Demonetisation affected many people in many ways. But the most to feel the heat were small and medium business owners. Being largely a cash intensive market, they had to adopt digital payment tools in order to keep the business going. And there came a big revolution for companies offering digital wallet, payment gateway, etc. And India Transact Services Ltd. (ITSL), a fully owned subsidiary of AGS Transact Technologies Ltd., is one of them. TSL is an omni-channel merchant payment solutions company providing cutting-edge technology and innovative payment solutions. ITSL aims to consistently simplify the process of transacting, Merchant Acquisition and Value Added Services. We spoke to Sunil Khosla, Sr. Vice President - Sales & Marketing, India Transact Services Ltd., about the company, its various services and on how ITSL will lead the way for digital India.
Tell us about India Transact Services Ltd. (ITSL), its inception and journey so far.
ITSL is a fully owned subsidiary of AGS Transact Technologies Ltd., which has been a pioneer in business lines concerning ATMs, cash movement, transit, banking, etc. ITSL itself is an omni-channel merchant digital payment solutions company providing cutting-edge technology and innovative payment solutions. We started in 2013 and in the first two years we were basically creating base products, piloting few products and analyzing, etc..The real journey started around 2- 2.5 years back when we started rolling out new products, new portfolio and went into further market expansion. That time we were walking and post demonetization, we started running and now the journey is pretty good, pretty fast.
What are the various services that ITSL offer?
We have four unique line of business. First is Merchant Acquiring business, where we do merchant acquiring for a lot of different entities. We also have a payment and business solution. At back-end, we do a lot of issuing and processing solution. We also have a switching and acquiring solution for a lot of people. ITSL offers a host of products and services including payment processing platform for routing commercial and retail payments between buyers and sellers across the country. The company is also an independent service organization providing services like distribution, merchant enrollment, training, activation, field support, transaction switching, network, reconciliation, settlement and fraud and chargeback management. ITSL's unique value added services enables merchants to run their own loyalty program through prepaid and reward cards.
Tell us about some of your most prized clientele.
Education has been a key sector for us, especially in the last year we have seen that education has suddenly started booming in terms of requiring the digital mode of payment. In this sector, our clients include, Dr Bhatia Medical Institute, Vibgyor Education, etc. While in grocery, we work with Aroma Bakery, Apna Bazar, V2 Retail, Brown House Baking, etc. Then we are also doing business with government entities. We are also into hospitals like Nanavati Hospital and in transport as well. Then there are banks which we are working with. So the list goes on because we have a four way strategy that captures mostly all the channels that are there in the market.
Tell us about your market reach.
This is another unique thing about Indian Transact that we have four channel strategy, so its four ways how we can acquire merchant. We have a very disruptive distribution channel. Courtesy all the four channels, we are the fastest to reach 619 cities in the country right now. And a lot of them are in tier-II and –III cities as well. So we don’t only concentrate on metros and mini- metros but we go deep down considering the real digital requirement lying there.
How has ITSL grown in the last 5 years? What are the factors that have lead to this growth?
When I compare October 2016 with October 2017 as pre and post- demonetization periods, within one year, we have grown by 500 percent while the industry has grown by just 200 percent. So that is the kind of growth we have been able to achieve in the last one year. And every year, we will try to double or triple our growth. The growth we have registered is courtesy various strategies that we undertake. We innovate a lot of products, have our own technology team, buy quality products which are durable in the market, do a lot of things with the product, and we are the only one in the market who offer customized price bracket for different kinds of channels or markets. We have our own deployment or service team which is a very unique thing because in this industry, selling is one thing but maintaining those sales and then post-sales scenario is a tough thing. But we manage that quite well. We have also built a very healthy team pan India which is very unique thing of FMCG and payment, which has helped us in the process of reaching where we are today. So I think we have been working on all the keys of marketing which is helping us getting these kinds of numbers.
How ITSL is empowering MSMEs/ small retailers to embrace digital transactions?
The normal way of an industry moving is that you sell it and move forward and sell again and sell again. Unlike FMCG where there is typical repetition model that you have to go back to same merchant again and again, that kind of model didn’t exist in this industry for now. But what we have done is, courtesy our team or distribution network, we have been able to visit the same merchant again. What is happening is that the merchant knows that we have a consistent team across the geography and thus the trust is higher. That is a way we help the merchants firstly in training, not only during sales time but post sales also. The same thing is done by service teamss also which is available 24*7 across geography. So training is very essential where we are able to empower those merchants to not only buy from us but eventually how to use it to what is full utilization and how to go to consumer as well. We do a lot of things in marketing also which is a merchant level marketing so that there is lot of awareness of whatever is happening. We also have specialized commercial packages that we have brought and these make it easy for them to enter into this kind of business.
ITSL’s brand ‘Ongo’ has seen great success and acceptance in the market since its launch. What exactly do ‘Ongo’ services include? Also, what do you think has lead to this success?
Ongo is a lead brand for India Transact. Since we wanted a consumer centric brand, we came up with Ongo and under this brand, we have everything like POS, loyalty, payment gateways, etc. I would not say that we were fighting the brands like Paytm, etc., that are already present in the market,when we started 2.5 years back, in July 2015, we had a very unique proposition of having the wallet for a micro merchant and a wallet for easing transportation paymentswhich we piloted in Mumbai. We were able to empower small merchants as well as the auto drivers to accept payments digitally. This gave us around 60,000 autos and taxis as our clients in Mumbai and we acquired around 3.3 lakh consumers as well. This was much before demonetisation took place. Currently, we have halted the wallet operations and probably by March 2018 we will take a decision on how we should take this forward.
Why we halted Ongo operations? Frankly speaking, post demonetization there was so much of work to be done in POS and loyalty which is currently the main line of our business. So we thought that we should focus our entire energy towards that business and justify the digital India movement; plus there was also many regulatory changes happening. So we decided to wait for them to happen, come to a conclusion in the next 3-4 months then take things forward.
How has the recent government policies affected the business of ITSL?
I think not only the government push, but lots of other entities have pushed digital transactions a lot and that has surely helped us. Earlier, the scenario was that we had to push a lot of sales but now we see that there is some pull in the market. Earlier the demand was only 10 percent in the market and now it has gone up to 30-50 percent. So the awareness is there, the need is there and demand of course is increasing because of all the push that is happening. I think it’s pretty good for all of us. Talking about GST, it also helped us because GST also enabled the merchants to go digital. There is a thing called GST service provider which have to be rooted through an integrated POS where you need a POS and billing software. So ultimately, it will further add on to being digitalized; so even GST, from a business point of view, helped us.
What are your plans for expansion in terms of market and also services you offer?
I think we are already in 619 cities and by year end, we should be reaching to the golden number of 1,000 cities pan India. We are already involved in all the services but we want to spread further in all the relevant places. So the first target is 1,000 cities which we should achieve by end of this financial year. Second is portfolio; so we are expanding our portfolio also as per market needs both in devices and device-less. Thirdly, we are expanding our partnership business; so we have done partnership business with 3 companies for small merchant loans, and now are partnering with few more entities for relevant business opportunities for the merchant we aren’t catering to. Fourthly, we are also increasing our team by 3 times.
What do you think will be the share of ITSL’s contribution in making India digital economy in the times to come?
We are totally working to make India a digital economy but not cashless because we have a big business for cash as well. We have tripled our market share in the past one year and we want to continue this momentum and the aim is to become one of the leading merchant acquiring companies in the coming years. That is what we are aiming for and of course multiplier market share every year by two times or three times and to be one of the leading player in merchant acquiring and actually No.1 in non-banking scenario.
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