Tag: digital payment

Nubank – Controlling Money and Creating Developments

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We all love being protected. Nowadays we do not feel safe to carry money with us in our pockets while going outside for shopping or maybe having food in the restaurants. Rather we all prefer credit or debit cards. These cards help users feel safe.

Nubank is the largest Fintech in Latin America. It is a privately held company which deals with Financial Services. Nubank has also got an engineering office in Berlin and Mexico City and is headquartered in São Paulo, Brazil. The company provides a credit card to the consumers which can be controlled with the help of a phone 24×7. Read the Nubank success story below.

Nubank – Company Highlights

Company Name	Nubank
Headquarters	Sao Paulo, Brazil
Sector	Finance, Financial Services, Fintech, and Payments
Founders	David Velez, Adam Edward Wible and Cristina Junqueira
Founded	May 2013
Website	nubank.com

Nubank – About
Nubank – Startup Story
Nubank – Founders and Team
Nubank – Business Model
Nubank – Revenue Model
Nubank – Funding and Investors
Nubank – Growth
Nubank – Acquistions
Nubank – Competitors
Nubank – Future Plans
Nubank – FAQ

Nubank – About

Nubank is a platform that processes, issues, transfers and administrates payments related to post-paid credit cards. The company has launched a digital account named ‘NuConta’. It is used by more than 17 million people.

Nubank Logo

Nubank – Startup Story

In 2013, David Vélez went to a Brazilian bank branch to open an account. He had a horrifying experience there. Firstly he had to check his bag in a locker outside and then he waited and passed through a security line. There he waited for 45 minutes and finally got an opportunity to speak to someone. He felt that the man was doing him a favour by talking to him about the creation of an account. Then again David was sent to make a phone call to the bank employees.

The procedure took a long period of four months. He knew that anywhere he would go in Latin America, he would experience the same. There half of the population has got neither credit cards nor bank accounts. So, he decided to build something modern and different aptly titled Nubank.

Nubank – Founders and Team

The founders of the company are David Vélez, Edward Wible and Cristina Junqueira.

David Vélez is the founder and the CEO of Nubank. He was a board member at Despegar.com. He was also a partner at Sequoia Capital. He was the senior associate at General Atlantic. He began his career as an analyst at Goldman Sachs. He pursued his education from Stanford University.
Edward Wible is the founder and the CTO of Nubank. He is a graduate in Computer Science from Princeton University.
Cristina Junqueira is the co-founder of Nubank. She began her career from Boston Consulting Group. She has got a bachelor’s and a master’s degree in engineering from the University of Sao Paulo.

**Cristina Junqueira, Edward Wible and David Velez (left to right), Founders, Nubank**

Nubank – Business Model

The company offers the customers a low interest and a no-fee credit card which can be managed with the help of Android and iOS. Users can track and control their purchases with the help of this platform.

Nubank – Revenue Model

Nubank makes money with the help of the credit card the company provided to its users. Whenever a purchase takes place through the credit card, the organization pays a small percentage of money through the Mastercard network. In case a customer decides to pay the bills in instalments, the company receives interest.

Nubank – Funding and Investors

Nubank has raised a total amount of $1.5 billion in funding over the 11 funding rounds.

In Jan 2021, Nubank announced a funding round of $400m which came at a $25bn valuation on the company

Date	Transaction Name	Money Raised	Lead Investors
Jan 28, 2021	Series G	$400M	GIC, Invesco, Whale Rock Capital Management
June 4, 2020	Venture Round	$300 million	–
July 26, 2019	Series F	$400 million	TCV
October 8, 2018	Secondary Market	$180 million	Tencent Holdings
March 1, 2018	Series E	$150 million	DST Global
August 17, 2017	Debt Financing	–	Fortress Investment Group and Goldman Sachs
December 6, 2016	Series D	$80 million	DST Global
April 27, 2016	Debt Financing	$56 million	Goldman Sachs
January 7, 2016	Series C	$52 million	Founders Fund
June 2, 2015	Series B	$30 million	Tiger Global Management
September 25, 2014	Series A	$14.3 million	Sequoia Capital

No. of investors – 15

Nubank – Growth

Nubank has already experienced growth in the first half of 2020 because during the pandemic many consumers turned to online mode. The company saw a 48% of increased revenue growth from December 2019 onwards. During that time, the number of transactions got doubled on the platform. The customer base now stands at 35 million customers in brazil in 2021, which is more than double compared to 2019. According to the reports, Nubank receives an average of 41,000 new users a day. On plans of International Expansion the company stated that it will soon start its operation in Columbia. .

Nubank brasil — **Number of customers of Nubank in Brazil from 2016 to 2020**

Nubank – Acquistions

In January 2020, Nubank made its first acquisition by acquiring Plataformatec, a company that specialized in software engineering and agile methodologies.

In September 2020, Nubank acquired Easyinvest, an investment broker also from Brazil for an undisclosed amount.

Nubank – Competitors

The top competitors of the company are Atom Bank, Monzo Bank, N26 and Monese.

Atom Bank is a privately held digital financial company founded in 2014. It works in the financial services sector.
Monzo Bank is a privately held digital company founded in 2015. It operates in the financial services technology field.
N26 is a privately held company founded in 2013. It competes in the financial services sector.
Monese is also a privately held company founded in 2013. It works in the financial services field.

Nubank – Future Plans

In 2019, Nubank started its international expansion. It began its operation with Mexico. Then, it had 8.5 million customers and it claimed itself to be the biggest online bank outside Asia. The Mexico office started with 20 staff members and had plans to quadruple within 2020.

The company has been studying the Mexican financial system for various years, and estimated that around 36 million Mexicans do not have a bank account. Therefore, Nubank came with the decision to extend its empire but there are no plans to widen into other markets such as Europe.

Nubank – FAQ

What is the revenue of Nubank in 2020?

The revenue generated by fintech company Nubank in Brazil during the first six months of 2020 amounted to 2,079.22 million Brazilian reals.

How does Nubank make money?

Whenever a purchase takes place through the credit card, the organization pays a small percentage of money through the Mastercard network.

Is Nubank a bank?

Nubank is one of the largest digital bank in the world, with a customer base of more than 35 million.

How many customers does Nubank have?

Nubank has a customer base of over 35 million.

Where is Nubank located?

Nubank is a Latin American neobank headquartered in São Paulo, Brazil.

What is the valuation of Nubank?

The Valuation of Nubank is $25 billion as of 2020.

April 2, 2021

Reasons Why the Indian government wants to Ban Cryptocurrency

Indian Government is planning to introduce a new bill that will ban all the private cryptocurrencies in the country. The government has plans to ban cryptocurrencies such as bitcoin and Ethereum and to introduce a national cryptocurrency. The new bill is planned to be introduced in the lower house of the parliament.

History of Cryptocurrencies in India
Reasons for ban of Cryptocurrency in India
Cryptocurrency and Regulation of Official Digital Currency Bill
e-Kuber
FAQ

History of Cryptocurrencies in India

This bill is not considered to be the first time the Indian Government has been against the purchase of digital assets in the country. In the year 2018, the Indian government panel had proposed to ban all the cryptocurrencies in the country and had suggested that the offenders would be put in jail for a period of 10 years.

In the same year, the finance minister Arun Jaitley had said that The Government of India doesn’t consider the cryptocurrencies legal. He said that it is not considered as a digital asset or a payment method and that the Government would take all legal actions to stop the use of these digital coins for payment activities. The government had stated that it was not approved by them and it was illegal.

The monetary regulator of the country had later banned the use of cryptocurrencies in the year 2018. The ban was after the reporting of a number of fraudulent activities related to cryptocurrencies. However, the ban was later removed by the Supreme Court of India in March 2020.

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Reasons for ban of Cryptocurrency in India

There has been a lot of anxiety and fear across the country regarding the ban of cryptocurrencies. It is said that there are around 75 Lakh Cryptocurrency owners in the country. Their holdings have a worth of up to $1 billion.

One of the other major reasons for the ban of cryptocurrencies in the country is because of the Aadhar card. It is said that the ban of cryptocurrencies would have been already put in action several years ago by the Government without any intention.

The unintentional ban is supposed to be when the government introduced the Jan Dhan-Aadhar-Mobile trinity during the rule of the Modi Government in India. Aadhar was a huge project undertaken by the country which required the citizens of India to register into the financial system of the country by using a unique identification number. The Government wanted to use that network to directly send subsidies.

Brent Johnson who is the Chief executive of the San Francisco Santiago Capital which is U.S based company has said that Aadhar could be the reason for the Government to introduce the new bill in the country. Because the Aadhar card was a project to ensure that all the citizens had an account with the government, their ID’s and payments.

As of March 2020, the unique identification authority has issued over 122 crore Aadhar cards in the country which covers up to 90% of the Indian population. Out of 110 crore bank accounts in the country around 96 crore accounts have been linked to Aadhar cards according to UIDAI.

Brent Johnson also added that, if the mobile network connection is taken into consideration regarding the Aadhar card it would seem like it is safe for the Government of India to create a network to issue of its own cryptocurrency in the country which would be accessible to everyone.

Bitcoin price in U.S Dollars

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Cryptocurrency and Regulation of Official Digital Currency Bill

The bill that will be introduced is called as “Cryptocurrency and Regulation of Official Digital Currency Bill”. The main intention of the bill would be to create an easy way to provide support to the new digital currency introduced by the Reserve Bank of India.

The bill also concentrates on banning all the private cryptocurrencies in India. The ban will also improve the chances to increase the demand of the National Currency issued by the Government of India.

It is considered that there will be certain exceptions because the Government of India would require the underlying technology of the bill which is the blockchain technology.

Brent Johnson said that the government would most probably want to use the advantage of Aadhar cards to issue its own cryptocurrency and would want to avoid competitions.

e-Kuber

The recent move of the Reserve bank of India which allowed the retail investors of the country to register with e-kuber. It helps the retail investors to open an account with the portal which helps in purchasing government bonds in primary and secondary markets.

This new portal has raised a curiosity amongst the people in the country. The market participants feel that this would be the portal for issuing the National Digital currency in the country.

FAQ

In Which countries Bitcoin is illegal?

Inspite of its rising popularity, cryptocurrencies are illegal in these countries. Saudi Arabia, Algeria, Bolivia Algeria, Ecuador, Bangladesh, Nepal, Macedonia.

Who is the richest Bitcoin owner?

Satoshi Nakamoto, the founder of Bitcoin, rumored to own around 1 million Bitcoins.

How safe is Cryptocurrency?

Cryptocurrency is considered as one of the riskiest digital currency.

Conclusion

The Deputy Governor of RBI, BP Kanungo has told that an internal part of the Reserve Bank of India is working on the model for the cryptocurrency and that RBI would soon give more information regarding it. If they don’t ban cryptocurrency, many investors might get a new revenue stream and most of the youth will invest in it. However, the government has experts who knows better than us. Hence, we must respect whatever decision they take.

March 18, 2021
Libra: Facebook’s Digital Payment Service

Digital payment is a way of performing payments without the use of digital currency. It is also known as electronic payment. In digital payments, both payer and payee rely on digital modes to send and receive money.

In today’s digital era, our dependency on smartphones exceeds the wildest possibilities. Millennials eat, live, and breathe smartphones. In fact, the use of wallets has declined ever since mobile phones started supporting e-wallets. Carrying change and holding debit cards has become a fad of the past. Digital payments have been ingrained in the way people perform transactions today.

The Digital Payment Services
What is Facebook’s Libra?
Issues With Libra

The Digital Payment Services

Digital Payment Users Over The Years

The digital payments service sector is growing big, and top tech firms are coming up with innovative payment services of their own. Amazon with amazon pay, Ola money, Apple’s Apple pay and Google with Google Pay are amongst the latest offerings. The emergence of mobile wallets wasn’t an overnight phenomenon. Peter Thiel and Elon Musk’s PayPal was an early initiative. It paved way for several others.

India is not far away in terms of cashless economy; homegrown apps like Paytm and PhonePe are now facilitating payments for millions of Indians. Paytm launched the first active digital payment services in India. It was launched in August 2010 by Vijay Shekhar Sharma and was no less than a disruption. Around 130 million people use Paytm services in India. Facebook recently announced Facebook Pay which will be available on Instagram, WhatsApp, and Facebook.

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Cryptocurrency, a digital asset, is being touted as the next step in digital payment services. Facebook has taken a step in this direction. Libra is Facebook’s cryptocurrency. Mark Zuckerberg claims Libra to be the future of banking and transactions, “Libra is a permissioned blockchain digital currency proposed by the American social media company Facebook.” Libra’s initial release is planned in 2020.

With Facebook’s Libra, Mark Zuckerberg wants to disrupt the way how money works. But such initiatives are riddled with issues. Several lawsuits followed post Libra’s announcement. To regulate the working of Libra, it shall be monitored by an independent association called Libra Association; this association would by governed by organizations like Uber, Lyft, PayPal, VISA, MasterCard, etc. Facebook will be maintaining a cryptocurrency wallet called CaLibra. Though Facebook claims Calibra will be maintained with high-grade security and have no effect on one’s privacy, many people don’t believe it.

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What is Facebook’s Libra?

Members Of Facebook’s Libra Digital Payment

“Libra is a global cryptocurrency built on blockchain to promote financial inclusion. Libra is digital, mobile, stable, fast, cheap and secure”. An organization independent of Facebook would oversee Libra. CaLibra, the mobile wallet to hold Libra, would be integrated in all the apps owned by Facebook such as WhatsApp, Instagram, and others. Transactions done with Libra would be the same as PayPal or any other medium available today.

The money from your bank account can be transferred into CaLibra that you can use at shopping malls and online stores. You can also get back your money i.e. Libra can be converted to physical money from Libra authorized people. The exchange of Libra currency and the mechanism behind the transactions’ executions still beg reasoning.

The whole Libra blockchain will be organized and maintained by a 28-member strong Libra association comprising Uber, Lyft, VISA, Mastercard, eBay Vodafone, etc. It is proposed to be a non-profit organization with its main office at Geneva, Switzerland.

Each member needs to give $1 million to get one vote in the organization. The organization will elect a representative to oversee the Libra council. Whenever you add money to your Libra account, it goes into the giant Libra reserve which in turn gives you Libra tokens. The value of Libra stays the same irrespective of the volatility in a country’s economy.

Facebook’s cryptocurrency shall cut down transaction fees and establish a global currency. Financial irregularities and hassles in transactions would become a talk of the past.

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Issues With Libra

Like the concerns and question marks accompanying any major announcement, troubles arose for Mark Zuckerberg’s Libra initiative. In the first week of October, PayPal become the first to step out of the Libra association. The reasons for its withdrawal are not known yet. eBay, Stripe and Mastercard followed PayPal by leaving Libra Association.

Soon, Mark Zuckerberg was summoned by the US Congress. He asserted the launch of Libra would not be done without the approval from US regulators. Zuckerberg further emphasized on the need to take risk via innovation for ensuring US retains its position as the global leader. France and Germany blocked Libra and amended certain laws. Many banks and law makers are also changing rules related to monetary transactions.

After these issues, Facebook began losing momentum on Libra’s launch. With the criticisms and questions Libra faced, it’s clear that the world still holds scepticism on the idea of online payments and digital currency transactions through payment apps.

While certain parties continue to loath cryptocurrency, the technology of future is undergoing rapid improvisation. More complex algorithms ensuring hack- proof network and privacy-oriented transactions will catalyse the acceptance of cryptocurrency. The future of digital payment services, though shrouded with negativity and hesitance at present, will stay for decades to come.

August 18, 2020
The Rise Of Digital Contactless Payments Post The COVID-19 Pandemic

The fast spread of the novel coronavirus has led to a global lockdown hitherto unfathomed. The on-going situation has now become one of the biggest threats to economies and financial markets all over the world, and is leading us towards a global recession. The spread of the coronavirus has impacted the purchasing power of people. We are apprehensive of exchanging traditional currency i.e. notes and coins, to minimize contact. In such a situation, digital contactless payments are gathering a new found attention in these times. Also, countries across the globe are taking numerous measures to maximize digital contactless flow of currency. The culture of digital contactless payments is only going to expand as time passes. This article covers the rise of digital contactless payments post the COVID-19 pandemic.

Status of Digital Contactless Payment

The COVID-19 pandemic stopped almost all possible transactions in the beginning. But over the last couple of months, digital payments have picked pace. People are now resorting to digital payments for purchasing all kinds of utilities. Many merchants have witnessed a significant rise in digital contactless payments across different modes. Statistics point towards a rise of around 30% in the role of digital transactions in revenue generation. Several reports attest to this. According to a report from Statista which talks about the impact of the coronavirus (COVID-19) and its consequent lockdown on Indians, a majority of respondents reported no or very less change in their use of digital payments. However, 33 percent said they used digital payments more than before, while nine percent made online payments exclusively.

Different modes of Digital Contactless Payment

The different digital payment modes that one can opt for in the current circumstance include:

1. QR Code

QR code or Quick Response Code-based payment is a modern payment system that has become pretty popular during the period of COVID-19 pandemic. People can simply scan a QR code with the help of their smartphone to pay for items like fuel, grocery, utility bills, fuel, food, travel and several other services. QR codes facilitate instant payments and that too using fool-proof security payment technology. Whenever a customer requests to pay via the QR code, he or she needs to just scan the QR code of the respective merchant. This scanning helps in automatic entry of the merchant’s details and leaves you with only having to type the purchase amount. After this, you are ready for the payment. Just click on the secure payment tab and watch the transaction happen in a jiffy.

2. UPI

Unified Payments Interface (UPI), developed by National Payments Corporation of India (NPCI), is an instant payment system which relies on your bank account. Whenever a customer requests the UPI payment mode for transacting, the merchant provides his or her unique UPI ID. After this, the customer needs to enter the UPI details of the merchant. The customer can also verify the details displayed on the payment portal. The customer is then ready for making the payment. Just click on the secure payment tab and it’s done! This is also linked with the QR code of the merchant.

Also Read: Everything You Need to Know About Unified Payments Interface

3. Payment Gateway

Payment gateway is a merchant service provided by different e-commerce platforms and ensures that sensitive information (such as credit card details) passes securely through various channels when entered into a virtual terminal or an e-commerce website . At present, e-commerce establishments are strongly focusing on payment gateways as they refrain from entertaining cash-on-delivery payment orders.

Also Read: Best Payment Gateways in India for Your Business

4. NFC Payment

The Near Field Communication (NFC) feature is a new technology in the e-payment sector that allows you to make contactless payments to retailers. Customers can choose to pay via their contactless credit/debit cards or through a Tap & Pay feature provided by banks via a mobile application; you simply tap on your smartphones.

5. Prepaid cards

Closed-loop prepaid cards are the ones that can only be redeemed at the merchant who issued them. On the other hand, “semi-closed loop cards” or “restricted open-loop cards” are similar to shopping centre cards which can be redeemed at various merchants but only within the shopping centre. These cards can be swiped/inserted at the PoS terminal for top-up/withdrawal purposes. You need to enter your pin for completing the payment. This is done for security measures.

May 17, 2020
UPI transactions Fall by 20% due to Lockdown, Lowest in 12 Months

Due to the lockdown imposed to contain the spread of COVID-19, UPI has recorded transactions of less than one billion for the month of April after 12 months of constant growth. This is the first time in the past seven months that UPI volume went below the one billion mark. According to the National Payments Corporation of India (NPCI), UPI has registered 0.99 billion transactions amounting to Rs 1,51,140 crore(Rs 1.51 trillion).

Unified Payments Interface (UPI) is an instant payment system developed by the National Payments Corporation of India (NPCI), an RBI regulated entity. UPI can be used through various apps like Google Pay and PhonePe to make direct payments from one bank account to another.

The lockdown imposed by government due to COVID-19 has caused everything to shut down or just semi-operational. The coronavirus outbreak has devasted many sectors of human life, let it be financial sector, industrial sector, etc. resulting into economic crisis. Yet, India’s success with unified payments interface (UPI) has continued to bring essential services to consumers amid the lockdown as well.

Though the government was able to transfer the relief money through UPI in the bank accounts of crores of Indians, UPI witnessed 20.8% drop in volume and a 26.7% fall in value as compared to the previous month. As corona effect, UPI had registered a little drop in payments volume in March resulting from 1.25 billion transactions worth Rs 2,06,462 crore or Rs 2.06 trillion.

Moreover, along with UPI, NPCI’s real-time payments service IMPS has also registered a sharp fall in volume as well as the value of transactions. In April, IMPS processed 122.47 million payments worth Rs 1,21,140.79 crore which is almost half of the previous month. In the previous month i.e. March, the figure was 216.82 million transactions worth Rs 2,01,961.70 crore.

The decline is shocking as in February 2020, the RBI governor, Shaktikanta Das, had highlighted that digital payments accounted for almost 97% of the daily payment system transactions in terms of volume. He also mentioned that digital payments had accelerated by 50% in terms of volume in the last five years.

However, UPI body NPCI’s CEO Dilip Asbe said,
“ For the last five years, the number of transactions of UPI has been growing continuously month-on-month. But now there has been a slight drop in the volume due to the lockdown. The drop in volumes is due to near-zero restricted spends such as on e-commerce, travel, and similar online platforms. We expect volumes to pick up soon.”

Reasons behind the Drop in Transactions

It was anticipated that a nationwide lockdown to curb the spread of the Covid-19 pandemic would affect the digital payment volumes. However, financial experts were assured that digital payments will not get affected adversely but rather continue to grow as people would rely on digital transactions to avoid physical contact.

During the initial days of the lockdown, e-commerce, foodtech, grocery as well as other online platforms were unable to operate. This led to gradual fall in transactions but later the government had allowed essential services to continue. Moreover, payments to PM-CARES via UPI have been the driving force behind UPI’s growth which is still 20.8% drop and these numbers are only in a few million.

Yet, transactions did not comeback to the normal as government only allowed transactions on essentials. Hence, a majority of e-commerce services are still waiting for government orders. Soon, the government is likely to relax the norms for e-commerce platforms and allow them to deliver non-essential goods as well.

According to payment gateway Razorpay’s digital transaction report, for the month of April the transactions in the logistics have dropped by 96%, the travel sector has declined by 87%, food, and beverage by 68% and groceries by 54%. In the last 30 days, transactions in cities like Ahmedabad, Mumbai and Chennai took a hit of 43%, 32% and 25% respectively. The report recorded transactions between, when the lockdown was announced.

Razorpay’s report also stated that UPI emerged as the most popular digital payment method from March 24 to April 23, with 43% of the total transactions during the period. It was followed by card payments with 39% and net banking with 10%. However, compared to previous month, transactions through UPI declined by 37%, cards by 30% and net banking by 28%.

Government has asked people to prefer Contactless Payment

Travel Restrictions affected the Digital Payments

The fall in UPI and digital payments is not only because of global and national lockdowns and restrictions on non-essential segments but due to restrictions on tour, travel as well. During the lockdown, people are not allowed to travel by train or aeroplane. This resulted into massive fall in transactions as people cannot book tickets of train or plane.

The report revealed that the metro cities were affected the most and the impact was still limited in other cities and towns. This difference in impact is more significant in metro cities because the number of people travelling by air, especially for work, is also higher in the metros. The report added that leading firms are also processing fewer online and offline digital transactions with air travel, hospitality, and retail being the three most-impacted sectors.

Read More: Coronavirus Impact on Digital Payments Startups

Steps taken to deal with the Drop

As of now, NPCI seems prepared to handle the lockdown. CEO Dilip Asbe said that NPCI can multiple sessions and has a spare capacity to handle the demand. In order to ensure that everything keeps running smoothly, around 5% of the NPCI’s workforce is still going to office.

NPCI has already devised a plan for the situation with due consideration of all the factors. Asbe said that NPCI has received complaints from some businesses about delays in cheque clearing. He added that there could be issues on the last mile. While we are in touch with banks, there might be some issues with uploading because of the lockdown.

These issues are might be hard to resolve now as most of the workforce isn’t available now. However, Asbe said that the main objective here is to keep employees safe. If they are safe, the operations can be managed. There are things we cannot disclose, but there is enough backup in case something goes wrong.

Government is also using UPI technology for facilitating the transfer of money in the bank accounts of beneficiaries within a day under Pradhan Mantri Garib Kalyan Yojana (PMGKY). He noted that besides this transfer of relief funds, the government has been using UPI for transferring monetary perks in various schemes such as Ujwala and MNREGA.

After the success of the implementation of UPI in these schemes, many state governments are now relying on UPI technology to transfer funds under various schemes. Madhya Pradesh government which recently transferred some relief money in the accounts of lakhs of construction workers. PM Narendra Modi has urged people to go for digital payment to ensure safety from the infection.

Also Read: Best Payment Gateways in India for Your Business

Meanwhile, several big names in the Indian startup ecosystem have come forward to appeal. Amitabh Kant, CEO of Niti Aayog and Rajan Anandan, managing director of Sequoia Capital India, have been encouraging people to make online payments. Both Kant and Anandan through social media have emphasised that digital payments are the safest way to make payments to ensure minimum exposure to coronavirus.

May 2, 2020
Everything You Need To Know About NPCI
The National Payments Corporation of India (NPCI) is an umbrella organization for operating retail payments and settlements systems in India. It is an initiative by the Reserve Bank of India (RBI) and the Indian Bank Association (IBA) under the provisions of the Payment and Settlement Act, 2007, for creating a robust infrastructure in India for any kind of retail payments and settlements. Created with an intention to provide a fair infrastructure to the entire Indian Banking system, it is Not-for-Profit in nature and has made it possible to create payments both physically as well as electronically.

National Payments Corporation of India

Management Team

Under the non-Executive Chairmanship of Mr. Biswamohan Mahapatra, a veteran who has served 33 years at RBI, the organization is owned by a consortium of major banks. The Board of Directors consists of nominees from the Reserve Bank of India and from nine core promoter banks.

There are nine main promoter banks in India which are:
- State Bank of India
- Canara Bank
- Punjab National Bank
- Bank of India
- Union Bank of India
- Bank of Baroda
- ICICI Bank
- HDFC Bank
- HSBC
Also read: Razorpay – Facilitating the SME’s with effortless online payment mechanisms!

The corporation portfolio currently includes various services such as:

Unified Payments Interface (UPI)

Unified Payments Interface

Unified Payments Interface (UPI) is a system that powers multiple bank accounts into a single mobile application (of any participating bank), merging several banking features, seamless fund routing, and merchant payments under a single hood. It also caters to the “Peer to Peer” collect request which can be scheduled and paid as per requirement and convenience.

With the above context in mind, NPCI conducted a pilot launch with 21 member banks on 11th April 2016 by Dr. Raghuram G Rajan (ex-Governor of RBI) at Mumbai. Banks have now uploaded their UPI enabled Apps on Google Play store.

The Participants of the service include the payer, payee, remitter bank, beneficiary bank, NPCI, bank account holders, and merchants. Some examples of UPI apps that you may already be using are PayTm, BHIM, PhonePe, Axis Pay, and many more.

RuPay

RuPay

RuPay, which literally translates to Rupee and Payment merged together, is a domestic card scheme launched by NPCI in 2012 to fulfill the Reserve Bank Of India’s desire to have a domestic, open loop, and multilateral system of payments in India . In India, 90% of credit card transactions and almost all debit card transactions are domestic; however, the cost of transactions remained high due to the monopoly of foreign gateways like Visa and Mastercard.

RuPay facilitates electronic payment at all Indian banks and financial institutions. NPCI maintains ties with Discover Financial to enable the card scheme to gain international acceptance.

Lower costs and affordability, customized product offering for Indian customers, interoperability between payment channels and products, and protection of information related to Indian consumers are just some of the advantages of RuPay as claimed by NPCI.
- RuPay Contactless
It is a contact-less technology feature that allows cardholders to wave their card in front of contact-less payment terminals without the need to physically swipe or insert the card into a point-of-sale device. This is an EMV-compatible, “contactless” payment feature similar to Mastercard Contactless, Visa Contactless and the ExpressPay, using RFID technology. All three use the same symbol. Contactless can currently be used on transactions up to ₹2000.

RuPay Contactless

NPCI developed RuPay Contactless’s specifications are open standards, interoperable, scalable, and can be adopted by all card schemes. RuPay Contactless (Transit as well as Retail) offers the unique proposition of one card for all payments. This card can be used for transit payments (bus, metro,cab etc.), toll, parking, small value offline retail payments, as well as normal day to day retail payments.

One Card Many Benefits

Bharat Interface for Money (BHIM)

Bharat Interface for Money

Bharat Interface for Money (BHIM) is a mobile application that lets you make quick payment transactions using Unified Payment Interface (UPI). You can make instant bank-to-bank payments and Pay and collect money using your mobile number or Virtual Payment Address (UPI ID). More than 125 lakhs citizens have been using the BHIM app since 2017.

Unlike mobile wallets (PayTM, MobiKwik, mPesa, Airtel Money, etc) which hold money, the BHIM app is only a mechanism which transfers money between different bank accounts. Transactions on BHIM are instantaneous and can be done 24/7 including weekends and bank holidays.

Users can create their own QR code for a fixed amount of money, which is helpful in merchant-seller-buyer transactions. Users can also have more than one payment address. If the 12-digit Aadhaar number is listed as a payment ID, the BHIM app will not require any biometric authentication or prior registration with the bank or Unified Payment Interface (UPI).

At present, there is no charge for transactions from ₹1 to ₹1 lakh. The minimum transaction amount should not be less than ₹1. A maximum of 20 transactions are allowed in a day. Some bank might however levy a nominal charge as UPI or IMPS transfer fee. Currently the fund transfer limit has been set to a maximum of ₹20,000 per transaction, and a maximum of ₹40,000 per day.

The BHIM app currently supports 13 languages (including English), though there are 22 official languages of India (excluding English) under 8th Schedule of Constitution of India. In near future, BHIM App is expected to support all 22 official languages of India along with other regional languages which are spoken widely next to the scheduled languages.

Relevant read: Instamojo – Aiding the Indian MSME’s with effortless payment gateways!

Immediate Payment Service (IMPS)

Immediate Payment Service

Immediate Payment Service (IMPS) is an instant payment inter-bank electronic funds transfer system in India. IMPS offers an inter-bank electronic fund transfer service through mobile phones. Unlike NEFT and RTGS, the service is available 24/7 throughout the year including bank holidays.

In 2010, the NPCI initially carried out a pilot for the mobile payment system with 4 member banks (State Bank of India, Bank of India, Union Bank of India and ICICI Bank), and expanded it to include Yes Bank, Axis Bank, and HDFC Bank later that year. IMPS was publicly launched on November 22, 2010. Currently, 53 commercial banks, 101 Rural/District/Urban and cooperative banks, and 24 PPIi have signed up for the IMPS service.

The participants of IMPS include the remitter (sender), beneficiary (receiver), banks, and National Financial Switch – NPCI.

You can avail the fund transfer service:
- Using Mobile number & MMID (P2P).
- Using Account number & IFS Code (P2A).
- Using Aadhaar number (IMPS).
National Electronic Toll Collection (NETC)

National Electronic Toll Collection

The National Payments Corporation of India (NPCI) has developed the National Electronic Toll Collection (NETC) program to meet the electronic tolling requirements of the Indian market. It offers an interoperable nationwide toll payment solution including clearing house services for settlement and dispute management.

Interoperability, as it applies to National Electronic Toll Collection (NETC) system, encompasses a common set of processes, business rules, and technical specifications which enable a customer to use FASTag as a payment mode on any of the toll plazas irrespective of who has acquired the toll plaza.

FASTag is a device that employs Radio Frequency Identification (RFID) technology for making toll payments directly while the vehicle is in motion. FASTag (RFID Tag) is affixed on the windscreen of the vehicle and enables a customer to make toll payments directly from the account which is linked to FASTag.

FASTag offers the convenience of cashless payment along with benefits like savings on fuel and time as the customer does not have to stop at the toll plaza. The program is currently live on 415+ toll plazas across the country. As per NHAI, FASTag has unlimited validity. 7.5% cashback offers were also provided to promote the use of FASTag. Dedicated Lanes at some toll plazas have been built for FASTag.

*99#

*99#

*99# service has been launched to take the banking services to every common man across the country. Banking customers can avail this service by dialing *99#, a “Common number across all Telecom Service Providers (TSPs)” on their mobile phones and transact through an interactive menu displayed on the mobile screen. Key services offered under *99# service include sending and receiving inter-bank account to account funds, balance enquiry, and setting/changing UPI PIN besides other services.

*99# service is currently offered by 41 leading banks and all GSM service providers. It can be accessed in 13 different languages including Hindi and English. *99# is a unique interoperable direct to consumer service that brings together diverse ecosystem partners such as Banks and TSPs (Telecom Service Providers).

It is a common technology platform developed by NPCI which allows banks and TSPs to seamlessly integrate with each other and provide banking services to customers at large over mobile phones (basic as well as smartphone).

Features of *99# service include:
- Use of USSD as the access channel that works across all GSM handsets (smartphone or otherwise), making it reach the last mile user.
- Supports menu-based applications that are easy to maneuver for the users.
- Does not require data connectivity (works on signaling channel) and this makes it a high availability service.
- Round the clock availability (works even on holidays).
- Accessible through a common code (*99#) across all GSM operators and mobile handsets.
- Additional channel for using BHIM app and a key catalyst for financial inclusion.
Must read: Everything You Need to Know About Unified Payments Interface

Bharat Bill Pay

Bharat Bill Pay

The Bharat bill payment system is a Reserve Bank of India (RBI) conceptualised system driven by the National Payments Corporation of India (NPCI). It is a one-stop ecosystem for payment of all kinds of bills, thus providing an interoperable and accessible “Anytime Anywhere” bill payment service to Indian customers with certainty, reliability and safety of transactions.

Bharat Bill Pay has multiple modes of payment and provides instant confirmation of payment via an SMS or receipt. It offers myriad bill collection categories like electricity, telecom, DTH, gas, water bills etc. through a single window. In future, biller categories may be expanded to include insurance premium, mutual funds, school fees, institution fees, credit cards, local taxes, invoice payments, etc. An effective mechanism for handling consumer complaints has also been put in place to support consumers regarding any bill related problems in Bharat Bill Pay.

BHIM Aadhaar

BHIM Aadhaar

BHIM Aadhaar pay is an Aadhaar based payments interface which allows real time payments to merchants using the customer’s Aadhaar number and authenticating him or her through biometrics. BHIM Aadhaar Pay Merchant Incentive Scheme was effective from 1st April, 2017. The end date of BHIM Aadhaar Pay Merchant Incentive Scheme was 31st March, 2019.

Merchants can initiate transactions where customers pay money using their Aadhaar number and authenticate the transaction using their biometrics for the goods and services purchased. To be able to effect the same, the merchant should have an Android mobile with the BHIM Aadhaar app installed and a certified biometric scanner attached with the mobile phone/kiosk/tablet through a USB Port or with Micro-ATM/POS, mPOS. The customer and merchant should have their Aadhaar number linked to their bank accounts.

Merchant can view the transaction for its status, whether it was a successful transaction, pending transaction, or a failed transaction. Customers can pay using their Aadhaar number and biometrics at merchant locations where BHIM Aadhaar Pay is accepted.

The merchant enters the customer details and amount in his or her BHIM Aadhaar Pay App and the customer provides his biometrics on the Merchant App after selecting the bank.

Limit on Value of Transaction: The per transaction limit is Rs. 10,000 (as the maximum incentive is capped at Rs. 50 at 0.5% of the transaction value) The maximum incentive which can be earned by the merchant in a month is Rs.2000. The BHIM Aadhaar Pay enabled merchant will receive the incentive between one to seven days after the date of transactions (the merchant should check with their banks for further details).
April 29, 2020
Coronavirus Impact on Digital Payments Startups

Coronavirus is here, and it’s making a big impact on every aspect of business. From trade market swings to airline collapses, the economy of many industries is taking its toll and having major constraints. Whole worldwide especially in Europe, those living in Italy, Spain, Germany and France have been the most impacted so far and the situation is set to worsen. The indirect effects for startups have also been huge, but some businesses are faring better than others. While many struggle to operate amid travel turmoil, others are cashing in on the health crisis by supplying much-needed medical solutions. Some London founders even launched an entirely new startup (called Epiderm) this year to help track employee and visitor contact through check-ins and calendar analysis. Similarly, there are clearly dozens of sectors that will likely be impacted such as dating apps, concert booking apps, edtech, will-writing startups, fitness apps, remote working tools and recruiting startups and so on.Here we discussed about impact of Coronavirus on Fintech Startups.

What about the sector of fintech?

Like everything else, it’s also likely to be under threat. There’s more to come from COVID-19 in the coming weeks where large and small fintech companies take a hit. Some could even benefit. Fintech firms globally also have already benefited from more flexible regulations in both emerging and mature countries as many efforts are being made to improve financial inclusion and serve a broader digital economy. According to a report from Ecosystem, there were five key trends that were expected to shape the Fintech market during 2020. The coronavirus pandemic could be devastating for many companies, but it’s also shining a spotlight on the power of fintechs across the world. They seem to be responding to the sudden challenge effectively, though uncertainties lie ahead.

Negative Impacts of Consumer Spending

Fear, panic, and quarantine measure heavily impact consumer spending. Canceled flights, closed stores, and social distancing have resulted into a drop in transaction volume at all levels of the economy. This means FinTech firms in the payments sector like Paypal, PhonePe, Google Pay, Stripe, or Chime will collect fewer fees, negatively impacting their profitability and valuations. Hardware shortages could also impact firms like Square, that rely on digital devices to support transaction processing. It’s evident that large businesses are already feeling the heat with the coronavirus outbreak. Companies such as Mastercard and Visa have cut their predictions for revenue due to the scare. This is because many users of credit cards are unlikely to use it to purchase flights, which is one of the more common transactions for credit card use.

The impact of the coronavirus outbreak is impacting both financial markets and consumer behavior as never before. At least in the short term, there has been a significant flight to safer investments by consumers, which could negatively impact venture capital funding of existing and new fintech firms. Combined with investors concerned with higher funding costs, the volatile market could be a catalyst for lower valuations. This potential drying up of financing to non-traditional financial services firms could force many firms to find collaboration or investment partners from traditional banking organizations. Some early-stage fintech firms may need to shut down.

Chinese fintechs will likely face the worst negative impact from the virus. Funding for Chinese fintechs was already down in 2019, likely due in part to trade tensions between the US and China. In 2019, fintechs only secured $298 million, down from $1.8 billion during the same time the year before. Having originated in Wuhan, China, the coronavirus is making the country’s economic outlook particularly uncertain, and more investors may shy away from the market as a result. That means Chinese fintechs might need to prepare for an even less funding-friendly environment in 2020 and shift their focus to a sustainable business model.

Positive Impacts

Whilst we’ve seen many negative impacts recorded in the fintech sector, there is a bright side in which some companies benefiting from. It’s encouraged many companies to adopt fintech for the purpose of their business. For example, the Banking and Insurance Regulatory Commissions company Ye Yanfei explained that blockchain is being utilised for medical data verification. Similarly, consumers desire for digital banking services will most likely increase, forcing many traditional financial institutions to fast-track digital innovation efforts. As a result, many legacy banks and credit unions may look to fintech firms or startups for assistance in bringing better digital banking solutions to the marketplace during this crisis. This increase in demand for digital solutions could provide a lifeline to fintech firms at a time when VC funding may not be an option.

In addition, weakening economies may force government organizations and regulators to stimulate the expansion of fintech solutions. For instance, South Korea is planning to temporarily ease regulations on fintech and ten other industries in March, in an attempt to jumpstart its economy amid the coronavirus outbreak. The World Health Organization has also encouraged contactless payments to contain the spread of COVID-19. Moreover, Google Trends shows a significant spike in the search requests regarding online loans which is a good news for many fintech firms.

Governments are appealing for Cashless Payment

Many countries are also encouraging the use of contactless payment to prevent the spreading of the virus any further from the exchanging of money. To ensure safety of citizens amid the coronavirus outbreak, the Reserve Bank of India (RBI) governor, Shaktikanta Das, asked customers to use digital banking facilities as far as possible. Das added, “In the context of COVID 19, RBI and the government together are giving emphasis on encouraging digital payments. And over a period of time, various measures have already been taken to establish safe, secure, stable and affordable retail payment system such as the National Electronic Fund Transfer (NEFT) and the Immediate Payment Service (IMPS).” In South Korea, where regulations were once considered rather strict in the fintech domain, they’re now willing to ease the regulations that they have. This is to lessen the impact of the virus spreading and having a larger impact on the economy.

Reserve Bank of India(RBI) has appealed people to use Contactless Payment

It could boost demand for certain insurance types. The virus’ dominance in headlines may increase awareness of insurance and boost demand for health and life coverage, as well as business interruption and event cancellation coverage. For instance, the outbreak has led to many conferences and events being cancelled at the last minute. At the same time, insurers are not supposed to pay over claims of this outbreak. Most travel insurers, for example, exclude pandemic, epidemic disease or infectious diseases from their coverages, meaning that likely only few will be affected by the virus. A report has revealed India has shown a moderate increase of 7 % when it comes to availing online financial services during this period of social distancing.

21-day Lockdown to promote Digital Payment

India is currently going through a 21-day lockdown that was imposed by Narendra Modi-led central government, as part of its plan to battle the novel coronavirus COVID-19. Several prominent names in the Indian startup ecosystem have also been promoting digital payments. There are various digital payment channels people can use instead of transacting via cash. Digital payments channels include NEFT, IMPS, UPI, etc. Razorpay’s report highlighted that UPI, internet banking and wallet payments have all grown in India because of quarantine and social distancing. Surprisingly, Delhi and Bengaluru have noted a decline in digital payment but this is just a matter of time. Soon, digital payment will see a boom across all cities due to lockdown. So, this is a good opportunity for all fintech firms and startups to flourish.

March 26, 2020