I was told by someone that the acquiring policy for cooperative banks is decided by NPCI or RBI, its not something in the hands of Cosmosbank or NPST, anyone has any views or ideas on this.
1 Like
Refer Thread 149 above for Aqcquiring policy
Answer is RBI to my limited understanding but notification came from NPCI
perfect, so this means that these events are not in control of the company or bank, controlled by regulatory.
1 Like
Below are my observations
a. NPST was earlier using only one Co-operative bank which was Cosmos Bank as Sponsor bank
b. As per NPST they got instructions from regulator to add more sponsor banks to remove the dependency from single bank
c. Addition of the new sponsor banks took longer time than expected which affected the Payment Platform as a Service business segment which generates 80% of the revenue
d. Now as the 2 sponsor banks have been added they will be able to provide the choice to new co-operative banks to use as a Sponsor and they will be able to onboard new banks without any hurdle
1 Like
dont think regulator can ask a 3rd party to add more sponsor banks. This they would have done as a derisking move after seeing the fiasco at Cosmos Bank. The delay most likely happened due to regulator asking for changes ( which would have been also formalised after multiple iterations ) and then getting these done on the payments platform.
1 Like
Wonât there be significant effort, expenditure and rebuilding goodwill in the marketplace to ramp up the payment platform again? Since we disrupted our services to our clients, and we might as well have been blacklisted by some of them for not upholding service agreements
From what I understand about the payments platform, it probably has clients each contributing revenue in large chunks (rather than granular among many small clients) So if one large client denies entertaining our comeback offering now then revenue growth from PP may be slow.
that view has been accepted by management and the view now is that apart from payments platform, they have launched more products and services, infact they advanced the development and launch of some which were slated to be launched 12 months later, so management has been proactive and also accepted the mess.
This is the biggest risk I see as of now. Bank usually have multiple vendors and they might be assistants to give the entire volume back to NPST. I donât think it would go to blacklisting but it will delay the time required for scaling to previous levels.
1 Like
Payment platform business from what I have understood does not caters to banks but to mostly payment aggregators and volume merchants who want to themselves integrate UPI on their website/app instead of using PG. Someone correct me if I am wrong.
I will try to summarize the issue (let me know if I understand it correctly):
What went wrong?
- NPSTâs Payment Platform as a Service (PPaaS) business had one cooperative bank as a sponsor bank.
- At the end of Q2 FY25, this bank changed its policies, requiring a re-evaluation of its acquiring model (merchant onboarding & transaction processing).
- This led to a halt in new merchant onboarding, reducing NPSTâs revenue from this vertical in Q3 FY25.
Transcript Reference:
âOur primary source was a bank from the cooperative segment. It was during the end of Q2 when the bank policies changed and the acquiring policy was to be relooked for the cooperative banks.â
Measures taken by NPST:
- Two new sponsor banks were added in Q3, one in the production testing phase and another in pre-production.
- Goal is to add 10 banks instead of relying on just 2-3 banks.
Transcript Reference:
âWe added two sponsor banks, not just one. Looking at the last quarter, as soon as we realized how quickly weâll have to get into this decision meticulously, we fast-tracked it. The vision is to add 10 banks.â
Now, this may have been a genuine oversight by the management, where they failed to anticipate this bottleneck. However, adding more sponsor banks will ultimately make their business operations more robust and future-ready.
From the customersâ perspective, though, this could have been an extremely frustrating experience. Businesses relying solely on NPSTâs platform, without a backup, may have suffered serious financial losses.
Only time will tell whether NPST can fully recover its revenues and how significantly its credibility will be impacted in the market.
4 Likes
I guess market got the explanation in last call.
3 Likes
does anyone know which banks have they tied up with?
Finally they are listing on main board
Stock already up 50% post the announcement!!
3 Likes
NSDL Payments Bank & SBM bank
1 Like
1 Like