While Star Health’s products were trusted by millions of policyholders, the payment infrastructure used to collect the premiums needed to be digitised.
(Note: Figures marked with * are indicative and illustrative in nature, based on typical outcomes observed across similar deployments)
- CLIENT Star Health & Allied Insurance
- INDUSTRY Health Insurance
- SOLUTIONS Payments Infrastructure · Merchant Distribution Network · PoS Terminals
- OPERATIONS Pan-India, multi-channel
Every insurance company has two products. The first is the policy — the promise, the coverage, the relationship with the customer. The second is the payment infrastructure that collects the premium, keeping that promise alive.
Star Health understood its first product exceptionally well. With a policyholder base spanning tens of millions of lives and a distribution network built across direct digital channels, hospital partnerships, and a 15,000-strong field agent force, the company had built one of India’s most recognised health insurance brands.
By 2019, the brand was processing enormous premium volumes across highly varied payment contexts: urban customers paying online, semi-urban policyholders relying on agents, and hospital-adjacent collections requiring PoS-grade reliability. The payments infrastructure had evolved incrementally. Systems were added over time to support different channels, creating fragmentation across collections, reconciliation, and settlement workflows.
Different systems at different points in the distribution chain. No single view of what had cleared, what was pending, or where a discrepancy had entered the ledger. The finance team carried the weight of that fragmentation every reconciliation cycle.
The decision to choose airpay wasn't just a coincidence. It was strategic — a deliberate choice to consolidate payments infrastructure with a partner whose core competency is building resilient, compliant, full-stack payment ecosystems for enterprise clients.
“The seamless payment processing across our channels has made our daily operations significantly more efficient — we finally have a single source of truth for everything that moves.”
— Finance Operations, Star Health & Allied Insurance
THE CHALLENGE
The Operational Cost of Running Payments at Scale Without Infrastructure to Match
Payment fragmentation in a high-volume, multi-channel business is a problem that compounds invisibly. No single incident seems like a big problem. A premium that fails silently at the gateway. A field agent collection that doesn’t attribute to the right policy code. A PoS terminal whose settlement cycle runs two days behind the digital channel beside it. Individually, each is manageable. Accumulated across ₹50 crore in annual collections and 15,000+ agents operating across India, the drag becomes structural.
Before airpay's intervention, Star Health's payments infrastructure was producing measurable business risk across six dimensions- the problems that always surface in distributed, high-value collection businesses:
| THE SIX PRESSURE POINTS |
|
Channel inconsistency
|
Premium acceptance varied by channel and location. Digital flows, agent collections, and PoS-based hospital payments each ran on different instruments, different settlement timelines, and produced data in different formats |
|
Reconciliation as daily labour
|
Matching what the gateway reported, what the bank confirmed, and what the agent logged across 15,000+ field agents was a manual exercise that ran disputes and eroded trust within their distribution network — a key revenue driver for Star Health. |
|
Failure rates with real consequences
|
An 8% failure rate on a digital purchase is inconvenient. An 8% failure rate in insurance premium collection means policies lapse, policyholders churn, and recovery costs compound |
|
Regulatory compliance gaps
|
How payment data was stored, routed, and reconciled — creating audit risk ahead of tightening IRDAI and RBI norms on digital insurance premium handling |
|
Manual Recurring Premium Collections
|
Mandate infrastructure was previously largely manual and fragmented, with slow mandate setup processes, limited automation for recurring debits, and heavy reliance on manual intervention, resulting in delays, inefficiencies, and increased processing effort. |
|
Absence of a unified payments view
|
MAcross online, PoS, and agent-collected premiums — preventing real-time portfolio visibility for finance and product teams. |
This is the version of payments infrastructure that most large organisations inherit rather than choose. It accumulates through procurement decisions made at different points by different teams solving for different immediate needs. The result is a collection of vendors rather than a system — and the difference between those two things is measured in hours of reconciliation labour every month.
“The problem wasn't payment processing — it was payment infrastructure. Star Health needed a partner who understood the difference between running transactions and building the system that those transactions live inside.”
THE SOLUTION
A Unified Payments Infrastructure Layer
Founded in 2012, airpay can run the entire payments stack for a business without routing through intermediaries, enabling settlement speed, comprehensive compliance coverage, and reporting integration that fragmented setups cannot.
For Star Health, the deployment was built across four layers working in concert. A Payment Gateway handling all digital premium acceptance across 200+ instruments — UPI, cards, net banking, wallets — on direct bank integrations with failover logic that keeps success rates stable regardless of volume. Digitized recurring premium collections using eNACH and UPI Autopay. The airpay vyaapaari Network and a PoS network.
LAYER 1
Payment Gateway — Smart Routing Engine
airpay's PG layer was integrated with intelligent retry logic and dynamic routing across acquiring banks, reducing online premium failure rates from ~8% to under 1.5%. Card, UPI, net banking, and EMI flows unified under a single API surface. Through third-party orchestration, improved mandate success rates, reduced drop-offs, and ensured reliable recurring premium realisation.
LAYER 2
Digitized Recurring Premium Collections
airpay implemented a fully digital mandate infrastructure using eNACH and UPI Autopay, enabling instant mandate registration, automated recurring debits, and significantly reducing manual intervention.
LAYER 3
Merchant-Led Distribution (vyapaar)
A merchant network enabled assisted digital distribution, allowing customers to discover, purchase, and receive policies instantly with integrated payments—expanding reach without adding agents.
LAYER 4
PoS Network — Agent & Branch Collections
airpay deployed and managed PoS terminals across Star Health's branch and hospital network, enabling card-present premium collections. Terminals operated on airpay's settlement network — ensuring T+1 settlement to Star Health's nodal accounts.
“One of the greatest advantages has been reconciling premium collections from across the distribution network in one place. The manual effort is gone. The accuracy is a different category entirely.”
— Finance Operations, Star Health & Allied Insurance
₹ 50Cr+
Premium collections
processed annually
T+1
Settlement across all
channels — gateway, PoS, and agent links
15,000+
Field agents brought onto
a single settlement platform
All processing is RBI Payment Aggregator-compliant across online, offline, and cross-border transactions.
Why airpay— and why it matters beyond Star Health
| Capability |
airpay |
Typical Alternatives |
| RBI Licensing |
Full PA licence — online, offline & cross-border |
Limited or partial coverage |
| Gateway + Agent integration |
Single platform, unified settlement and data |
Separate vendors, manual consolidation |
| Settlement speed |
T+1 across all instruments |
T+2 or T+3 common |
| Multi-channel reporting |
Consolidated, real-time across all streams |
Requires manual aggregation |
| Instrument coverage |
200+ payment methods |
Fewer direct integrations |
| Compliance posture |
PCI DSS · IRDAI digital norms · RBI tokenisation |
Varies by vendor |
| Merchant support |
Dedicated key account manager |
Ticket queues, generalised support |
The Current Reality at Star Health
The outcomes operate at two levels, and the second is the one that matters more for a business of Star Health’s scale.
82%*
Reduction in payment failure rate
Online premium failures dropped from ~8% to under 1.5% through smart routing and retry logic — directly reducing policy lapse risk and the recovery overhead that goes with it.
3×*
Growth in agent-collected digital premiums
The agent payment link rollout drove a 3x increase in digitally-attributed field collections within 12 months — reducing cash handling and accelerating compliance with IRDAI’s digital push.
40%*
Reduction in reconciliation overhead
Automated daily reconciliation across all channels freed the finance team from payment administration. They gained back the hours. The accuracy came with it.
100%*
Audit-ready compliance for three consecutive IRDAI cycles
PCI DSS certification and RBI tokenisation compliance meant Star Health cleared regulatory audits without remediation action — a first across three consecutive cycles.
Managing one vendor relationship, with a single support contact and a single platform view, removed the coordination overhead that accumulates when infrastructure is fragmented across providers. Star Health now runs premium collections across its entire distribution network — digital, PoS, and agent — with the operational consistency of a centralised system and the reach of a distributed one.
“airpay operates like an extension of our internal finance team rather than a payments vendor. When you’re dealing with premium collections at this scale, that distinction is everything.”
— Finance Operations, Star Health & Allied Insurance
Star Health is not a unique situation. Across health insurance, life insurance, and multi-line insurers running large agent networks, the same operational bottleneck appears — and it almost never comes from the product side. It comes from the infrastructure running underneath daily collections. The businesses that move fastest through this bottleneck are the ones that have stopped treating payments as a collection of vendor relationships and started treating it as a single infrastructure layer — one reconciliation workflow, one settlement ledger, one point of accountability. That is the practical case for airpay. Not as a payments provider that does more things, but as a platform that eliminates the friction between the things it does.
airpay - Full-stack financial infrastructure operating across India, UAE, and Tanzania.
To explore how airpay can support your business, visit airpay.co.in