Paytail: Revolutionizing Offline Retail with AI-Powered Paperless EMI for Bharat

January 3, 2026 12 min read

"85% of India’s retail still comes from small mom-and-pop counters, and no one is really solving for them." This realization led Vikas Garg, a corporate banker turned entrepreneur, to co-found Paytail. By bringing instant, paperless EMI solutions to the millions of retailers in Tier 2 and Tier 3 cities, Paytail is unlocking a hidden gold mine in the $300 billion discretionary spend market of Bharat.

While e-commerce giants and large-format retailers have sophisticated tools to convert customers through credit, the small merchant in a non-urban market has traditionally been left behind. Paytail bridges this gap with a deep technology stack that connects large brands, local retailers, and top-tier financial institutions, ensuring that a consumer can buy anything—from a bicycle to a set of car tires—with digital credit approved in nanoseconds.

The Credit Gap in Bharat: India is a credit-starved market. While established players focus on urban malls, 90% of the population lives in areas where high-end financing tools are absent. Paytail targets these "underserved" geographies where credit is the primary blocker for high-ticket purchases.

The Playbook: Beyond the Urban Mall

Vikas Garg’s background at IDBI and IndusInd Bank involved structuring multi-million dollar deals for Blue Chip companies. However, his tenure at the US-based fintech C2FO revealed a different opportunity: the bottom end of the supply chain. He saw that while the top 10% of India was well-served, the "Bharat" segment was a vast, untapped frontier.

"Large players like Bajaj Finserv are magnificent institutions, but their model is highly skewed towards urban markets and large-format stores," Garg explains. "It doesn't make sense for them to position a person in a small shop in a Tier 3 city. To disrupt that market, you need a powerful tech stack, not just manpower."

The Paytail 4-Layer Architecture

Enterprise Layer: Deep integration with the ERP/CRM of brands like Samsung, Vivo, and Hero Cycles to manage schemes and dealers.
Merchant Layer: An app that onboards retailers in under 60 seconds with GST validation and real-time sales tracking.
Lending Layer: Real-time API links with institutions like ICICI Bank and HDB Financial for nanosecond credit decisions.
Consumer Layer: A seamless SKU-management framework where users select specific products and access credit instantly.

AI and the 5,000 Data Point Decision

Lending in Tier 2 and 3 cities requires more than just a CIBIL score. Many potential borrowers have limited formal credit history. Paytail's secret sauce is its AI/ML engine that crunches over 5,000 data points for every consumer—including SMS data, bureau reports, and alternative data sources—to provide a real-time credit decision.

This allows Paytail to activate categories that were previously "non-EMI." For example, replacing car tires is a ₹20,000-₹25,000 expense. By partnering with Apollo Tires, Paytail enabled small garages to offer EMIs, a move that saw immediate and massive adoption. The same logic was applied to the bicycle market, where Paytail now owns nearly 70% of the market share through brands like Hero and Firefox.

Paytail Impact by the Numbers

80,000+: Merchants onboarded onto the platform across India.
70%: Market share in the Indian bicycle EMI segment.
5,000+: Data points analyzed per consumer for AI-driven credit.
$300 Billion: The discretionary spend market in India Paytail is tapping into.
60 Seconds: Time taken to onboard a new merchant digitally.

The Lockdown Pivot: From Despair to 9X Growth

Paytail's journey wasn't without its "heart-stopping" moments. The company began commercial operations in April 2021—exactly when the second wave of COVID-19 hit India, leading to a nationwide lockdown. For a business built on offline retail, this was a potential death sentence.

"We were scared. The whole country was locked down," Garg recalls. "But we decided to do something crazy: we brought small merchants onto Zoom calls." This strategy turned the crisis into an opportunity. While every other player had pulled back their field staff, Paytail was the only tech platform still onboarding merchants. They began signing up 400 merchants a day through webinars, establishing a massive footprint while the competition was stationary.

"Entrepreneurship is just to keep going. There will be highs and lows, but a founder's job is to realize that every overwhelming situation is momentary. The vision must be long-term, and the execution must be persistent."
— Vikas Garg, Co-founder, Paytail

Leadership and the Priority List

As Paytail scaled from a team of three to 180 people, Garg learned that the "overwhelming" nature of a startup never changes—it only shifts in scale. "When we were three, we thought having 10 more people would give us respite," he laughs. "Now we are 180, and things are even more overwhelming."

His advice to founders is to master the art of prioritization. Out of a "laundry list" of important tasks, you must figure out what needs to be solved on what timeline. This focus on surgical execution has allowed Paytail to maintain its unit economics while disrupting a massive, fragmented market.

Founder's Wisdom for the Next Billion

Ground-Level Research: Don't trust the idea in your head. Garg and his co-founder met 900+ retailers personally before writing a single line of code.
Institutional Experience: If you want to build a large institution, spend time working in one first to understand the "Ivy League" of corporate structure.
Solve for the Merchant: The merchant is your primary customer. If you add value to their daily operations, they will push your product to the consumer.
Paperless is Power: In Tier 3 cities, physical paperwork is a friction point. Real-time digital validation is the only way to scale.

The Future: Unlocking Hidden Potential

With 80,000 merchants and growing, Paytail is just scratching the surface of the "Gold Mine" problem. By digitizing the bottom end of the supply chain, they are helping brands sell more and helping consumers level up their lives through responsible credit. As the Indian retail market continues its shift towards digital, the "Pay and Retail" (Paytail) integration will be at the forefront of the Bharat revolution.

"We wanted a name that reminisced exactly what we do," Garg concludes. "Payment plus Retail. We are here to make every small counter in India as powerful as an urban mall."

The Gold Mine Problem: CXOs at large corporates often know where their products go, but they lose visibility at the retail counter. Paytail provides that visibility, helping brands unlock the hidden potential of their dealer networks through data.

Key Takeaways

For Fintech Founders: Unit economics in Bharat requires high-tech, low-touch models. If you can't onboard a merchant in 60 seconds, you can't scale.

For Retailers: Offering EMI isn't just about credit; it's a sales tool. It allows you to upsell a customer from a basic model to a premium one without increasing their immediate cash burden.

For Consumers: Paperless credit is the new currency. Your digital footprint is your gateway to owning the products you need for your family's future.

About the Guest

Vikas Garg is the co-founder of Paytail. A corporate banker with over 12 years of experience at IDBI and IndusInd Bank, he previously led the India business for C2FO, where he raised $100 million in capital finance. His deep understanding of supply chain financing and corporate credit has been instrumental in building Paytail's multi-layered tech stack that serves tens of thousands of merchants across India.