Can Scale and Service Coexist in the Business Correspondent Model? Lessons from the Field
In India’s journey toward financial inclusion, the Business Correspondent (BC) model has emerged as a powerful bridge connecting remote communities with essential financial services. Yet, one of the greatest tensions faced by the industry is the balancing act between scaling rapidly and maintaining high-quality service. How can a model built on local trust and personalization grow to reach millions—without losing its soul?
The case of PayNearby, a prominent player in the BC space, sheds light on how this challenge plays out in real-world settings and what solutions might hold promise.
Why Scaling Without Sacrificing Quality Is Hard
As a BC network grows, so does its operational complexity. With agents spread across thousands of locations, often in rural and connectivity-challenged areas, maintaining service consistency becomes a formidable task. Each new agent means more need for training, supervision, and tech support. Without proper systems in place, scale can lead to transaction delays, service errors, and ultimately, loss of trust.
Moreover, personalization—a hallmark of good BC service—tends to get diluted. Automation may streamline processes but cannot always replicate the nuanced support that rural customers, often unfamiliar with formal banking, require.
Then there’s the issue of affordability. Offering low-cost financial products is essential to reach India’s lower-income population. But making services too cheap can squeeze the margins that agents rely on, reducing their motivation and possibly compromising service delivery.
The PayNearby Playbook: Lessons in Sustainable Scaling
The PayNearby Playbook: Lessons in Sustainable Scaling
PayNearby’s approach has been to combine three core ideas: digitization, sachetization, and universalization.
- Digitization enables the delivery of services at scale, lowering transaction costs and allowing for real-time monitoring and resolution.
- Sachetization—breaking financial products into small, affordable units—makes offerings accessible and understandable to rural users.
- Universalization ensures that services reach even the most remote locations, treating financial access as a basic utility.
Critically, PayNearby leverages local trust by turning neighborhood retailers into BC agents. These familiar faces act as a reliable link between the formal financial system and their communities. The company invests in continuous training, provides AI-driven support tools, and designs financial products that are “as simple as mobile top-ups.”
Technology plays a major role here, but not as a one-size-fits-all solution. Instead, PayNearby uses AI to enhance, not replace, the human touch. AI handles complaint resolution, personalizes product recommendations, and supports training delivery. But when issues get too complex, trained agents step in—especially vital in regions where low literacy makes digital-only interactions inadequate.
The Road Ahead
The future of the BC model hinges on this very balance—achieving scale without compromising on the service quality that builds trust. Solutions must be hybrid: human-centric yet tech-enabled, cost-efficient yet empathetic, scalable yet rooted in local realities.
For players looking to replicate this model, the key lies in building systems that are flexible, feedback-driven, and anchored in the lived experiences of their customers and agents. Because in the quest to reach every Indian with financial services, it’s not just about how far you can go—but how well you serve when you get there.
