece covers about 20 to 25% odd revenue.
01:55:43
Speaker
revenue The difference between license and SaaS? SaaS, yes. Is it like license is one-time payment, SaaS is monthly payment? that the So licenses, you have ah license fee, then you have maintenance fee, then you have a support fee to for the uptime.
01:56:03
Speaker
ah You provide a manpower, you provide tech guy support team, and then you also have the development fee. which is your change management or your enhancements, all of that.
01:56:16
Speaker
So that goes in a license model. Wherever there are large banks or... That means the IP is with the bank. The IP... IP remains with the tech partner. Because it has been given a license model, not service model.
01:56:29
Speaker
So I own IP for every single product that we have. So product... So we are a product company. But at the same time, it has a service layer also, which generates additional revenue.
01:56:42
Speaker
ah So that's the license fee. So but typically large banks or or large entities who have ah who have the a huge volume and they cannot pay by, you know, your per transition module.
01:56:59
Speaker
So they will definitely pick up the, you know, the license fees. Wherever there is a mid to small size bank they have the where they don't believe in investing heavy in the beginning and pay as and when you go ahead, there will be pay-per-use model.
01:57:19
Speaker
So that's where the SaaS-based business will come. So entire investment is done by us, and right from the hosted services to the infra to application development, manpower support.
01:57:31
Speaker
Everything is shared. is I mean, most of these costs are shared. And then you end up paying ah portion of the overall cost.
01:57:42
Speaker
So instead of one rupee, you may end up paying just about 10 paise or just about 20 paise of the overall cost. That's the SaaS model.
01:57:53
Speaker
Okay, got it. So this you said is about 20-25% of your revenue. Yeah, around that. And what is the total revenue estimated for this financial year? ah Estimated, though, I don't want to share that number until we come out with the EQ for results. That is still due.
01:58:11
Speaker
But our revenue for first three quarters was 153 crore odd. And what is the EBITDA in that? Like...
01:58:23
Speaker
yeah habitize it like We are about 30, 35% averaging about that. Wow. And that is about 20%. Okay. Extremely profitable. Okay. 20, 25% odd. Yeah.
01:58:43
Speaker
And so the other major business is where, you know, we generate revenue. So that's the cream of the entire business.
01:58:55
Speaker
That's payment platform as a service. What we have done is we have identified that, you know, ah for banks and fintech to work together, either the fintech should have the capability to build their own engine and have the capacity to consume what banks do deliver because banks will build what ah they can for their requirements.
01:59:19
Speaker
However, banks will not build what fintech wants. But fintechs are deprived of cash. They are supposed to innovate and they're supposed to take care of customers. They are supposed to take care of these stories that they believe in and not the stack which is behind them, which is between bank and them.
01:59:40
Speaker
So there's the second part of value chain, wherein we are trying to bridge the story between bank and fintech. So we have built solutions around payment platform as a service, which is an end-to-end product.
01:59:53
Speaker
right from the the onboarding process to transactions, to API Gateway, to about you know reconciliation, settlement journey, your dispute resolution, your you ah complaint resolution around chargebacks, fund flow, you know all of that is entirely built by us.
02:00:16
Speaker
And then we give it to bank. and then we give the second extension to the fintech now this is where it plays a role of a bridge so payment aggregators or large fintechs or you know direct merchants they can consume the services directly from bank and then we get paid a portion of the cost that they incur over So banks will then pay us for the technology operations and the platform that we are providing.
02:00:45
Speaker
And the revenue is generated towards the cost paid by fintech to banks. that's That's how we operate. So that's about, you know, 70%. As an example, and say Bharat Pay acquires merchants and allows merchants to receive payments digitally and then So someone like Bharat Pay could work with you for the whole payment technology.
02:01:10
Speaker
And then Bharat Pay can just ah focus on merchant acquisition, merchant experience, cross-selling loans, etc. to merchants. And you are responsible for the the payment part between Bharat Pay and the bank Absolutely.
02:01:22
Speaker
Absolutely. I'm responsible for ensuring that Bharat Pay's journey with bank, which is back-end, is completely taken care. every new QR issued to a merchant, their KYC process, ah the QR issuance, and then you know the transition uptime, which should be 99.9%, then getting the reconciliation, the next settlement done.
02:01:52
Speaker
So all of that is taken care in our engine. They will ensure that right from acquisition to providing these services on the application. That is, or lending, or new innovations, customer experience. Absolutely. That is what they do.
02:02:09
Speaker
OK. So this is 75% of your business? Yeah. It was between 70% to or averaging 75%. OK. OK. OK. Understood.
02:02:20
Speaker
um What made you decide to go for an IPO?
NPST's Public Offering and Market Expansion
02:02:25
Speaker
And tell me the journey of going public. This was somewhere in 2017.
02:02:32
Speaker
ah I wrote a mail to a bank. I don't want to name them. Large bank that, you know, UPI has is the next big thing.
02:02:44
Speaker
Because it has a merchant story. So IMPS is more about, you know, ah is pay story, but you pay the collect story. So what will happen is the merchants will be empowered.
02:02:56
Speaker
Okay. And obviously, uh, uh, seamlessness and, you know, getting transitions done on any application that is available. So, uh, you know, I want to be part of the ecosystem. So beyond being just a technology provider, can we start building this platform?
02:03:17
Speaker
for the merchants. I waited for about one year. ah kept on requesting them. Nothing worked out. Then I realized that this is not a bank problem. This is my problem.
02:03:28
Speaker
And this is every fintech's problem. Why are they interested? And unless and until you don't have a success case. So a Google Pay, Phone Pay didn't happen until then.
02:03:40
Speaker
So I said, unless and until this is not a success, oh, I did not answer you on the beam thing. So again, Bheem came into picture ah wherein ah the realization was, you know, you have the ah you have the banks in the UPI ecosystem, but who will take it to the customer?
02:04:02
Speaker
Someone has to take it to the customer. and They already have mobile banking and there was very thin difference between UPI app and mobile banking app. The only difference was Now you can transact from multiple accounts. So that was the thinking in the banking ecosystem.
02:04:16
Speaker
So for this to become a success, for sure, ah you know we needed more players in market. So the decision was taken to launch BLEAM. and Bharat interface for money and make it a success.
02:04:31
Speaker
And then came other players. So that's how it happened. So I was also gunning behind in our stories which can which can bring in lot of merchant use cases.
02:04:43
Speaker
It didn't work with that bank. So then I went to a small bank, which was looking for a UPI switch. And I said that, you see, i i will barter. Okay. I have a larger aspiration around this.
02:04:56
Speaker
I will give you the switch. will not charge you for that. But you allow me to do this merchant business. platform story if I can, you know, build a merchant platform and then you can go to other merchants and you can bring them on a platform and, you know, transact and, you know, there there is a great opportunity here.
02:05:19
Speaker
Like you wanted to build a product which would be like a Bharat Pay. which which can be white labeled and ah provided to a bank and bank can use that too. Yeah. So when you say offline, it's like Bharat Pay. When you say online, ah you can say a payment aggregator.
02:05:36
Speaker
Okay. Like Razorpay. Yeah. But majorly, but not majorly, 100% UPI. That was the thought. Okay. Okay. So with this story, um we also needed funds, right? to To invest into such kind of platform.
02:05:52
Speaker
So then this happened somewhere between 17, 18 odd. Okay. And then in 18, we decided that we'll need some funds. And then we went to a few guys.
02:06:04
Speaker
ah ah You won't believe the first pitch we did a success. And I got about $5 million five million dollars commitment that time somewhere in 18.
02:06:18
Speaker
This is what we be done. But we could not sign the letter. We had to give them the approval. We could not sign the letter to the IP because the other guy said that I will give you X percentage and the value will be higher. And this is what I want to invest.
02:06:38
Speaker
You do it right now from me. And then you take this $5 million. It will give you better value and you know better number negotiating power. And that never happened.
02:06:49
Speaker
And after that, it took us almost one one and a half year odd to keep going to every single person in the market. And no one believed us. No one believed that.
02:07:01
Speaker
Why do you need someone between bank and aggregator? Aggregator is doing himself. What will you do in the back of the company? He said, no, that's the problem. Only those who can do it are are visible right now. Those who cannot do it, there are hundreds of such guys and they just cannot do it.
02:07:19
Speaker
So I want to democratize that system here, learning from what NPCI did. I want to build that system so that anyone can use this platform. And this happened for one, one and a half year odd.
02:07:30
Speaker
ah We were still doing well with our technology business, but obviously, you know, Our gen universe was limited to banks.
02:07:41
Speaker
Our universe was very limited to those who are licensed to use the kind of product that we are using. Whereas my customers, which are banks, ah were seeing lot of new fintech coming to them and you know asking for the services.
02:07:57
Speaker
Then I said, that's the second leg where there are You know, the audience is is is has lot of paying capacity. Use cases are higher and they need the services.
02:08:10
Speaker
So somewhere in 2019, we were almost at certain discussion and then COVID happened. When COVID happened, everything dried up. and we had to survive for survival we decided that we'll get into services business we'll build we'll uh because business was not coming those funds were not coming so we went into services business and there we realized that my first vertical will never help me scale so if you see our pnl our pnl was flat for two to three years so 15 17 19 that's
02:08:49
Speaker
the numbers were going. ah Then ah then we realized that you know we need we definitely need funds. And while were raising funds, someone told us that why don't you raise it from the SME market?
02:09:04
Speaker
If you are so confident about your numbers, they said we are very confident. I mean, its it has only come after sitting in bank for hours together and seeing what the problem statement is.
02:09:16
Speaker
so Then merchant banker, we got introduced to a merchant banker and then our requirement is very less, was very small. He said, you see, you will get valued for not more than 50 crore rupees.
02:09:31
Speaker
But please what was your revenue at that time? I think it was 17 crore when we took a decision. And when we did an IPO, that year we did 19 crore.
02:09:45
Speaker
So that was... There's like 21 crore.
02:09:48
Speaker
2021. We did an IP on August 21. March 22, I think we were 19 crore.
02:09:55
Speaker
Then, see, we I said that my requirement is not more than crore odd. So that's what I'm looking for. 6 is more than enough. and We just want to launch the product and then we have to monetize them.
02:10:09
Speaker
So we said you cannot go below 26% and you'll get value at 50 crore. And then there will be free IPO. If at all there is any fund that wants to come in your, you know, before IPO, do that.
02:10:23
Speaker
It will push your IPO. then Okay. Then, then we decided to raise funds through an IPO. Obviously confidence was very high. We knew that this is a success. There is no doubt about it.
02:10:34
Speaker
Right from business model to technology stack, market understanding, you know, everything was available. It was just that push, which was needed. And because of COVID, we took a decision that will not delay further. We'll take a decision.
02:10:48
Speaker
We took decision in 2020. The entire discussion was virtual. We were all sitting home and merchant banker got signed up virtually. Everything happened virtually.
02:11:01
Speaker
Only when Somewhere in when everything was fine, we met merchant banker once. We met our investor once, uh, pre for the pre IPO, wearing mask, presenting it to them.
02:11:13
Speaker
And then, uh, August 21, we did an IPO. Uh, but there was a very good statement that came from him. Uh, he said that people don't worry about the valuation because if you really do well, uh, market will bring you to the right value.
02:11:30
Speaker
So this 50 crore today. You do great and trust me, you'll be valued well. You overvalue yourself, then go to market. Market will ensure that you are brought to the right value. yeah okay was was germany So for us, the journey was ultra. I mean, we never raised funds through debts. We never diluted an equity.
02:11:53
Speaker
We straight away went to an SME IPO, valued at 50 crore. At peak, I think we touched almost 5,000 crore. So 5,000 crore market capital. yes and Yeah. And I think we are close to 4,000 right now. and Everything has gone down.
02:12:09
Speaker
ah The market is not that great today, but pe you that's that the, we so we gave about 9,000% return to our investors. So that's the SME board.
02:12:22
Speaker
Like you did. Yeah. NSE SME board. okay Yeah, we got an approval to move to the main board. ah We got an approval for both NSE and BSE main board.
02:12:33
Speaker
ah I think a within next 10-15 days, we'll be on the main board. We'll be migrating. Amazing. The SME board has some restrictions like minimum ah amount to be invested. Not everyone can invest in SME.
02:12:54
Speaker
Yeah, so it is again to safeguard the interest of the SMEs who are in that SME board. ah they What they do is if at all your... So your traded value should not be less than 1 lakh rupees.
02:13:12
Speaker
so if So we were at 80 rupees per share and I think our... lot size was 1600 if i'm not wrong so around 126 000 so so you cannot trade in less than 1600 and then as and when it goes up from 80 we went to almost about 3000 odd uh so as and when it goes up the lot size goes down so that decision is taken automatically by the by the system so from so we in fact
02:13:50
Speaker
went down to almost 50 lot, lot of 50 shares. This restriction will be clear as soon as we move to main board. Okay. Okay. Okay.
02:14:01
Speaker
Fascinating. ah This ah valuation multiple, ah it it the seems massive, right? So like the... Yeah, i mean, we are blessed with high PE. What is the PE roughly? Yeah.
02:14:19
Speaker
P-E ratio is where, you know, based on the profit that you're doing, ah your equity is valued. So that's how the ratio is calculated, P-E ratio.
02:14:33
Speaker
Now, what happens is there are multiple factors to it. It's not just about the profits. It is also about what segment that you are in. ah Manufacturing will have different P-E, services will be have a different P-E.
02:14:49
Speaker
uh and then within services also what segment you are in so we believe that our segment is very very innovative and you know forward looking uh and kind of innovations which are happening the kind of opportunities available in hand for the company and the way we have performed back to back quarter on quarter and year on year you know uh all of this brings lot of confidence and we have delivered everything that we have committed.
02:15:21
Speaker
So our intent is very clear that, you know, we want to create an organization, a payment organization. We haven't heard about a payment organization, which has gone from India globally. There are, but I will very few and cannot be, you know, named. So can we be one of such entity who takes the digital payment globally?
02:15:45
Speaker
See, we are sitting at an opportunity wherein You know, the UPI has happened in India. Okay. And we have straight away gone from plastic card to digital currency.
02:15:56
Speaker
And we have gone to QR based transitions. And that evolution has been brought by Indians. So, and if we are so close to that technology, we are so close to the entire growth trajectory in last 10 years or then, then why can't we be a global company?
02:16:15
Speaker
Why can't we take it to larger audience and why can't we solve a lot of new use cases? So all of this is a recipe for an organization to create a lot of future and you know new buzz as in when we go ahead.
02:16:32
Speaker
So every time we have spoken to our investors, we have taken a lot of steps to ensure that it is achieved. During the journey, we have also made some mistakes which we have learned and then we have ensured that this does not go back ah to the same problem.
02:16:50
Speaker
ah And at the same time, you know what we did was we adopted the mainboard practice way too early. So we started declaring the results quarterly, although it was applicable on us to do it half yearly.
02:17:06
Speaker
ah We ensured that our results, we are one of the first ones to declare results in market. so So that, you know, there is lot of transparency brought in. We also gave guidance to our shareholders and we achieved that guidance. number So, and at the same time, we also gave them a lot of visibility around what the organization is doing.
02:17:29
Speaker
I personally conduct quarterly calls. There are mistakes, which I accept. There are progress, which I share and then listen to the shareholder, take their feedback, go back to the board, present it to board, believe in creating a very strong board of directors and then making an effort to, you know, going to main board.
02:17:52
Speaker
Because then you are open to scrutiny, right? Much larger scrutiny. We want to do that we because we are so transparent around it. Accountability is also you know as part of our value.
02:18:05
Speaker
Then beyond this, ah you know ah there are there there are such similar efforts that we have taken wherein We have declared in advance that we want to go for QIP and then deploy funds.
02:18:21
Speaker
So that means we have an expansion plan. We have already achieved certain goals on SME board. When we go to main board, we have a great plan. Although we declared this in qr we got the shareholder approval last year Q1 results.
02:18:39
Speaker
ah We still didn't go for it because as and when we are going ahead, ah be realized that, you know, there was some challenge with, you know, our result in Q3. And then, you know, we decided to not raise it because we wanted to be more, you know, transparent and ensure that, you know, funds are brought in at the right time.
02:19:01
Speaker
we brief We prove it again and then we raise take the fund. Not that it is available right now, we'll take it. that was That's not what our intent is. We shared this insights with our shareholders as well.
02:19:14
Speaker
And then the larger plan around deployment of fund. So that was also discussed. So all of this is a recipe for investors to look forward to NPST.
02:19:29
Speaker
And this is the the reason why there's lot of trust and lot of you know ah value understanding about the organization amongst you know people who wants to invest. And then we also decided that the moment we go to main board,
02:19:44
Speaker
we will be exposed to larger fund houses and institutional buyers who shy away from investing in a listed company on SME, but they are open to invest into companies which are on main board.
02:19:56
Speaker
So then we decided we should have, yeah, that kind of in institutional buyer also coming on board will create a great value for the organization and that can that can build a very strong foundation.
02:20:09
Speaker
So that was also one of the decisions. So all of this, gives, you know, confidence to to give that kind of PE. What ballpark PE it it it It went beyond 100, by the way. I don't track.
02:20:28
Speaker
Ashish does that. ah But I keep money away from me. I just look into business. a So I think we crossed 100.
02:20:40
Speaker
But you know, the interesting piece here is, ah ah we have also issued bonus ah and that took two is to one. We performed well last financial year. We went from 41 crore to 130 crore. And then we gave 2 is to 1 bonus to our shareholders.
02:20:56
Speaker
So, so yeah, I, so the it used to be very interesting case that, you know, every time if the P would go to 90, you know, quarterly result, the result would be so great that, you know, it would come down to 70.
02:21:09
Speaker
So then again, there was a gap, right? Oh, this is happening back to back every quarter. That means there is a space. So then the investor would invest there. amazing i just googled what is the p ratio for apple it's 30 so you you are at three times of apple's p ratio amazing amazing that's majorly because uh we are at the growth stage and yeah we have pay tech story right right right amazing amazing uh thank you so much for your time deepak it was a real pleasure