With country mitigating the challenge of the ongoing pandemic, the industry leaders expect the government to create an enabling environment for business to grow by announcing key reforms and policy frameworks in the upcoming Union Budget 2021 which is slated to be presented by FM Sitharaman on Feb 1, 2021.
Anand Kumar Bajaj, Founder, MD & CEO, PayNearby said that he hopes this Budget will take into consideration the tough working condition of the business correspondent network (BC) and make a few regulatory changes to ensure the viability of a community that has been vital to the cause of financial inclusion in the country.
“To continue sustaining the competitive advantage in digital proliferation in India, restoring normal MDR on transactions will incentivise the digital ecosystem and facilitate a smoother growth trajectory towards innovation,” Bajaj said.
Stating that 93% of the business correspondent network has been committed to working in tier 2 and tier 3 towns, serving as the sole point of cash disbursal in locations with limited financial infrastructure, Bajaj said, “The commission rates for BC services are very low to make it a profitable business.”
According to Bajaj, since BCs, by default, come under the 27% GST and 5% TDS on cash withdrawal even after the tax act having enabling provisions, “this makes it difficult for them to stay afloat.”
Headquartered in Mumbai, PayNearby is part of Nearby Technologies, a DIPP Certified Fintech company registered under central government Startup India program, set up in April 2016.
The company operates on a B2B2C model, where it partners with neighbourhood retail stores and enable them with the tools to provide assisted financial and digital commerce services to their local communities.
The company claimed that local communities across 17,000 plus PIN codes access PayNearby partner stores to avail a range of services including cash withdrawal, cash deposits, money transfer, savings, insurance, travel, digital payments, and access to government benefits.