In India’s rapidly evolving fintech landscape, while major payment companies concentrate their efforts on metro markets, one company has quietly carved out a different path. Airpay Payment Services, a Mumbai-based fintech startup founded in 2012, has embarked on an ambitious mission to democratize financial services by extending FinPay solutions beyond India’s mega cities into the underserved tier-2 and tier-3 markets. This strategic pivot represents more than just geographical expansion—it embodies a fundamental shift toward financial inclusion that could reshape how digital payments penetrate rural India.
The Genesis of Rural Financial Inclusion
Airpay’s journey began as a conventional payment gateway provider, initially targeting online payment solutions for e-commerce and retail markets. However, the company’s leadership, led by co-founders Kunal Jhunjhunwala and Amit Kapoor, recognized a massive opportunity that their competitors were overlooking. With technology at the core of its operations, Airpay chose to expand into tier II and III cities, relying on its existing business of payment gateway infrastructure to build something unprecedented in Indian fintech.
The company’s vision crystallized around a simple yet profound observation: while urban India was becoming increasingly digital, millions of Indians in smaller cities and rural areas remained excluded from the formal financial ecosystem. This realization led to the creation of the Airpay Vyaapaar network, a revolutionary approach to bringing financial services to India’s heartland through local entrepreneurs and small business owners.
The Vyaapaar Network: A Grassroots Revolution
The cornerstone of Airpay’s rural expansion strategy is the Airpay Vyaapaar network, which transforms local kirana stores and mom-and-pop shops into financial service points. This network addresses a critical gap in India’s financial infrastructure by leveraging existing retail relationships and trust networks in smaller communities. In the past two years, Airpay has launched the Airpay Vyaapaar network across India to plug the last mile in financial services, achieving this without any marketing or advertising spend—a rarity in the world of fintech.
The company has claimed to have built a network of 250,000+ vyaapaaris, catering to 3.5 million+ consumers across 533 districts and 5,700 villages. The monthly enrollment rate continues at above 10,000 vyaapaaris, demonstrating the organic growth and acceptance of this model in rural markets. This grassroots approach has enabled Airpay to penetrate markets that traditional fintech companies find challenging to access.
The Vyaapaar model solves multiple problems simultaneously. For corporate clients dealing with cash collection challenges, it provides a distributed network of trusted collection points. For rural consumers, it offers accessible financial services within their communities. For local entrepreneurs, it creates new revenue streams and business opportunities. This win-win proposition has been fundamental to the network’s rapid expansion.
Addressing the Last-Mile Challenge
Airpay’s expansion strategy directly addresses one of India’s most persistent fintech challenges: the last-mile connectivity problem in financial services. Having served multiple companies to solve a no-frill and highly secured pipeline for accepting digital payments, Airpay stumbled upon the growing need for receivables management at the other end—the salespersons. The company discovered that field representatives from various B2C companies faced significant challenges in depositing cash collections into banks, often losing income opportunities due to long waiting times.
This insight led to a strategic focus on identifying multiple kirana stores and mom-and-pop shops that could serve as collection and service points. By transforming these existing retail outlets into financial service hubs, Airpay created a distributed infrastructure that brings formal financial services to the doorstep of rural consumers. This approach reduces the need for expensive physical infrastructure while leveraging existing trust relationships between local store owners and their communities.
The company’s focus extends beyond simple payment collection to comprehensive financial services. Airpay is moving into what it calls ‘assisted eCommerce,’ which helps individuals and families outside of India’s largest cities move more fully into the digital ecosystem. These consumers understand and use mobile technology, but they are not necessarily comfortable shopping or transacting on their mobile devices independently.
Technology-Driven Financial Inclusion
Airpay’s approach to rural fintech combines sophisticated technology infrastructure with human-centric service delivery. The company has developed a comprehensive platform that provides solutions such as tax management, expense management, payout solutions, utility bill payments, payment cards, BFSI solutions, and logistic payments. This integrated approach ensures that rural consumers have access to the same range of financial services available in urban areas.
The technology infrastructure supporting the Vyaapaar network is designed to work effectively even in areas with limited digital infrastructure. By focusing on mobile-first solutions and ensuring compatibility with basic smartphones, Airpay has made its services accessible to users across the digital divide. The platform supports multiple languages and uses intuitive interfaces that require minimal technical expertise from both vyaapaaris and end consumers.
Furthermore, Airpay has integrated its services with various digital payment rails, including the Unified Payments Interface (UPI), enabling seamless transactions across different platforms. This interoperability ensures that rural consumers can participate in India’s broader digital economy while maintaining the security and convenience they expect from financial services.
Strategic Partnerships and Expansion
Airpay’s expansion beyond mega cities has been facilitated by strategic partnerships that extend its reach and capabilities. The company has partnered with Oracle Hospitality to provide payment solutions for hotel customers, and with Wix to enable seamless digital payments for business owners in India. These partnerships demonstrate Airpay’s ability to integrate its rural-focused infrastructure with broader business ecosystems.
The company has also made strategic acquisitions to enhance its service offerings in tier-2 and tier-3 markets. Airpay acquired personal financial management startup Finfinity Tech and expanded its financial services reach with the acquisition of Finmapp. These acquisitions have strengthened Airpay’s ability to offer comprehensive financial services to rural consumers, from basic payment processing to advanced personal finance management tools.
Additionally, Airpay has integrated its services with the Open Network for Digital Commerce (ONDC), positioning itself as a key enabler of digital commerce in smaller cities and rural areas. This integration allows local businesses in the Vyaapaar network to participate in the broader digital commerce ecosystem, creating new opportunities for economic growth in underserved markets.
Economic Impact and Job Creation
Airpay’s mission to extend FinPay beyond mega cities has significant economic implications for India’s rural economy. In the past decade, Airpay has grown from three to 360 people-strong, with the company establishing new offices in tier-2 cities to tap into local talent pools. Sensing the talent shift to hometowns, Airpay quickly opened a new office in Kochi and saved costs without cutting any corners on salaries and bonuses. “Kochi has become our largest development hub and gives us ample talent and space to scale up in the future too,” notes company leadership.
The Vyaapaar network itself has created thousands of micro-entrepreneurship opportunities across rural India. By enabling local store owners to become financial service providers, Airpay has created new revenue streams for small businesses while improving their integration into the formal economy. This model has proven particularly effective in areas where traditional banking infrastructure is limited or expensive to establish.
The economic multiplier effect of Airpay’s rural expansion extends beyond direct job creation. By facilitating easier access to financial services, the company has enabled increased economic activity in rural areas. Small businesses can more easily manage their finances, individuals can access credit and insurance products, and the overall velocity of money in these communities has increased.
Challenges and Solutions in Rural Fintech
Operating in tier-2 and tier-3 cities presents unique challenges that Airpay has had to address through innovative solutions. The primary concern for fintech companies in India is the lack of awareness of financial inclusion in rural areas. Most tier-2 and tier-3 cities have little knowledge of the digital world, requiring extensive education and hand-holding to drive adoption.
Airpay has addressed this challenge through a combination of technology and human touch. The vyaapaaris in their network serve not just as service providers but also as educators and advocates for digital financial services. This approach has proven more effective than traditional marketing campaigns, as it leverages existing trust relationships and provides ongoing support for new users.
Infrastructure limitations, including inconsistent internet connectivity and limited smartphone penetration, have been addressed through robust offline capabilities and adaptive technology solutions. Airpay’s platform is designed to work effectively even in low-bandwidth environments and provides fallback options for areas with connectivity issues.
Language and literacy barriers have been overcome through multilingual interfaces and visual design elements that reduce the need for complex text-based interactions. The company has also invested in training programs for vyaapaaris to ensure they can effectively assist customers who may be uncomfortable with digital interfaces.
Global Ambitions and Scalable Model
Airpay’s success in extending financial services beyond India’s mega cities has not gone unnoticed internationally. The company has begun expanding its model to other emerging markets, particularly in the Middle East and Africa. Being a tech company and having demonstrated success in high competition, high-growth markets such as India, Airpay now intends to capture a fair market share in these regions.
“There is a huge demand for white labelling and being a reputed player in the space, we harbour global ambitions,” according to company leadership. This international expansion strategy leverages the scalable nature of the vyaapaar model, which can be adapted to different market conditions while maintaining its core focus on financial inclusion and grassroots service delivery.
The company has made strategic forays into the African and Middle East digital-first financial services space, recognizing that many of the challenges faced in rural India—limited banking infrastructure, low financial literacy, and the need for trusted local intermediaries—exist in these markets as well.
Future Prospects and Market Impact
As India continues its journey toward becoming a $5 trillion economy, the role of companies like Airpay in driving financial inclusion becomes increasingly critical. According to NASSCOM and Red Seer reports, by 2026, 58% of new user acquisition for consumer internet startups will be from non-metros, highlighting the importance of Airpay’s strategic focus on these markets.
The company’s integrated omnichannel financial services platform positions it well to capitalize on this trend. With an annual revenue of ₹129 crores as of March 2024 and a current valuation of ₹92.2 crores, Airpay has demonstrated the viability of the rural fintech model. The company has achieved profitability while maintaining its focus on financial inclusion, proving that serving underserved markets can be both socially impactful and commercially successful.
Airpay’s expansion has also contributed to the broader trend of startups shifting to tier-2 and tier-3 cities in India. As digital penetration deepens and government support continues to strengthen, the company’s model serves as a blueprint for other fintech companies looking to expand beyond traditional urban markets.
Conclusion: Redefining Fintech’s Geographic Footprint
Airpay’s mission to extend FinPay beyond India’s mega cities represents a fundamental shift in how fintech companies approach market expansion and financial inclusion. By focusing on tier-2 and tier-3 cities and building a network of local financial service providers, the company has demonstrated that rural markets are not just underserved—they are underestimated.
The success of the Vyaapaar network proves that effective financial inclusion requires more than just technology; it requires understanding local contexts, building trust relationships, and creating sustainable economic opportunities for local communities. Airpay’s approach combines the scalability of digital platforms with the effectiveness of human networks, creating a hybrid model that bridges the gap between traditional banking and modern fintech.
As India continues to digitize its economy and more companies recognize the potential of tier-2 and tier-3 markets, Airpay’s pioneering work in rural fintech will likely serve as both inspiration and blueprint. The company’s mission extends beyond expanding its own business—it’s about expanding the boundaries of financial inclusion and ensuring that India’s digital transformation reaches every corner of the country.
In a fintech landscape often dominated by headline-grabbing urban success stories, Airpay’s quiet revolution in rural India demonstrates that the most significant impact often comes from serving those who need it most. By extending FinPay services beyond mega cities, Airpay is not just building a business—it’s building the financial infrastructure for India’s inclusive economic future.
