Interviews

Euronet’s Transformative Role in India’s Booming Digital Payments Sector: Pioneering Innovations and Enriching Customer Experiences

CXOToday has engaged in an exclusive interview with Pranay Jhaveri, MD – India and South Asia, Euronet

 

  1. As India is now booming in the digital payments sector, what new does Euronet bring to enrich its journey in the country?

Euronet has always been at the forefront of financial innovation. We started our business in 1994 when we were one of the first non- banks to install ATMs at tourist hotspots in Europe, as compared to bank ATMs which were in the city centre.  Since then, for the past 3 decades, we have been innovating in the payments technology space and now we have more than 50K ATMs globally.

We are now diversified within the payment’s technology space. We have a successful digital business called epay. It is a global business and is thriving in India as well. epay specializes in delivering customized solutions and creating cutting-edge partnerships between top brands and customers. epay is an exclusive distributor of gift card of global brands here in India and offers bespoke solution such as gas cylinder booking system, OTT & mobile recharges, gaming payments etc

We also provide a modern enterprise payments platform called Ren to banks and financial institutions for all their modern payments processing needs. Ren is available in a service as well as licensed solution which has been effective for bank, and fintech in several business territories such as payment switch, issuing system, acquiring and in real time payment solution. 

Then we have globally cross border remittance business, Ria, which is globally number 2. We are working towards acquiring the top position in a few years.

 

  1. What is the primary way in which automation has changed the payment solutions space? What aspects of the payment space are benefiting most from automation?

Automation has certainly transformed the payment solutions space by enhancing speed, security, accuracy, and overall efficiency. One of the key benefits of automation is witnessed in the way it facilitates the management of subscription and recurring payments for businesses and customers. Bill Payments is a chore and was a physically demanding activity a couple of decades back. Now with payments automation, bills can be paid in a single click.

Additionally, automation has simplified for organizations the seamless integration of various payment systems and channels.

Also, thanks to APIs, payment gateways are easily connected to a variety of software programs, websites, and mobile apps.

 

  1. How is Euronet addressing last-mile issues in the digital payment industry in India, ensuring smooth and efficient payment experiences for end-users?

At Euronet, we deal with the last-mile issues in the planning stage itself and that starts with understanding the current last-mile payment process. There are bandwidth and storage challenges as we process tens of millions of transactions daily. Every failed transaction is a lost opportunity, and we would like to keep the failure rate to near zero. During festive times these transactions spike and we need to build in enough capacity to handle the spurt in transactions.  

Also, in the payment sector, security is of the utmost importance, and Euronet has robust security measures in place to safeguard client information and transactions. To earn consumers’ trust, we make sure all applicable laws and industry standards are followed and the necessary certifications are in place.

  1. Could you elaborate on any innovative features or functionalities within your digital payment solutions that have proven to be particularly beneficial for the stakeholders, enhancing their overall payment experience?

As mentioned earlier, we are the top aggregator in the epay business and offer combined technology for mobile recharge, bill payments, gift cards, digital gold, credit cards, and gas cylinder booking system.

To be precise, we offer an in-built solution with our master API for all epay services, which makes for easy and seamless integration between epay and its channel partners wanting to offer the service.

Also, epay’s channel partners get an opportunity to engage with potential customers of Tier-2 to 4 cities for a recurring payment transaction and engagement.

Also, Our BPPS license makes us one of the top 5 OU’s on BBPS. As a result, we are on both the biller and consumer OU side. 

In addition, on the processing side, we offer a complete issuance and acquisition package, providing a debit card, prepaid card, and foreign currency card platform for banks and fintech enterprise systems. Besides, we also offer UPI implementation at banks.  In a nutshell, we provide an effective combination of technologies.  We do 2.5 billion UPI transactions annually with over 10 Public sector, private sector, and cooperative banks.

  1. How does Euronet envision the future of its sector and brand? Could you also provide insights into the organizational roadmap and strategic direction that Euronet plans to follow.

Euronet continues its investments in India. We have been around for 20+ years now and we have certainly achieved phenomenal growth.  Currently, we have 1500 resources across the country.

The implementation of Asian bank’s payment system processing business is now underway in India. Currently, we are implementing the real-time payment network for Jalin, Indonesia’s national financial switch. Similarly, to UPI here, they have a real-time payment system based on ISO that was implemented from India.  Indeed, we are expanding our footprint into areas such as LATAM and using the experience of the Asia team.

 

  1. With consumers in APAC intend on using new, alternative payment methods, which ones have the potential to further disrupt this industry, especially considering their impact on cross-border transactions? What innovation Euronet has brought to the region in cross-border transactions?

We have launched a product called Dandelion, globally and operational with 170 countries and with half a billion bank accounts. So, we connected with bank, we are connecting network. The biggest challenge in cross border remittance is one is the fee; second one is everything is through swift batch processing system. It takes time.

Today if we send money abroad, it takes 2-4 days and not real time. So, we are trying to address the problem and solve it by making the transaction real time or near real time with Dandelion. Through productizing this advantage, we aim to address the major challenges in cross-border payments, such as high fees and time-consuming processes. We have already secured a global partnership with HSBC and expect this system to pick up.

We are having active conversation with multiple banks globally and over the next 3-5 years we expect that, this would become big. As a consumer everyone wants the transaction to cross border happens real time or near real time, especially the parents’ sending money to student abroad without worrying and following up more about the transaction confirmation. We run Dandelion as separate business.

 

  1. In terms of digital transaction growth in India post-pandemic, particularly in rural, how much has their average transaction value increased?

Post COVID-19 pandemic and subsequent lockdowns, consumer behaviour changed, and people were reluctant to use ATMs as they were high touch and thus switched to UPI rail-powered scanning and payment methods instead.

UPI transactions have significantly increased from 1 billion transactions and INR 1.5 billion transaction value in April 2020 to 9.4 billion transactions and INR 15 trillion by the end of May this year. So clearly, there has been a surge in UPI as several small transactions were also migrated to UPI. For instance, someone who used to visit the ATM five times a month now visits the ATM two or three times a month. As a result, ATM usage declined.  However, cash withdrawals within the channel remain the same. 

Cash in circulation has doubled after de-monetization to approximately $33-34 million (over US$400 million). The fees remain the same even though the transaction ticket size increases by 15-20%. 

So, while ATM usage may have reduced, transaction ticket sizes have increased, and cash withdrawals have also shot up. We can talk about our own estate. Small transactions are down 13%. Issuances below 3,000 rupees fell by 30-35%. These transactions may have migrated to UPI, so this is where the impact will be most noticeable. 

Though, the ratio of cash to GDP is 13%. Still, cash dominates 70% of the economy. In terms of digital bank, there are some 300 million people using it and there is overlap when using all the apps, Indian consumer look for best offers, and there are lot of these cash backs and much more.

Look at the many large UPI app technology companies with plenty of capital and funds. Some companies have spent $3.45 billion on acquiring and retaining customers and are still doing so. Nevertheless, some small wallet players are unable to do it so. These apps are removing many transactions from digital banking channels. The path to earnings does not exist by talking to any of them. So, it’s only that 300 million plus minus another 10% that’s trading. According to RBI data, 43% of population have never used digital payments.

 

  1. How can businesses and financial institutions leverage digital payment platforms to enhance their payment processes and improve customer experiences?

For financial institutions and business, it is important to leverage the data collected from digital payment platforms to gain valuable insights into customer behavior, spending patterns, and preferences. Of course, this is only if businesses get consent from users to use this data. We also need to keep in mind user privacy and use masked data only. 

The key is to ensure that digital payment solutions can be seamlessly integrated across various channels, including in-store, online, mobile, and social media platforms. This enables customers to make payments using their preferred channel, enhancing convenience and improvise customer experience.

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