When RBI Governor, Raghuram Rajan announced the names of 15 corporate entities who would be awarded licenses to operate Payment Banks, he was looking to fulfill a deep need for financial services in the semi-urban and rural areas of the country. India has millions of people who are financially under-served and unbanked. Accordingly to Ashutosh Pande, this is due to the prohibitive costs of delivering cash and supplementary services to every corner of the country. Telecom companies with innovative digital financial services like Vodafone’s M-Pesa and Airtel Money have stepped in to fill the void.

Mr. Pande built his patented digital cash solution, PaySe™, on the premise of reducing the cost of disbursing cash as well as maintaining the accessibility of the telecom money services. Networked India speaks to him about what PaySe™ means for the unbanked Indian, how his company is partnering with microfinance and Payment Banks to provide last mile financial services and the technology behind his revolutionary services which makes ATMs redundant!

Networked India (NI): PaySe™ is the world’s first offline digital cash solution. Tell us about this unique financial product and what led to Nucleus Software founding such an innovative solution.

Ashutosh Pande (AP): PaySe™ is the world’s first offline digital cash solution designed and created with an aim to democratize money. Democratization of communication drove the velocity of information and democratization of money will drive the velocity of cash. PaySe™ utilizes the latest advancement in mobility, big data, open source and crypto currency (primarily tokenization) to deliver the world’s first secure offline peer to peer payment solution. PaySe™ is digital cash operating within the regulatory guidelines of RBI. PaySe™ delivers the convenience of a card with the fungibility and atomicity of cash.


PaySe™ was incubated with a vision to make 100 rupee loans possible and economically profitable. One of the key deterrents to making this possible is the high cost of disbursement and re-collection of funds; given the physical nature of money. Learning from the music industry, an idea was conceived to digitize cash and deliver it via the net while keeping intact the ownership and usage rights. By digitizing cash we hope to enable the democratization of money and simplify its distribution and collection.

NI: Can you tell us about the technological innovation used in PaySe?

AP: Our solution, PaySe™, utilizes the latest advancement in mobility, big data, open source and digital currency (primarily tokenization).

PaySe™ solution consists of three key components:

(a) PaySe™ Processing Platform is the interface between the real world and the digital world, in accordance with the regulatory guidelines

(b) PalmATM™ application converts a smart phone into a mobile ATM. This application provides the same access as a conventional ATM including the ability to withdraw and deposit money

(c) PURSE™ is a mobile to carry digital money. PURSE™ is designed to pay or receive digital cash. PURSE™ is just a mobile that securely stores the digital token.

(d) PaySe™ card is a NFC card to carry digital money. PaySe™ card is designed for users who generally receive money from sources like DBT, Pension, etc and then spent it within ecosystem.

PaySe™ architecture has been designed to work in an offline distributed manner, with the individual device PURSE™ carrying its details in a self-contained secure memory.

NI: What are the main features of PaySe™? How will it fulfill the need for cost effective delivery of financial services to the last mile?

AP: PaySe™ is digital cash. It retains the attributes of cash – offline, peer to peer and secure. The main feature of cash is that anyone can pay anyone, at any point of time. Cash doesn’t need any data or cellular network for transaction between two people. PaySe™ mimics similar behaviour and allows a user to pay to other users completely offline anytime without any access to third party medium. Imagine you can pay digitally at the highest peak of Himalayas to buy Maggie or 30,000 ft above the ground for getting your meal in the airplane. PaySe™ has digitized cash while keeping all key attributes intact.

Today the biggest challenge for financial institutes (FI’s) is to provide last mile services for cash logistics. With huge cost of cash at the last mile, tapping this space was never seen as an opportunity to bankers. With PaySe™ financial institutes can drastically reduce cost of cash and build number of innovative financial products for serving the financially underserved society of India. FI’s don’t need to open ATM’s in rural and semi urban areas. With PaySe™ enabled technology, smartphone can become PalmATM™ which will digitize cash flow for entire village. No need to wait for smartphone penetration for giving financial services access at last mile. One person with smartphone can digitally serve entire village!

NI: PaySe™ is also partnering SHGs and micro-finance institutions in Haryana and Rajasthan. Tell us some more about these collaborations and how does it aim to serve people?

AP: PaySe™ is digital cash and wherever we see challenges of cash logistic we see our natural play. Microfinance is first such interaction point after our launch in Dec, 2015. We started solving some of the key challenges of Microfinance institutes.

The key operational challenges of a micro finance business in general include:

  • High cost of cash primarily due to loan repayment collection in cash
  • Misappropriation of cash by field executives
  • Field executives are waylaid
  • Risk of dacoity in the branches
  • Risk of cash handling fraud in the branches
  • Low Productivity of the field executives, due to logistics involved in cash
  • Reconciliation of cash
  • Revenue loss due to counterfeit currency notes collected during cash repayment
  • Personal safety

Due to the above challenges most microfinance institutes are not able to operate at their full pace and serve at large. With PaySe™ implementation we have seen increase in field executive productivity by 100%, no risk of misappropriation, no risk of mugging and real time reconciliation.

We are pleased to see lot of interest in microfinance space and we are already commercially live with two MFI’s in such a short span.

NI: Give us some background about the founder/s and team at Nucleus Software – the brains behind PaySe™.

AP: I, Ashutosh Pande am the Founder and Chief Innovation Officer of PaySe™ and an Executive Vice President at Nucleus Software. I conceptualised PaySe™, a revolutionary Patent Pending, secure, peer to peer offline digital cash solution which aims to democratize money and address one of the Achilles heel in Financial Inclusion, the ‘Cost of Cash’.

I have industry experience of taking high-tech consumer products to market, and was responsible for spearheading PaySe’s product innovation. PaySe™ is the next-generation cash, a crypto token that can be used to make offline peer to peer payments.

Before conceptualizing PaySe™, I had earlier founded Arogya mHealth and MicroCom Consulting LLC. I was involved with SiRF Technology Inc. since its early days where I was instrumental in getting GPS inside mobile phones. After SiRF’s acquisition by CSR, I developed a Location Services Platform which later transformed into an Internet of Things (IOT) platform.

I have over 60 issued and pending patents and specialise in market creation for new technology and products. I have rich experience of nearly three decades in mobile technology and finance sectors with companies like Uptron India, NovAtel Communications, Intel, Japan Radio, SiRF and CSR (now a subsidiary of Qualcomm).

I am passionate about new technologies and support upcoming innovative ventures as a panel mentor at Young Nest Angel Fund. Till now I have mentored and invested in 5 start-ups across telecom, new age local-social and personal security sectors.

NI: How effective has PaySe™ been so far in fulfilling its objective? Recount a success story/example.

PaySe™ journey has been intellectually stimulating and gratifying. We’ve learnt a lot about the need of people at the bottom of the pyramid. It has been humbling to see countless women saving less than 50 Rupees (USD 0.75) a month. There is a sense of satisfaction that you are playing a small role in making these small savings happen. There is no better reward than the smile on a woman’s face after she has deposited money towards securing her family’s future.

NI: How do you envisage PaySe™ being used in Payment Banks and Small Finance Banks?

AP: Payment Banks:

PaySe Card

Objective of payments banks is to increase financial inclusion by providing small savings accounts, payment/remittance services to migrant labour, low income households, small businesses, other unorganised sector entities and other users by enabling high volume-low value transactions in deposits and payments/remittance services in a secured technology-driven environment.

Challenges for Payment Banks and how PaySe™ can address those challenges:

1. Increasing velocity of digital money: Payment Banks unlike other banks do not have income from lending and they are expected to play on volumes as they are likely to rope into their fold millions of customers who are currently not within the fold of the formal financial system. With PaySe™, cash and its transportation is digital, which drives high velocity of money.

Small Finance Bank

The purpose of the small banks will be to provide a whole suite of basic banking products such as deposits and supply of credit, but in a limited area of operation. The objective for these Small Banks is to increase financial inclusion by provision of savings vehicles to under-served and underserved sections of the population, supply of credit to small farmers, micro and small industries, and other unorganised sector entities through high technology-low cost operations.

Challenges for Small finance banks (SFB) and How PaySe™ can address those challenges:

1. Reducing operational cost: Current cost of cash in India stands at Rs. 22k crores and this will invariably increase with increase in inclusion. In order to serve larger sections of economy especially to the last mile, SFBs have to reduce the cost of cash and have to go digital. With PaySe™, cash can be digitised at the last mile and SFBs can provide different customised products at last mile.

2. Enabling Saving Vehicle: For successful and viable inclusion, SFBs have a challenge to enable the saving vehicle which will give them strength to build various new flexible banking products around it. With PaySe™, SFBs can take micro savings in digital form with almost no cost.

NI: What is the future of PaySe™? Do you see governmental initiatives like Make in India, Startup India playing a role?

AP: At PaySe™ we work with the publishers of money, the central bankers, to drive the digital money. Our long term goal is to be the digital money of choice for governments worldwide especially in developing and emerging markets with limited power, road and telecommunication infrastructure.

PaySe™ stands very much with key government initiatives like Make in India, Digital India and Startup India. PaySe™ is designed and implemented in India with key focus to server under-served society. JAM initiative has already inducted over 200 million people into the banking system. Use of DBT to Aadhaar-linked bank accounts has enabled direct deposit of government subsidy/payment to beneficiary’s account. However, the key challenge in the last mile remains intact. Once a citizen received the DBT in the bank account they need to withdraw it, most of the beneficiaries have to travel long distances (about 10-20 kms) to withdraw money as there are no ATM’s nearby, and even if they get one then the chances of money availability in those ATM’s is very less. Due to these hassles most of the beneficiaries try to withdraw money in one go resulting in money moving out of the banking system. Bridging the last mile is where PaySe™ can play a key role.