Rural users prefer ’personal interactions’ to trust fintech services, says PayNearby CEO

With the highest fintech adoption rate at 87%, India's rural and semi-urban areas remain significantly underpenetrated by financial services, caused by a lack of familiarity with digital technology and financial inclusion among them. 

“Limited infrastructure, patchy internet and a lack of physical branches make it difficult for people to access services digitally or require them to travel long distances,” PayNearby MD and CEO Anand Kumar Bajaj told LiveMint. 

He stated that financial services providers need a large budget to establish and maintain branches in remote areas. Also, there is a notable disparity in technology adoption in such regions as many residents lack access to smartphones, computers, or the internet, Bajaj said. 

“Even in cases where technology is accessible, there might be a lack of familiarity or ease in using digital financial services, which adds complexity to efforts to provide financial services,” he said, adding that assisted digital banking can make fintech services accessible to underserved populations. 

The PayNearby CEO asserted that leveraging data, analytics, and new business models, such as Distribution as a Service, can play a big role in filling the gaps and fulfilling society's needs. Besides data analytics, Bajaj believes trust becomes crucial among rural communities who mistrust digital solutions, hence, they usually prefer personal interactions for financial services. 

“PayNearby utilizes this trust, turning retailers into an extended arm of the banking system, providing essential financial and digital services to the last-mile community. Our Distribution-as-a-Service (DaaS) network, which includes over 12 lakh active retailers, is instrumental in this effort, providing a familiar touchpoint for customers,” he said. 

“We are focused on upskilling our workforce to align with our diversified offerings, ensuring they have the necessary expertise in digital, financial, and CSAT (Customer Satisfaction) domains. Our retailer density is capable of servicing 93% of Bharat. This ensures easy accessibility for previously underserved citizens at the last mile,” he added. 

It is worth mentioning that the surge in United Payments Interface (UPI) transactions, soaring by 118% in rural and semi-urban retail outlets in 2023, marks a notable trend shift. 

The increase in transaction value by 106% indicates a growing acceptance of digital payments beyond just banking, encompassing utility payments, insurance, credit, and assisted commerce. This growth underscores the importance of fintech companies expanding their reach to include the 65% of Indians living in rural areas.