plutos ONE – How two founders are unlocking value in Middle India by sharing the customer relationship with banks

Named after the Greek God of Wealth, plutos ONE is a one-stop platform for bank customers to manage all their commerce needs.

 New Delhi (India), June 2:

Banking in India

India boasts the second-largest banked population and one of the most dynamic and advanced fintech sectors in the world. Those achievements seem at odds with the fact that fewer than 3% of Indians have a credit card and fewer than 25% have ever made a digital transaction. Part of the responsibility rests with the banks. Stuck between restrictive mandates and an emphasis on short-term profitability, Indian banks are unable to provide their customers the services they need. There are 31 credit card issuers and 304 banks on the UPI network, but since there are more than 2000 banks in India, most Indians have their Savings Accounts with banks that don’t issue credit cards, don’t offer UPI payments and don’t have any digital offering.

Fintech startups, in turn, tend to focus on acquiring customers at the top of the wealth pyramid. The calculation here is that the Lifetime Value (LTV) of such customers justifies the Customer Acquisition Cost (CAC) but below a certain threshold the spend on acquisition may not be worth it. The end result is that services accrue to those of us in Tier 1 cities but are unavailable to customers in smaller cities.

“When we looked at this situation,” says plutos ONE Co-founder, Rajjat Gulati, “we realized that the problem wasn’t one of acquisition but of access. After all, with more than 80% of India’s adult population having savings accounts, acquisition has, effectively, already been done once. Any fresh acquisition would be inefficient and expensive.”

The plutos ONE Solution

What’s missing, he explains, is access for the banks and their customers to solutions that are already available to the more digitally privileged consumers. This is where plutos ONE comes in. At one end, plutos ONE aggregates Banking Commerce providers. At the other end, plutos ONE uses these services to provide banks with increased engagement and monetization of their customers. The end result is a platform that complements the bank’s offering and provides users with a one-stop-shop for all their digital financial needs.

Gulati explains, “Every bank we meet has similar aspirations. They want to be able to offer their customers commonly-used services like bill payments, recharges, and banking commerce. This not only keeps their customers from using, and being poached by, D2C fintech platforms but it also increases the per-customer monetization for the bank by keeping all transactions within their systems.”

Banks’ Approach to Digital

The larger banks have taken different approaches to providing their customers with more digital services.

Some are embedding services within their own mobile apps or launching secondary apps to offer non-core-banking services. ICICI and HDFC with their multiple apps, Bank of Baroda’s BOB World and SBI’s YONO platform come to mind. Some banks engage third-parties to manage their digital platforms. HDFC SmartBuy is one such example. The most technologically advanced banks have tied up with neobanks that create digital-only banking interfaces. But all of these approaches are limited in the number of banks and, consequently, the number of people they can reach, the founders of plutos ONE believe. “There are, perhaps, 10 banks that have the technology to support neobanks,” Gulati says. “Another 15 banks that can create decent apps. What about the next 500 banks? Or the 1000 banks after those? None of them have the money or scale or product wherewithal or technological prowess to make banking commerce and other digital services available to their customers. But we do.”

The plutos ONE Model

The founders knew early on that their objective of Banking-Commerce-for-All dictated how their platform would manifest. For one, they could not invest the time or money to offer all the services themselves.

Instead, plutos ONE depends on third-parties to deliver the actual services. This allows the platform to not just curate the most robust services on the platform but also allows newer services to be integrated quickly.

They couldn’t afford to create custom solutions for each bank they tied up with. With many years of working with banks, the founders knew that those conversations tend to get drawn out across many years. Instead, they created a standalone platform. And they offer it to banks as an engagement solution.

Gulati says, “We have engagement programs for credit cards wherein we incentivize new card issues, card activations, regular monthly usage as well as increasing the average spend per user. We have similar programs for debit cards, we help reactivate inactive accounts, and we help banks monetize their bill payment APIs. And we do this all for free. What’s not to love?” He adds, “Banks also appreciate that we don’t offer competing services, don’t need any tech integration, and don’t ask for user data. These characteristics were vital to our design so that we could offer the same level of service to the customers of the smallest cooperative banks as to those of the largest PSUs and could execute quickly.”

The Road Ahead

plutos ONE’s immediate goal is to bring on board as many banks on to the platform as they can. Gulati says they have a target of signing 200 banks – mostly Cooperative Banks – over the next 18 months.

Advanced discussions are currently underway with nearly a dozen banks, including some large PSUs. In terms of services the platform will see Bill Payments go live in March and Banking Commerce, including general e-tailing, travel and online pharmacies, immediately after. These, the founders believe, are the most effective at generating trials for digital platforms. The plan is to add many more services, but getting credit in the hands of their women customers is the highest priority for Rohit and Rajjat. They believe that with credit comes financial agency and with financial agency comes financial value-creation.

Contact: [email protected] +91 99106 29998 (Co-founder) LinkedIn: https://www.linkedin.com/in/rajjatgulati/