[Startup Bharat] With over 7 lakh touchpoints, BharatATM is bringing banking to rural India

In a conversation with YourStory Ram Shriram, who is the CEO of Mahagram and Founder of BharatATM, talks about the workings of the neobank.
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The BharatATM platform was launched by Mumbai-based fintech company Mahagram in October 2020. It has roped in kiranas and other retail stores across the country to provide banking services in rural regions.

Customers can open bank accounts at the store by producing their Aadhaar and PAN Card and conducting authentication using E-KYC. To withdraw or deposit money in their bank accounts, customers can use Aadhaar Card.

The platform also enables customers to transact using a debit/ATM card of any bank to withdraw money from the same store.

As a rural neo bank, BharatATM says it is also offering ‘recurring deposit’ programme that allows housewives, elderly, or even teenagers to start saving on their choice of recurrence — daily, weekly, monthly or quarterly.

It offers returns of 11 percent per annum, which BharatATM says, is the highest in the industry on recurring deposits.

Representative image

BharatATM has tied up with private lenders for the programme. The platform claims to have over 7 lakh touchpoints across the country, comprising 20,000 handheld terminals (wireless ATMs) for cards.

In a conversation with YourStory Ram Shriram, CEO, Mahagram, and Founder, BharatATM, talks about the workings of the platform.

Edited excerpts of the interaction:

YourStory (YS): How does the platform work and what are the challenges you faced?

Ram Shriram (RS): The platform engages local shops and enables them to offer banking services and government schemes like loans, insurance services to the rural unbanked and underprivileged customers. Also, BharatATM aims at helping Kirana stores increase revenues by providing ecommerce services as well as selling financial products to their customers.

The parent company of BharatATM is Mahagram which is Mumbai based fintech company whereas BharatATM being a digital platform has a huge presence in more than 15 states, majorly covering Maharashtra, UP, Bihar, Jharkhand, West Bengal, Punjab, and other northeast states.

YS: What was the initial idea and what was the development process?

RS: We identified the problem faced by rural masses and came up with a logical solution. The next step was to build a technology backbone.

There are several tech platforms already available for us to develop our application. But after thorough research, we finally identified a NET platform with core java in order to develop a technologically four-tier security layers driven fintech application.

The COVID-19 pandemic has tremendously impacted the global startup ecosystem, but fortunately, we fell under the essential services category along with the grocery stores. Since our model is B2B2C and grocery stores are the channels of customer acquisition, it was easier for us to keep up with the time. Our GTV (gross transaction value) surged by 300 percent during the pandemic.

In the initial stage, the biggest challenge faced by every startup is hiring good resources, convey your idea to the cofounders and then build a team to execute the ideas. We have been very fortunate to have amazing team members onboard. We have Amit Singh (Ex Fino, Glodyne) as our COO and Vasudev Phadnis (Ex EzeTap, Euronet).

When a startup involves technology or it is associated with it, sometimes the technology needs to be up to date. The collaborations with tech companies, data centres, and consultancies help Tech startups to overcome the tech challenges.

When you are ready to do the GTM (go to market) of your startup’s products you need easy access to the market. When we started, our strategy was ‘one district at a time’. We visited every district of Maharashtra, conducted seminars, gatherings of local distributors, chaupal, etc. to spread awareness & educate our customers and eventually onboard them on the platform.

YS: How does BharatATM's platform work?

RS: The solution is in the form of a mobile app. The consumer just needs to download the app and create an account. After completion of the KYC, the user can avail of the services of BharatATM.

The app allows their retail customers to open a bank account at the neighbourhood stores by producing their Aadhar Card and Pan Card authentication using rapid E-KYC techniques.

YS: What has been revenue, traction, and growth of the platform?

RS: Mahagram was started in 2015 with an initial investment of Rs 10 lakh and has earned a revenue of Rs 8 crore this financial year, with a monthly revenue rate of Rs 70-75 Lakh. We are now aiming to touch Rs 12 crore in the coming fiscal year. Every transaction agent is performing on the eGramkendra platform is linked with some incentive paid by the Government or banks.

The maximum revenue comes from the transaction fees we charge to the issuing bank (customer’s bank) or customers as convenience fees. As for income sharing, it offers maximum revenue sharing through each transaction to merchants. On average, they earn close to Rs 13-14 per transaction. Currently, it is doing about Rs 1000 crore per month of transactions (Aadhar-enabled, micro-ATMs, UPI, and others)

Our digital-first approach to everything, including acquisition, service has set us apart from the others in the race. Transaction fees and commission are our primary revenue models alongside the subscriptions.

YS: What are BharatATM’s future plans?

RS: We are planning to 20 lakh new retail outlets by the end of 2022 and are also aiming to raise $10 Million in the next few months.

Edited by Affirunisa Kankudti

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