India is one of the world’s largest and fastest growing markets for electric vehicles (EVs). According to the Ministry of Road Transport and Highways, the country’s EV sales exceeded one million units in the first nine months of 2023, accounting for 6.4% of total automobile sales . The focus is on two and three-wheel vehicles – the scooters and rickshaws used in urban areas.
Mainstream adoption of these EVs will be an essential component for the country to achieve its 2070 net-zero target. This will involve ongoing government support, as well as the build-out of the necessary infrastructure – most notably the network of charging stations that will power India’s electric mobility ambitions. According to the Confederation of Indian Industry, more than 400,000 additional chargers will be needed annually.
Driving India’s EV ambitions
Major industry players have been supporting this roll-out. Fortum, a Nordic clean-energy company with offices in 12 countries, is installing fast-charging stations across the country. The burgeoning Indian EV market is Fortum’s first location outside Europe. Under its domestic consumer business, Glida (Fortum Charge & Drive), its fast chargers are already in 16 primary locations, including major cities like New Delhi, Mumbai and Bangalore .
Successful charging networks not only rely on broad coverage to ensure ready availability to users: a convenient, straightforward and transparent payment system is crucial.
The enabling role of payments
With Glida’s customers having to provide payment information every time they used a charging point, market research showed that they were looking for a simpler and more efficient customer journey and real-time transaction tracking. A pre-authorised physical card or digital wallet linked to an app was identified as a preferred solution for Glida. This would allow customers to better monitor their spending, and offer the company seamless collection of customer payments, eliminating customer credit risk.
Driven by two key objectives – minimise the end-customer credit risks associated with the use of unmanned charging stations, and attract customers by delivering payment flexibility and an enhanced user experience – Glida began the search for a new and improved digital solution in partnership with BNP Paribas.
Shreeram Sethuraman, Head of Transaction Banking, BNP Paribas India, said: “We saw the opportunity to help propel Fortum’s business in India and was excited to play our part not only as a service provider but also a partner to help them achieve their business objectives in the EV industry, a sector that is in its sunrise.”
It was also vital to make sure that the solution was compatible with other charging station providers. Otherwise, users would have to carry multiple cards, one for each provider they use, offsetting the app’s other benefits.
Creating an industry first
No domestic open-loop card or digital wallet existed in the market. Taking a co-creation approach, a co-branded open-loop payment solution was developed, using Application Programming Interfaces (APIs) to connect to Indian payments fintech Pine Labs’ merchant acquiring platform.
“Every time we get a chance to co-ideate on a new product for clients, working with their different teams, we get that much deeper an understanding of the workings of their business. We’d like to thank the Glida team for going on this fantastic journey with us.” Sethuraman added.
With that connection in place, Rupay, India’s global card network manages the settlement between the issuers and card acquirer. Unified Payments Interface (UPI) integration provides instant interbank fund transfers, which reduces the merchant discount rate to zero, under an Indian government subsidy.
The resulting “first-of-its kind” pre-authorised physical and virtual card payments offering is recognised at any charging station, even outside the Glida network, and many other e-commerce and physical stores across India.
Multiple user advantages
End users can now monitor transactions, order and connect cards to their account, and search for charging stations – all in one single app. The solution also includes a loyalty point system. Additionally, the app enables the use of a virtual version of the physical co-branded card. This can be augmented with a small physical charging key equipped with radio frequency identification (RFID) to trigger a pre-authorised payment at a charging station.
This combination of RFID technology, a mobile app, and pre-authorised physical and virtual cards was a first for India’s EV charging industry.
“Increasingly, corporates look to banks for more than the traditional banking products and services. To be a true partner to our clients means we have to always be creative and ready to innovate,” Sethuraman concluded.
Partnering across the payments space
As a co-creation partner for corporates, BNP Paribas had access to the fintech community and identified scope to develop a bespoke solution. The right solution for Glida not only had to focus on the payment aspect, but also on the end-user experience, leading to the development of a seamless, “single-tap” process. This meant the Bank’s chosen fintech partner had to meet these specific requirements.
Pine Labs, an Indian fintech was selected out of 50 fintech companies to provide this end-to-end platform as the only domestic vendor capable of offering access to the three primary cash collection points: card-present point of service (POS) terminals and ecommerce platforms. It is also a licensed prepaid card issuer.