A Dwindling Indian Payment Bank Received Customized Research Solutions by Research Nester to Promote Sustainable Growth and Profitability and Rebuild its Customer Base.

The Story

The startup was the brainchild of two Indian individuals who realized the necessity of streamlining the online payments industry. On the 24th of November 2014, the Reserve Bank of India issued guidelines for establishing payment banks. It allowed the opening of saving accounts and current accounts but restricted the banks from issuing credit cards and accepting deposits of more than 1 lakh from a customer. When the start-up was incorporated in 2015, just 40% of the country’s population was connected with the banking sector. The rest 60% included lower-income people, people working in the unorganized sector, and the rural population. The major objective of incorporating the start-up was to tap the small savings accounts of SMEs, and low-income households ensuring their financial inclusion and providing payments and remittance services to workers of the unorganized sector and migrant laborers. When the company was initiated there were very few payment banks, and hence the bank’s share in the landscape was around 30%. But in a few years’ time, the landscape expanded significantly. Moreover, commercial banks also entered the payment sector providing services to people who did not have a bank account. The client bank initially saw rapid growth enabling payments and banking solutions for a number of businesses, SMEs, and large scale too. Moreover, it found high popularity among migrant workers and semi-literate rural populations. However, in March 2020, all hell broke loose when a card skimming fraud was reported. It was followed by two more such instances in the same month. The debit card details and ATM numbers were illegally captured and used to carry out fraudulent transactions. Since the COVID-19 protocol restricted regular activity, the bank was not able to carry out a thorough internal and external investigation. The bank could not compensate the affected customers promptly and took around 9 months to process it. This led to dissatisfaction among them and damaged the credibility of the bank. In June 2021, the bank authorities reached out to Research Nester analysts to help it re-work its strategy and gain back its reputation and trust.