As the country’s payment landscape continues to expand, the focus is steadily shifting beyond metros. The growth of digital infrastructure, marked by the widespread adoption of QR codes (BharatQR, UPI QR), increased deployment of physical PoS terminals, and modern payment devices, has laid a strong foundation. While merchant onboarding has traditionally centred around Tier 1 and Tier 2 cities, rising e-commerce penetration and growing demand for premium products in smaller towns have prompted payment companies to redirect their focus toward Tier 3 to Tier 6 markets, which together comprise nearly 70% of the country’s population.
Yet, onboarding merchants in these regions introduces significant operational challenges. The process involves high costs related to device deployment, servicing, and after-sales support. In sparsely populated areas, where viable businesses are fewer, identifying merchants with the potential for sustained engagement adds further complexity. These dynamics require a more focused, cost-effective, and scalable approach to merchant acquisition and retention - one that can ensure long-term growth and inclusivity in India’s evolving digital payment ecosystem.
How Grant Thornton Bharat can support AI-driven merchant acquisition
With deep experience in managing the end-to-end merchant onboarding and servicing lifecycle, Grant Thornton Bharat works closely with leading banks and non-bank acquirers to enhance merchant stickiness and improve activation outcomes.
Our engagements have yielded insights into the behavioural and operational drivers of successful merchant acquisition, particularly in underpenetrated areas. Building on this experience, we have developed a proprietary tool that identifies high-opportunity geographies for onboarding new offline merchants. This tool uses a structured analysis of digital payment supply and demand to locate underserved areas and prioritise acquisition activity.
By combining AI-based analytics with domain knowledge, our solution offers a practical, sustainable, and data-supported path to expand digital payments infrastructure in India’s Tier 3–6 markets.
AI platform objectives and structure for merchant acquisition
Our aim is to deepen digital reach in underserved markets by delivering value to acquirers, empowering customers, and supporting broader goals of financial inclusion and economic progress.
The AI-based merchant acquisition platform supports merchant acquiring institutions by helping them:
- Identify and map opportunity pockets based on digital payment demand-supply data
- Conduct state-, district-, and village-level onboarding planning
- Deploy Field Service Executives (FSEs) strategically using AI-driven insights to target high-opportunity areas Improve field operations using API-enabled real-time insights
The tool is designed to assist in quarterly or annual onboarding exercise by enabling focused geographic targeting and workforce deployment. This is further enhanced by providing an API that integrates directly into acquirers’ platforms, enabling FSEs to access dynamic data while on the move.
Our approach
Delivering value to merchant acquiring institutions
Catchment area definition for FSEs
The tool will define specific catchment areas for each FSE, with differentiated catchments tailored to various products such as QR codes, soundboxes, and PoS machines.
Tier-wise segmentation
Catchments are segmented by city tiers, allowing targeted onboarding in Tier 3 to Tier 6 markets. This helps acquiring institutions optimise outreach strategies and align with schemes from RBI and government bodies.
Identification of high-potential pockets
The tool pinpoints specific sub-markets within villages or towns where merchant onboarding is more likely to succeed. For instance, within a village, it may flag sub-areas such as ‘Aa’ or ‘Ab’ as target clusters for activation.
Opportunity scoring
Each region or locality is assigned an opportunity score based on defined parameters. This helps prioritise geographies with the highest potential for merchant engagement and onboarding success.
Key deliverables
Real-time field support via FSEs
Merchant acquiring teams can empower FSEs with real-time, location-based insights through seamless integration with their business apps, enabling:
- APIs integrated with merchant apps allow FSEs to access real-time opportunity zones using latitude-longitude data.
- During visits, FSEs can tap to instantly identify nearby high-potential areas, dynamically updated with the latest insights.
- Clients benefit from an annual license and a per-click pricing model for smooth, scalable usage.
- Continuous tracking of location data helps identify nearby FSEs or markets based on composite scoring.
Quarterly and annual planning
Merchant acquiring institutions can use the platform for detailed planning, including:
- State-wise and district-wise market mapping.
- Village-level targeting strategies.
- Annual merchant acquisition targets.
- Hierarchical structuring of pocket areas (Tier > District > Village).
- Deployment planning for FSEs based on demand concentration and coverage needs.
AI-based merchant acquisition platform
A strategic AI-based platform to identify and onboard offline merchants in underserved Indian markets, boosting digital payment adoption.
