Startup puts a bank in your grocery store

Novopay is helping those with no access to formal banking carry out many transactions using just a phone and an Aadhaar card.

Published: 10th July 2016 05:00 AM  |   Last Updated: 10th July 2016 05:00 AM   |  A+A-

BENGALURU:  Saleem, who runs a grocery store in Peenya, uses his mobile phone to help workers in this industrial area send money home.

Thanks to Novopay Solutions, he earns some extra money by carrying out simple banking operations from his store on Hegganahalli Main Road.

“I not only have more customers but also earn enough to meet my needs. I keep my shop open from 8.30 am to 10 pm,” he says.

He gets busy around the 10th of every month, when workers send money to their families across the country. “As word gets around, more and more people are coming. I also pay utility bills and recharge their mobiles,” he explains.

Some workers are now asking if he also accepts deposits. Migrant labourers find his services convenient: they drop by whenever they find a spare moment. “Banks have fixed hours and labourers can’t go there during work,” says Saleem.

 If the kirana store in your neighborhood is working as your personal bank or ATM, it is likely to be in the Novopay network.

This financial solutions start-up was founded in 2014 by Srikanth Nadamuni, Gautam Bandyopadhyay and Sridhar Rao.

It uses the mobile phone as a medium to help banking reach those among India’s non-banking population of 500-600 million.

Nadamuni, chairman of Novapay, says, “The tail of non-bank users in the country is pretty long... half the country is still unbanked.”

With Internet penetration low, core banking has achieved little. “With one billion people holding Aadhaar cards and ordinary cell phones, we are converting the ordinary kirana store into a banking outlet. With its biometric system, the level of assurance in Aadhar is high,” he says.

Nadamuni, who once headed the technical team of Aadhaar at UIDAI, describes Novopay’s offering as a “no-frills bank account.”

People can open an account in a store, and deposit and withdraw money. Every transaction is authenticated by Aadhaar, he says.

The system involves three pillars: a mobile phone, a store and an Aadhar card, and the transactions are all paperless.

A customer gets a message on the mobile, and a receipt for money transactions. With a mobile, anyone can open an account in a kirana store to become part of Novopay.

Money is transferred to any bank account or store in the network. The payee can receive money by just showing an SMS. “We have installed fingerprint scanners and printers at each store at a cost of `15,000. The shop owner just needs a smart phone to start operations,” he says.

Novapay runs its 24/7 Network Operations Centre from its Sarjapur Road office in Bengaluru. Here, each and every operation at the 45,000 kirana stores can be verified and checked.

The retailer can even be alerted to charge his phone if the battery has drained out. Using a cloud network, the NOC manages to collect and manage huge amounts of data.

With the smart phone penetration in our country at 29.8 per cent, more than 70 per cent of the population don’t have access to the Internet.

Novopay has tied up with Ratnakar Bank, Axis Bank, IDFC and Bank of India to deliver its services through a consumer app.

In two years, since it started in April 2014, Novapay has carried out transactions worth Rs 600 crore. Today, it services three lakh bank account holders and e-wallets.

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