<img src="https://m2p-website-file.s3.ap-south-1.amazonaws.com/m2p-website-file/marketing-cms/m2p-blog/2022/05/Artboard-1-copy.webp" alt="M2P Fintech" title="" width="100%" height="285">No matter which investment vehicle hogs the limelight, nothing can break the charm of the good ol’ Fixed Deposit (FD). It is considered a perfect ‘coming-of-age’ gift for millions of first-time investors in India.<h2 class="heading-node" id="e59d">Factors contributing to the allure</h2>Private Banks, Public Sector Banks (PSBs), and Non-Banking Financial Companies (NBFCs) issue fixed deposit plans for aspiring investors. The guarantee of assured returns, high-interest rates, zero risk exposure, and tax exemptions make FD a preferred savings instrument for people across socioeconomic strata.Banks, fintech firms, and NBFCs offer <a class="link" href="https://m2pfintech.com/blog/secured-credit-cards-101-where-credit-meets-saving/">secured credit cards</a>, overdrafts, free insurance, and health cover to customers based on their fixed deposits. This adds to its greater appeal as a popular investment instrument.<h2 class="heading-node" id="360e">Difference between FDs offered by Banks and NBFCS</h2><img src="https://miro.medium.com/max/1310/1*Q3os2jdv6noFbEBHZfW3gA.jpeg" alt="M2P Fintech" title="" width="100%" height="284"><h2 class="heading-node" id="82aa">Digitization is critical</h2>Physical FD booking demanded strict protocols like the creation of bank accounts, extensive background verification, and laborious paperwork. Customers were not too happy with the complex, time-consuming journey to invest in an FD.Hence, digitization of deposits became the need of the hour to thrive in the evolving market. The convenience of product comparison, hassle-free onboarding, and digital payments/withdrawal attracted more consumers to choose online deposit plans.PSUs, private banks, and NBFCs are actively deploying online FD platforms to reap the benefits listed below.<ul class="list-node" id="cyrn5nnnh"><li>Boost lending potential:&nbsp;Financial institutions can leverage online FDs to increase the aggregate deposit value, which will in turn boost lending opportunities.</li><li>Access to New to Bank (NTB) customer base:&nbsp;Digital FDs offer new-age banks and NBFCs an efficient channel to onboard investors who do not have an existing bank account. NTB consumers can be incentivized with higher interest on deposits as compared to existing banks.</li><li>Target new investor segment:&nbsp;Online FDs help Financial Institutions (FIs) target new consumer bases by leveraging diverse fintech platforms. For example, they can target wealthtech for investment and tech-savvy consumers, and digital banking/payment apps for zoomers and the millennials.</li><li>Enhance customer experience:&nbsp;Digital FD platform offers instant hassle-free <a class="link" href="https://m2pfintech.com/blog/know-your-customer-kyc-the-need-for-authentication/">KYC processing</a>, onboarding, settlement, and digital service request. It ensures personalized and enhanced customer experience and journey.</li></ul><h2 class="heading-node" id="18d7">Challenges in digital FD deployment</h2>Several FIs have already launched online FDs and upcoming players are looking to launch digitized deposit platforms. One commonality between them is the quantum of challenge they face during deployment and implementation. Here is a quick glimpse into the key challenges FIs face in digital FD deployment.<ul class="list-node" id="crdnokb5f"><li>Time to market-&nbsp;Launching FD solutions with end-to-end integrations and data security on 3rd party platforms is a time-consuming process. This delays the time taken for banks and NBFCs to go to market with digital fixed deposit plans.</li><li>Unavailability of integration-friendly standard APIs-&nbsp;Bank and 3rd party integrations are critical for online FDs. To aid seamless operation, implementation and support, ready-to-integrate <a class="link" href="https://m2pfintech.com/blog/the-world-of-apis-how-they-power-fintech/">APIs</a> are imperative.</li><li>File-based batch files-&nbsp;Traditional banks have file-based batch files for handling service request changes. This makes API-based fintech integrations more challenging.</li></ul>So, how can FIs overcome the challenges listed above?Simple. Banks and NBFCs need to partner with digital FD solution providers for ready-to-use, end-to-end APIs that enable incredible go-to-market speed. Within a few weeks, the deposit product will hit the market and the FIs can enjoy the benefits listed below.<ul class="list-node" id="hovgz5sfj"><li>Seamless &amp; uniform API driven integrations</li><li>Scalable platform supporting multiple FIs</li><li>End-to-end functionalities and customer journey</li><li>Customized fixed and recurring deposits issuance</li><li>End-to-end digitized processes for KYC, account creation, account changes, maturity pay-out, account closure, and FD renewal</li><li>Proactive compliance and security infrastructure</li><li>Support for service requests (FD closure, account details changes, FD renewal, bank account changes) from both API-based as well as file-based integrations</li></ul><a class="link" href="https://m2pfintech.com/newsletter/">Subscribe</a> to our newsletter and get the latest fintech news, views, and insights, directly to your inbox.&nbsp;Follow us on&nbsp;<a class="link" href="https://www.linkedin.com/company/m2pfintech/mycompany/">LinkedIn</a>&nbsp;and&nbsp;<a class="link" href="https://twitter.com/m2pfintech">Twitter</a> for more insightful fintech tales curated for curious minds like you.

How can banks and NBFCs leverage the potential of digital FDs?

<img src="https://m2p-website-file.s3.ap-south-1.amazonaws.com/m2p-website-file/marketing-cms/m2p-blog/2022/06/Artboard-1-copy-8-12.webp" alt="M2P Fintech" title="" width="100%" height="253">Three years into the pandemic, amidst the Omicron wave, the Indian Union Budget 2022 promises resiliency, growth momentum, and long-term sustainability measures. At a 9.2% GDP, India projected the highest growth rate among world economies. Great stat to start the budget highlights with right?<h2 class="heading-node" id="b7ef" style="text-align: left">Digital Focus</h2>The key focus areas of the budget were&nbsp;digital and technology for the next 25 years.&nbsp;The Finance Minister’s budget speech promoted digital and technological innovation across industries. It offered a sharp increase in public investment and capital expenditure provision that is expected to aid future growth and help businesses recover from the pandemic-induced slump.Initiatives focused on ‘accelerated growth’ for technology-led development, energy transition, and climate action while balancing the needs of an inclusive welfare society.<h2 class="heading-node" id="857d" style="text-align: left"><a class="link" href="https://m2pfintech.com/blog/fintech-101-discover-the-3ws-of-fintech/">Fintech</a> Impetus</h2>For the financial services industry, this budget promises greater investments, is fintech-friendly and <a class="link" href="https://m2pfintech.com/blog/fintech-a-catalyst-for-financial-inclusion/">pro-financial inclusion.</a>Honoring India’s 75th year of independence, the Finance Minister announced the establishment of 75 Digital Banking Units (DBUs) across 75 districts in India. This move is expected to extend <a class="link" href="https://m2pfintech.com/blog/fintech-a-catalyst-for-financial-inclusion/">financial inclusion</a> and fintech services to remote areas.Initiatives are also underway to make the <a class="link" href="https://m2pfintech.com/blog/ready-to-sneak-peek-into-global-cashless-societies/">cashless payments ecosystem</a> safe and seamless for consumers and businesses by enlarging digital infrastructure, boosting internet access, expanding touchpoints, and enhancing cybersecurity. The Finance Minister also stated that financial support for the digital payment ecosystem announced in the 2021–22 budget would continue in 2022–23.<h2 class="heading-node" id="3689" style="text-align: left">Other Highlights</h2>Budgetary Allocation<ul class="list-node" id="dss3o91dh"><li>6.4% fiscal deficit is projected for India in FY23</li><li>Revised fiscal deficit estimated at 6.9% of GDP</li><li>Rs 1 lakh crore as 50-year interest-free loans allocated to states to help fund PM Gati Shakti-related investments</li><li>Rs 10.68 lakh crore effective capital expenditure is expected in 2022–23, which is about 4.1% of GDP</li><li>35.4% rise in outlay for capital expenditure is estimated — from Rs 4.54 lakh crore earlier to Rs 7.50 lakh crore in 2022–23</li></ul>Venture Capital Investment<ul class="list-node" id="8tce85bkj"><li>Regulatory framework for Venture Capital to be reviewed by an expert committee</li></ul><a class="link" href="https://m2pfintech.com/blog/central-bank-digital-currency-cbdc-101-a-primer/">Digital Currency on Blockchain</a><ul class="list-node" id="zmbivw63m"><li>Reserve Bank of India (RBI) to introduce the digital rupee using blockchain in 2022–23</li></ul>Digital Banking<ul class="list-node" id="gygmtbnsd"><li>Launch of online bill system to reduce delays in payment for all central ministries</li><li>Credit growth increased by Rs 5.4 lakh crore this year, the highest in several years</li></ul>Crypto Tax<ul class="list-node" id="602bt55yq"><li>Cryptocurrencies and NFT will be taxed at 30%</li></ul>So, what do you think of the budget? Let us know in the comments below.<a class="link" href="https://m2pfintech.com/newsletter/">Subscribe</a>&nbsp;to our newsletter and get the latest fintech news, views, and insights, directly to your inbox.Follow us on&nbsp;<a class="link" href="https://www.linkedin.com/company/m2pfintech/mycompany/">LinkedIn</a>&nbsp;and&nbsp;<a class="link" href="https://twitter.com/m2pfintech">Twitter</a>&nbsp;for insightful fintech tales curated for curious minds like you.

Key Highlights: What does Budget 2022 mean for Fintechs?

<img src="https://m2p-website-file.s3.ap-south-1.amazonaws.com/m2p-website-file/marketing-cms/m2p-blog/2022/06/banner-4.webp" alt="M2P Fintech" title="" width="100%" height="253"><h2 class="heading-node" id="2fad" style="text-align: justify">Great news to kickstart the year 2022!</h2>We are delighted to announce that we have raised $56 million in Series C1 funding. The round was led by New York-based global private equity and venture capital firm Insight Partners and MUFG Innovation Partners, a CVC company of Mitsubishi UFJ Financial Group Inc. Existing investors Tiger Global and Better Capital also participated in this round.We have now raised more than $100 million in 2021–22 alone. This round of funding is a shot in the arm that will help us strengthen our technology, widen our offerings, and expand to international markets.Madhusudanan R, our Co-Founder, and CEO adds, “The consequence of COVID-19 has accelerated the shift from in-person to digital consumption. This shift has forced businesses across the globe to move from brick and mortar to digital channels and, in doing so, has created an urgency for businesses to adopt an <a class="link" href="https://m2pfintech.com/blog/api-the-power-that-drives-new-age-banking-ecosystems/">API</a> platform like ours. We see an unprecedented opportunity to meet this need by bringing our leading platform to other fintech markets across Europe, Africa, and Asia while doubling down on key and emerging fintech markets such as the Philippines, Indonesia, and Egypt. We are very glad to get the backing of Insight Partners and looking forward to leveraging their deep understanding of working with fintech entrepreneurs across the globe as we look to expand into new markets. MUFG with assets across Asia will be a key partner in the next phase of our growth.”We thank our bank partners, investors, clients, 500+ fellow fintechs for their constant support and guidance. <a class="link" href="https://m2pfintech.com/">Our agile platform</a> will continue creating and deploying products in the fintech ecosystem while maintaining the core promises of scalability, security, and reliability.A special shoutout to all our followers who have engaged with our content, supported us in cyberspace, and gave us the impetus to learn and grow. Thank you for your patronage.Let’s do great things together!<a class="link" href="https://m2pfintech.com/newsletter/">Subscribe</a>&nbsp;to our newsletter and get the latest fintech news, views, and insights, directly to your inbox.Follow us on&nbsp;<a class="link" href="https://www.linkedin.com/company/m2pfintech/mycompany/">LinkedIn</a>&nbsp;and&nbsp;<a class="link" href="https://twitter.com/m2pfintech">Twitter</a>&nbsp;for insightful fintech tales curated for curious minds like you.

M2P Fintech raised $56 million in Series C1 Funding!

<img src="https://m2p-website-file.s3.ap-south-1.amazonaws.com/m2p-website-file/marketing-cms/m2p-blog/2022/05/Artboard-1-copy-1.webp" alt="M2P Fintech" title="" width="100%" height="1790">Never underestimate what good chai can do to your life!One such stimulating chai conversation ignited the origin of M2P, the brainchild of Madhu, Muthu, and Prabhu.<h2 class="heading-node" id="b82a" style="text-align: justify">Genesis of M2P</h2>The candid chat on the disruptive potential of fintech led our founder trio to envision an inclusive world where every business, bank, and NBFC gets equal access to technology-enabled financial services, irrespective of their size, scale, or locale. Giving entrepreneurial wings to their fintech dream, they founded M2P in 2014.Today M2P specializes in building financial ecosystems that accelerate digital payments, banking, and lending worldwide. With an active presence in the Asia Pacific (APAC), the Middle East, North Africa (MENA), Southeast Asia, and Europe, M2P strives to future-proof fintech transformation while boosting business agility and customer lifetime value.<h2 class="heading-node" id="39f0" style="text-align: justify">Founding Trio</h2><img src="https://m2p-website-file.s3.ap-south-1.amazonaws.com/m2p-website-file/marketing-cms/m2p-blog/2022/06/Artboard-1-copy-8-2.webp" alt="M2P Fintech" title="" width="100%" height="529">Madhu, Muthu, and Prabhu possess over a decade of rich experience leading financial and technology innovations in leading global firms. Madhu, a knowledge powerhouse and a passionate chef steered the prepaid and financial inclusion product division for VISA, Citi, and Thomas Cook. Muthu, an avid sportsman, and technologist managed technology delivery for Paypal, Movida, Fujitsu, and Satyam before cofounding M2P. And Prabhu, a deep space tech enthusiast, drove key technology projects at Cognizant, Verizon Data Services, and iGate.<h2 class="heading-node" id="778b" style="text-align: justify">Uphill Climb - YAP</h2>M2P’s initial journeys were fraught with struggles and fallouts. Even though our domain expertise, innovation potential, and technology proficiency were among the best, gaining opportunities by breaking conventions was a major challenge to growth.Pooling in personal savings and resources, the founding team quietly began their bootstrapped journey. They built YAP, the API platform that allowed businesses to quickly create and deploy fintech products by customizing all relevant workflows through plug-and-play solutions.YAP simplified the ability of banks and PPI licensed entities to support back-end products by facilitating technology integration, settlement and operational support. Within a short timeframe, M2P powered neo banking, cross-border payments, card issuance, program management, new-age lending, and investments for several clients.Our robust, secure, and customizable fintech APIs enabled banks, fintech firms, and businesses to go to market at incredible speed with excellent efficacy. M2P’s tech stack has passed numerous regulatory audits and is backed by industry-leading certifications such as PCI DSS ver 3.2.1, ISO 27001:2013, and ISO 22301:2012. We also completed RBI PPI Information Security Audit Compliance as per the RBI Master Direction DPSS.CO.PD. №1164/02.14.006/2017–18 and implemented the “Data Localization” protocol as per Reserve Bank of India (RBI) guidelines.<h2 class="heading-node" id="f2ad" style="text-align: justify">Quantum Leap</h2>The first breakthrough for M2P happened when we launched our first Visa-powered card program in partnership with DCB Bank. Later, we created several marketing programs with Rupay, MasterCard, Visa, Amex, Mercury, and China Union Pay. We also became Visa’s Fintech Fast Track partner across the APAC region and preferred partner for MasterCard globally.By fostering diverse partnerships with 23+ banks, issuers, acquirers, prepaid issuers, emoney license holders, and industry partners across Travel and Forex, Fleet and FasTag, Digital Lenders, Neo-Banking, NBFCs, Gig-Economy players, and traditional bank programs, M2P processed more than $10 billion transactions in 2021. More than 500 engagements and 100 Fintech programs went live in a matter of few years.And our team strength too grew tremendously from 60 in the formative years to over 300 in 2020, and is expected to reach 700 (by March 2022).<img src="https://m2p-website-file.s3.ap-south-1.amazonaws.com/m2p-website-file/marketing-cms/m2p-blog/2022/06/Artboard-1-copy-11-1.webp" alt="M2P Fintech" title="" id="0gemdejro" width="100%" height="529"><img src="https://m2p-website-file.s3.ap-south-1.amazonaws.com/m2p-website-file/marketing-cms/m2p-blog/2022/06/Artboard-1-copy-10-2.webp" alt="M2P Fintech" title="" id="534weeytw" width="100%" height="529"><img src="https://m2p-website-file.s3.ap-south-1.amazonaws.com/m2p-website-file/marketing-cms/m2p-blog/2022/06/Artboard-1-copy-9-2.webp" alt="M2P Fintech" title="" id="mkg9f1kdm" width="100%" height="529"><h2 class="heading-node" id="4ed5" style="text-align: justify">Cashless Surge</h2>Post-February 2020, the pandemic triggered a surge in cashless payments. As a result, banks, NBFCs, and businesses needed fintech services and APIs to sustain omnichannel commerce, as economies began encouraging digital touchless payments. This was an excellent opportunity for us to realize our dream of delivering financial inclusion among banks, NBFCs, and other businesses.And, there was no turning back from there. Projects started flooding in, and we needed more capacity strength and funding to bolster the surge.<h2 class="heading-node" id="beae" style="text-align: justify">Funding and Acquisitions</h2>In the beginning, the founding team chose not to be distracted with funding activities. Instead, their strategy was to chisel and scale up the API platform first and then seek funding for overseas expansion. As the India business was and has always been self-sufficient, no external capital infusion was required at that point in time.In early 2020, angel investors such as Amrish Rau, Pine Labs CEO, Jitendra Gupta, Jupiter Money founder, Kunal Shah, CRED founder, Vikram Chachra of 8i Ventures, Peifu Hsieh of Karbon and Abhishant Pant, Founder of The FinTech Meetup pitched in to raise Rs 10 Cr for the team. We used this funding to develop newer technology stacks, boost team strength, and grow in newer markets outside India.In July 2020, series A funding happened, and we raised $4.50 million through venture capital firms Beenext, 8i Ventures Fund, DMI Group, and Better Capital. Angel investors such as Alok Mittal, Indifi Technologies founder, Ashneer Grover, BharatPe founder, Amrish Rau, Pine Labs CEO, and Jitendra Gupta, Jupiter founder, also participated in the Series A funding.In the meantime, M2P grew rapidly and became the fintech enablement partner of choice for SBM Bank. Our partnership grew from strength to strength covering all facets of Retail banking. This model is now being emulated by other large private banks in India.We also acquired companies such as Wizi and Origa, and made strategic investments in firms like LivQuik to strengthen our cards, credit, and payments ecosystem and improve go-to-market speed.In less than a year, we raised another $10 million in Series B funding from Flourish Ventures and Omidyar Network India, Beenext, 8i Ventures, and Better Capital. Now, we have raised another $35 million through Series C funding led by Tiger Global.<h2 class="heading-node" id="a1ac" style="text-align: justify">Future of Fintech, here and now</h2>From the chai conversation in 2014 to funding rounds, global expansions, innovations, partnerships, and acquisitions in 2021, M2P has come a long way.But this is not time to rest on our laurels.We believe that the future of fintech is here and now.And, we are geared up with futuristic fintech products that are data-driven with AI-ML engines, disruptive R&amp;D, and innovative propositions.<a class="link" href="https://m2pfintech.com/newsletter/">Subscribe</a>&nbsp;to our newsletter and get the latest fintech news, views, and insights, directly to your inbox. Follow us on&nbsp;<a class="link" href="https://www.linkedin.com/company/m2pfintech/mycompany/">LinkedIn</a>&nbsp;and&nbsp;<a class="link" href="https://twitter.com/m2pfintech">Twitter</a>&nbsp;for insightful fintech tales curated for curious minds like you.

M2P Growth Story: From Chai Conversations to Fusing Fin with Tech

50 Popular Fintech Terms You Must Know

<img src="https://m2p-website-file.s3.ap-south-1.amazonaws.com/m2p-website-file/marketing-cms/m2p-blog/2022/06/Artboard-1-copy-8-3.webp" alt="M2P Fintech" title="" width="100%" height="358">As technological advancements promote growth in our country, lack of financial literacy still prevails. In a recent incident, a farmer has reportedly lost his savings worth two lakhs to rats. He stored his money as cash in his house. The farmer wouldn’t have lost his savings if he was aware of a financial institution. The eradication of financial illiteracy and improving maximum financial inclusion help us overcome such situations.<h2 class="heading-node" id="45b6" style="text-align: justify">What is Financial Inclusion?</h2>Financial inclusion aims to offer primary financial products and services to all individuals and businesses and makes these services more accessible and affordable.Financial institutions aim to offer basic services that include payments, transactions, savings, credit, and insurance sustainably to drive more financial inclusion. New technological innovations in fintech have caused organizations to offer cost-effective services to their customers.<h2 class="heading-node" id="fb52" style="text-align: justify">Measures to improve Financial Inclusion</h2>The Reserve Bank of India started taking measures in 2005 to improve financial inclusion in our country. The government initiated the National Mission for Financial Inclusion (NMFI), including Pradhan Mantri Jan Dhan Yojana (PMJDY), which provides services to unserved areas.Furthermore, the “Digital India” initiative, which provides accessible digital banking services with simplified formal verifications using unique identification (Aadhaar), is also a bold move towards improving financial inclusion in the country.<h2 class="heading-node" id="6804" style="text-align: justify">Fintechs boosting Financial Inclusion</h2>Indian fintechs are the biggest drivers of achieving financial inclusion, with an adoption rate of over 87%. In the recent decade, fintechs have widened operations to provide personalized services without opting for the traditional route. Also, the rise of the popularity of smartphones around the globe led to the establishment of new financial services. “As of February 2021, there is a record of 2.3 billion digital payment transactions made worth over 4 trillion rupees.” From Demonetization in India to the Covid-19 outbreak, people are now more interested in using financial services such as digital payments, lending solutions, etc. Digital financial services help many small and medium-income businesses to offer cashless payments option to their customers.<blockquote class="block-node" id="wp01kwej7">According to an annual report for FY 2020–2021 by RBI, the volume of digital payments is at 453 crores in India.</blockquote>With increasing ideas and innovations, fintechs ensure more inclusion. With the growth in the industry, a wide range of products and services are set to enter the market to offer customized services. Products such as<a class="link" href="https://m2pfintech.com/blog/the-rise-of-digital-payments/"> digital payments</a>, digital credit, <a class="link" href="https://m2pfintech.com/blog/neo-banking-101-all-you-need-to-know/">neo banking</a>, <a class="link" href="https://m2pfintech.com/blog/api-the-power-that-drives-new-age-banking-ecosystems/">API banking</a>, <a class="link" href="https://m2pfintech.com/blog/prepaid-cards-101-a-definitive-guide-for-growth-and-profitability/">prepaid cards,</a> etc., have established effective financial inclusion.<h2 class="heading-node" id="acff" style="text-align: justify">What challenges do we face?</h2><ul class="list-node" id="30k5oemaa"><li>The excluded sections, such as rural, poor areas, often don’t have access to a financial institution and often approach moneylenders.</li><li>A constant need to improve financial literacy as many rural people have less or no awareness of financial institutions.</li><li>Lack of formal identification documents is also a significant challenge when people reach out to a financial service. Poor sections lack access to financial services, as they lack various documents such as proof of identification, birth certificate, etc.,</li><li>Even though people&nbsp;have a financial account, most users still prefer cash. Lack of trust and reliability prevents a customer from accessing the available financial services.</li><li>Gender inequality to access financial services as women pay higher interest rates than men.</li><li>Low-income levels indulge in a myth that financial institutions only offer services to high and middle-income groups.</li><li>Some people are uncomfortable due to language barriers, formal documents, and the formalities that we go through before a financial transaction occurs.</li></ul><h2 class="heading-node" id="e955" style="text-align: justify">Overcoming the Challenges</h2>To alleviate the challenges faced by consumers, there arose a need to innovate new and simplified products. New technologies, fintech innovations, and the digital finance revolution have now become the constant drivers of financial inclusion. There is a constant growth in the sections of digital finance over traditional finance methods.<blockquote class="block-node" id="zr04eywdz">Digital Financial Inclusion ensures that the excluded and unserved population has digital access to financial services.</blockquote>Digital services focus on affordability, customer satisfaction, and sustainability. New digital platforms run by the institutions now accommodate small levels of cash flow. These services allow the low sections to make transactions, thus preventing the use of informal services. Understanding the potential and risks such as operational risks, financial crime risks, etc., while improving digital services can contribute to the growth of digital financial inclusion. Similarly, technological innovations have increased financial inclusion. These innovations aim to regain customers’ trust, rectify geographic and accessibility issues to bring in new consumers. Information technology, smartphone-enabled services have reduced the need for physical banks. With technological development, we can develop a rural information infrastructure that provides financial services to the underserved. Fintechs have also played a significant developmental role in achieving greater financial inclusion. Fintechs acts as a catalyst for financial inclusion as it creates more opportunities for the unbanked population. The shift of digital transactions from traditional transactions has improved self-employment, rural entrepreneurs, small borrowers, mediums, and enterprises. Lack of financial awareness, high cost of traditional services, and other policy gaps were significant challenges while achieving financial inclusion. Fintech startups play a critical role in overcoming these challenges in the economic landscape. The tremendous growth in fintech has shown a positive shift as a report shows that 99.5% of consumers are now aware that they can transfer money and make payments with fintech platforms.<h2 class="heading-node" id="b97f" style="text-align: justify">Fintech products driving inclusion</h2> New fintech products have helped consistently in driving the financial inclusion of the country. As discussed earlier, these products allow the work of financial services and offer a streamlined process. These fintech products applied to reality are the main drivers of financial inclusion.<h3 class="heading-node" id="e38e" style="text-align: justify">Embedded Credit</h3><a class="link" href="https://m2pfintech.com/blog/beginners-guide-to-embedded-lending/">Embedded credit</a> focuses upon integrating ‘lending as a feature’ in digital platforms. Customers receive their credit with the involvement of a familiar interface and eradicate the need for a third-party site. Micro, small and medium enterprises (MSMEs) face difficulty offering small credits, increasing demand here. The B2B e-commerce marketplaces provide the ultimate <a class="link" href="https://m2pfintech.com/blog/factors-and-psychology-behind-the-great-bnpl-allure/">BNPL (Buy Now, Pay Later)</a> option for the retailers while they checkout. BNPL offers these MSMEs to purchase on credit and pay later. BNPL is one of the fast-growing payment options which also helps MSMEs to expand their business. The BNPL would account for 3% of the global e-commerce spend by 2023. Thus, this system provides a convenient platform for consumers to experience new market products.<h3 class="heading-node" id="f250" style="text-align: justify">Digital Payments</h3><a class="link" href="https://m2pfintech.com/blog/the-rise-of-digital-payments/">Digital payments</a> (also called electronic payments) are the method we transfer one point value from one account to another using a digital device. Digital payments are end-to-end digital transactions, and also, they don’t require the usage of physical cards, thus reducing costs.For example, the latest introduction of <a class="link" href="https://m2pfintech.com/blog/e-rupi-indias-digital-upgrade-for-the-underbanked/">e-RUPI</a> which is a digital payment solution created by the Government of India to allow cashless payments. e-RUPI is powered by the National Payments Corporation of India (NPCI), and the one-time payment mechanism is easy, highly secure, and entirely confidential. The distributions are also made easy, safe, and contactless.<h3 class="heading-node" id="7d7d" style="text-align: justify">Neobanking</h3>Neobanking is an innovative method of approach in which financial institutions offer services without physical presence. <a class="link" href="https://m2pfintech.com/blog/top-14-neo-banks-that-reinvent-banking-experience-in-india/">Neo banks in India</a> operate on a low-cost model with minimal to zero monthly fees on deposits and withdrawals, and rock-bottom balance requirements. These drivers bring consumers and businesses across income levels into the fintech fold, fostering financial inclusion. Neo banking is highly famous among the millennials and Gen Z as they no longer use outdated processes. Neo banks use Artificial intelligence and machine learning to create a customer-centric Banking experience, with the aim to reduce human dependence.&nbsp;Neo banks provide millennials and Gen Z their own customized product set, making the process fuss-free. Millennials and Gen Z prefer simplified and easy- manageable finances, thus proving neo banks are a blessing in disguise.<a class="link" href="https://m2pfintech.com/blog/7-steps-to-start-a-neo-bank-from-scratch/"> Curious to know how you can start a neo bank? Check out these 7 steps.&nbsp;</a><h3 class="heading-node" id="3aa0" style="text-align: justify">API Banking</h3><a class="link" href="https://m2pfintech.com/blog/api-the-power-that-drives-new-age-banking-ecosystems/">API Banking</a> provides better means to share data, helps in integrating systems, and makes services more personalized. In API banking, tailor-made products improve the overall customer experience.With the help of API banking, new fintech innovated products offer features and services aligned to provide flexible services. Innovations in API banking have reduced costs and now made it economical for the unbanked and underserved as they can now experience better products and services.<h3 class="heading-node" id="921d" style="text-align: justify">Open Banking</h3>To offer better services, open banking offers third-party financial service providers access to financial data with the help of APIs. <a class="link" href="https://m2pfintech.com/blog/open-banking-a-primer-2/">Open banking</a> is highly prevalent in Europe. Open banks help achieve more financial inclusion as it allows small, medium businesses access particular tools and services that target the needs of their consumers. Innovations in open banking and the experimentation of products can foster higher financial inclusion in the long run.<h3 class="heading-node" id="9d8d" style="text-align: justify">Prepaid Cards</h3><a class="link" href="https://m2pfintech.com/blog/prepaid-cards-101-a-definitive-guide-for-growth-and-profitability/">Prepaid cards</a> help us process payments quickly as we have better cash flow management, easy reimbursements, and more security than cash or cheques. They are a super alternative to carrying cash around. They are available as gift cards, meal cards, and also as travel cards. Prepaid cards are a great way to control business expenses, improve efficiencies and generate revenue streams.&nbsp; However, the time, cost and effort involved in card issuance in-house are huge.The best way to manage card issuance is by <a class="link" href="https://m2pfintech.com/blog/why-should-apis-be-your-holy-grail-for-prepaid-card-issuance/">deploying the right APIs.</a><h3 class="heading-node" id="ee0a" style="text-align: justify">Mobile Wallets</h3><a class="link" href="https://m2pfintech.com/blog/how-to-implement-the-best-prepaid-payment-instrument-ppi-for-your-business/">Mobile wallets</a> are famous and convenient due to their accessibility. Transactions are made easy as we can send, receive and store money easily with the help of our smartphones. In reality, right from a vegetable vendor to corporate and digital firms, every one of us can easily transact if we have a mobile wallet.Mobile wallets ensure that every person can participate in a financial transaction with its cashless and contactless technologies. The whole process boosts the economy while achieving more financial inclusion.The future ideas of the fintech industry will result in product innovations while improving existing ones, thereby offering more affordable and accessible services to both the unbanked and underbanked. Furthermore, the coupling of fintech and financial institutions will help eradicate financial illiteracy and promote financial inclusion. With the acceleration of fintech and its budding ideas, the future of financial inclusion is bright and holds many opportunities that come with new beginnings.Need more info on how fintech can help you? Write to us at <a class="link au mg" href="mailto:business@m2pfintech.com" target="_blank" rel="noopener ugc nofollow">business@m2pfintech.com</a>.<a class="link" href="https://m2pfintech.com/newsletter/">Subscribe</a>&nbsp;to our newsletter and get the latest fintech news, views, and insights, directly to your inbox. Follow us on&nbsp;<a class="link" href="https://www.linkedin.com/company/m2pfintech/mycompany/">LinkedIn</a>&nbsp;and&nbsp;<a class="link" href="https://twitter.com/m2pfintech">Twitter</a>&nbsp;for insightful fintech tales curated for curious minds like you.

Fintech- A Catalyst for Financial Inclusion

<img src="https://m2p-website-file.s3.ap-south-1.amazonaws.com/m2p-website-file/marketing-cms/m2p-blog/2022/04/banner-1251.webp" alt="M2P Fintech" title="" id="pwxzxj8z1" width="100%" height="661">A few years ago, banking was always considered an arduous task with its complexity. But now, when we think of banking, ‘digital transaction’ springs up to our minds immediately, which makes our job simpler. Thanks to Neo banks, it redefines banking in the most user-friendly way and makes it more popular in recent years. Ergo, many customers now prefer using fingers for banking rather than their feet to visit the brick-and-mortar banks.Why such hype for Neo banks?What makes it stand out in the banking sector?We have unraveled everything you need to know about Neo banks in this blog. So, let’s get started right away.<h2 class="heading-node" id="299c" style="text-align: justify">What is a Neo Bank?</h2>Neo Bank is a type of digital bank that works entirely online without a physical branch. It is a customer-focused banking sector that attracts present-day tech-savvy users. They are also recognized as fintech that is demystifying the financial ecosystem actively. With Neo banks’ advanced features, the users can manage money wisely by using only their mobile phones. Moreover, compared to traditional banks, neo banks offer cheaper and faster banking services that include money transfers, lending, mobile-first financial solutions, and many more.<h2 class="heading-node" id="8b98" style="text-align: justify">Three working modes of Neo Banks</h2>Though Neo banks appear to be an app that controls financial services, the working is differentiated into three modes.<h3 class="heading-node" id="c677" style="text-align: justify">(i) Partners with Traditional banks</h3>It is a&nbsp;front-end focused&nbsp;neo bank which does not carry a banking license on its own and partners with a traditional bank to offer a wide range of core banking services. These types of neo banks include non-licensed fintech companies affiliated with existing licensed banks that offer seamless services and products for the bank’s customers. This collaboration ensures banks as their partner and not their opponent.<h3 class="heading-node" id="b6a7" style="text-align: justify">(ii) Bank’s Digital Avatar</h3>Here, the traditional banks develop their own digital-only initiative like neo banks to offer their services more digitally to their customers. They also go on par with the technology advancements to launch neo banking services. The banks that offer digital services through online portal comes under this category of neo banks.<h3 class="heading-node" id="c67b" style="text-align: justify">(iii) Neo Banks with a digital banking license</h3>They are called a&nbsp;Full-Stack&nbsp;neo bank that works only in countries that approve stand-alone digital entities and acquire a license from the Central Bank or the corresponding authority.<h2 class="heading-node" id="8e50" style="text-align: justify">Neo Banks Vs. Digital Banks Vs. Traditional Banks</h2>Banking is now a field where people are offered a lot of options to choose from. There are different kinds of banks that offer different services and qualities. The below image brings out the characteristics between three popular banks — <a class="link" href="https://m2pfintech.com/blog/neo-banking-the-rise-of-new-age-banking/">Neo Banks</a>, Digital Banks, and Traditional Banks.<img src="https://m2p-website-file.s3.ap-south-1.amazonaws.com/m2p-website-file/marketing-cms/m2p-blog/2022/04/int.webp" alt="M2P Fintech" title="" id="69y0499an" width="100%" height="529">As the name says, traditional banks are the oldest of all with the most trustworthy customer relationship. They also specialize in a wide range of services and products but with tons of paperwork and, at times, online data, which demands extremely long wait times. But nowadays, traditional banks have also adopted digital tools like e-mail, SMS, application, website, etc.The next entrant is the digital banks, which are similar to Neo banks since they also offer banking services online. To simply put, they are traditional banking with a digital touch that allows users to manage finance 24/7 via an electronic/online platform. Digital banks eliminate customers’ visits to physical bank branches and automate traditional banking services with no paperwork. They uplift traditional services with a simple equation —&nbsp;Online Banking + Mobile Banking = Digital Banking.As you can see, Neo bank is an upgraded version that suits the present-day banking needs digitally and is user-friendly. Neo banks stand out with their simplified customer-centric banking approach with wise financial management. Users are satisfied with their 100% quick and easy digitized services with anywhere anytime accessibility, making them the most profitable business model.<h2 class="heading-node" id="9b30" style="text-align: justify">What makes Neo banks a lucrative fintech offering?</h2>Neo banks are one of the profitable business models that emerged in the recent few years. With their ingenious services, these financial institutions are hitting the jackpot in ways that benefit themselves and their users. The below-listed features substantiate neo banks’ success:<ul class="list-node" id="kzvx0pa02"><li>Fewer fees and faster banking services make it more popular and cost-effective even among underbanked sectors.</li><li>Neo bank is a customer-centric banking avatar as they automate services according to their users’ preferences.</li><li>They blend emerging technologies like Artificial Intelligence and Machine Learning to end the tedious banking process.</li><li>Customers enjoy various financial services like account creation, international transactions, or any services, quicker at any time and any place.</li><li>AI and data insights-driven app that tracks every transaction and generates reports as per user’s requirements.</li><li>Smart saving and Investment options are now possible with just a smartphone.</li><li>Neo banks act as a digital crust, making the core banking services crisper and accessible for their users.</li><li>They fill the digital gap and enable traditional banking services to Gen Z.</li><li>Collecting and analyzing data to give their users highly personalized and customized services.</li></ul>As a result, banking turned smarter with neo banks and easily reached out to unbanked and underbanked sectors. It also impacts banking today and tomorrow with its unmatchable digitized financial services.<h2 class="heading-node" id="smmjd1o8d" style="text-align: justify">Neo bank and its rising popularity</h2>The Covid-19 pandemic was the main reason which triggered its popularity when people were concerned about physical cash for safety reasons. People were more exposed to digital banking, which made brick and mortar banks have a healthy collaboration with neo banks. Their out-of-the-box strategies gave sudden popularity for neo banks.Starting from targeting the Gen-Z audience with product marketing, neo banks focus on the end-user experience by tailoring their User Interface to give the best possible user experience. Also, the customer gets to enjoy a better interest rate minus the need for lengthy paperwork.Furthermore, neo-banks have the ability to offer services based on popular customer opinion, and they further improve the stickiness by tailoring the services individually. When customers feel their opinions are being heard and fulfilled, they stick with the service provider. Neo banks now deploy this strategy to target specific audiences.These digital-only banks are ruling the banking space since 2017 with their innovative strategies and methods. We have&nbsp;Finin&nbsp;India’s first consumer-facing neo bank, fueled by our own <a class="link" href="https://m2pfintech.com/">M2P’s</a> API, which gives users a better track of their finances. Finin offers features like a detailed break-up of user spending and completely digital services with high bank-level security.Backed by banking licenses of the traditional banks, neo banks are adding increasing value by the day to the financial ecosystem; in fact, they can be termed as the new-age banks of today.<h2 class="heading-node" id="1101" style="text-align: justify">Turning stumbling blocks into stepping stones</h2>Even though it is one of the profitable business models in the industry, challenges are to everyone. Neo banks have limited banking services and products, unlike traditional banks, since they are relatively new. Indeed, we could see this challenger bank with a wide range of products and services in few years.Traditional banks being a string participant for decades with unbeatable trust relationships with their customers, neo banks find it difficult to gain trust. But, with collaboration with traditional banks, they are definitely coming up with great strategies and services to establish as a trustable one among customers.Neo banks are withstanding in this ambitious field with many robust financial institutions around. Every entrant, including traditional banks, would have faced their stumbling blocks and crisis, which led to the products and services we enjoy now. So, neo banks being an active player is turning every stumbling block into a stepping stone in its way.<a class="link" href="https://m2pfintech.com/newsletter/">Subscribe</a>&nbsp;to our newsletter and get the latest fintech news, views, and insights, directly to your inbox. Follow us on&nbsp;<a class="link" href="https://www.linkedin.com/company/m2pfintech/mycompany/">LinkedIn</a>&nbsp;and&nbsp;<a class="link" href="https://twitter.com/m2pfintech">Twitter</a>&nbsp;for insightful fintech tales curated for curious minds like you.

Neo Banking 101: All you need to know

<img src="https://m2p-website-file.s3.ap-south-1.amazonaws.com/m2p-website-file/marketing-cms/m2p-blog/2022/04/banner1251-8.webp" alt="M2P Fintech" title="" id="rvrudoanq" width="100%" height="317">India has the highest Fintech adoption rate of 87%, significantly higher than the global average rate of 64%.India is rapidly evolving and is one of the fastest-growing Fintech markets globally and has also emerged as Asia’s biggest destination for Fintech deals, leaving behind China. Advanced technologies and a customer-centric approach are what bring this thriving industry its profound growth in this decade.Having witnessed this flourishing industry and its achievements, let’s look back on its evolution rather a revolution. So, gear up as this article throws light on how the fintech industry has steadily evolved over the years.<h2 class="heading-node" id="5995" style="text-align: left">The fintech landscape in India</h2>Ever since the start of modern society, finance and technology were entwined robustly. The beginning of the Fintech industry globally is traced back to the 19th century when technology started to mark its place in history, which made the fintech industry flourish.According to a research paper by Arneris, Barberis &amp; Ross, the significant stages of fintech are differentiated into the following eras, which will help us understand the steady fintech evolution better.<h2 class="heading-node" id="ab20" style="text-align: left">Fintech 1.0</h2>Outmoded technologies like the telegraph and Morse code were first used to transmit financial information across borders to strengthen the infrastructure rapidly. Then, later during the 1950s, the credit card was first introduced and was the first financial product in the industry, and to everyone’s surprise, it is still in the game.In India, many British Raj banks were nationalized post-independence, when the country’s economic growth started to shoot up, and banking services were availed by many citizens.<h2 class="heading-node" id="aff2" style="text-align: left">Fintech 2.0</h2>This era has marked the switch from analog to the digitalization of finances led by traditional financial institutions. People perceived finance management and financial institutions differently after the outbreak of the internet. The 1980s and 1990s were the high point in history when online banking pushed the fintech industry to the limelight with electronic installment framework, web-based business models, web-based shopping, portable banking, and digitization of banks.The banks started to experiment with online banking in the 1980s, got the hang of it by the 1990s, and made it even more popular. In India, ICICI Bank was the first to step into this internet banking space with limited banking services like access to account details and transfers within the bank. Other banks also started to follow the path and rapidly altered the way of banking. It is no wonder banks had faced challenges like technical mishaps, fraud, complex cross-border transactions, payment methods, etc.Fintech 2.0 gave the fintech industry’s modernistic look, and the below listed important events triggered the rise of fintech in India.<ul class="list-node" id="ef0j04wu4"><li>The first Indian ATM to withdraw cash was launched in 1987, Mumbai by HSBC.</li><li>In 1980, the Central Bank of India launched the first credit card in India.</li><li>Stanford Federal Credit Union was the first institution to let its customers access banking functions via the new World Wide Web in October 1994.</li><li>PayPal launched in 1998, which took the payment systems further after the internet boom.</li><li>The Global Financial Crisis in 2008.</li></ul><h2 class="heading-node" id="2020" style="text-align: left">Fintech 3.0 — The rise of Indian Fintechverse</h2>By the time the 21st century rolled around, India had emerged as one of the active players in this era with a plethora of smart advancements and entrants. Moreover, the Global Financial Crisis in 2008 paved the way for the fintech industry to gain traction and become ubiquitous. People started to shift from the traditional banking system slowly and developed trust over the new entrants.The release of Bitcoin v0.1 in 2009, Google Wallet in 2011, Apple pay in 2014 was the start that shaped the face of the fintech industry in India. Since India focused on customer-centric financial products and services, it has seen more rise in few years. The 2016 demonetization drive pulled in a lot of significance for the fintech. The Indian government’s move towards Digital India and to turn India into a cashless economy with financial inclusion also hands out immense support to fintech companies.Ever since the traditional banks were struggling to roll out their banking services integrated with the SWIFT system, fintech start-ups started to share the industry space through collaboration. SWIFT system’s initiative like SWIFT GPI provides end-to-end tracking with high security for the transactions. The Indian financial sector opened the door wide open for fintech to offer innovative and cost-efficient financial solutions.The rapid adoption of fintech had many Indian firms establish like Paytm, Phonepe, Mobikwik, Freecharge in few years. This made sure smartphone adoption is here to stay and will become the primary method for people to handle their money wisely.The span of around five years led to more than 2000 fintech companies in India at present and became the era of fintech start-ups. This made even the traditional banks rethink their strategies and welcome more fintech inclusion in their services to get hold of present-day tech-savvy customers. Open Banking, Banking as a Service (BaaS) were adopted by traditional banks that allow third-party service providers to access their financial data. BaaS further fuelled the entry of neo banks and digital banks in India.Fintech applications like mobile payments, automated investment apps (Robo-advisors), online lending businesses, and crowdfunding platforms have taken the financial industry by storm.The following technologies contribute oodles of success to the fintech ecosystem:<ul class="list-node" id="852pkzxgr"><li>Artificial Intelligence (AI)</li><li>Machine Learning (ML)</li><li>Big Data and Data Analytics</li><li>Robotic Process Automation (RPA)</li></ul><h2 class="heading-node" id="4ca4" style="text-align: left">Factors that led to India’s immense Fintech growth</h2>The quick adoption of new solutions and financial services made India, a country with the highest fintech usage. The factors which drive India’s fintech growth to the next level are listed below.<h3 class="heading-node" id="0376" style="text-align: left">Painless payments</h3>Easy digital payment is the key player in the fintech ecosystem, gaining trust and pulling many users in. Since its beginning, the merchants and shoppers have enjoyed this and made it even popular during the coronavirus outbreak. People were concerned about making a physical payment for safety reasons and quickly adapted to these digital payment modes in a jiffy. The demonetization drive in 2016 made every Indian switch to digital payments and online transactions, which was a green flag for fintech entrants at that time. People now make their digital cash flow without any second thoughts as they feel secure and safe more than handling physical cash.<h3 class="heading-node" id="b2cf" style="text-align: left">Payment wallets &amp; UPI apps</h3>This is one of the services which transformed the way people carry cash. Multiple digital payment apps like Google Pay, Apple Pay, Amazon Pay, PhonePe, etc., are definitely a booster for ‘Cashless India’. Features like easy transaction, secure, fast, multiple options benefit these payment wallets to make waves in the Indian fintech industry. Moreover, Artificial Intelligence (AI) and Big Data help users personalize their payments and store multiple bank accounts in a single digital wallet.<h3 class="heading-node" id="2917" style="text-align: left">Digital lending &amp; insurance</h3>Fintech is the cherry on the cake when it comes to market-based lending. When already banks were doing their great job in lending and insurance, fintech collaborated to make it even more feasible by giving enormous options, online availability, customer-centric loans, and speedy approval for businesses and customers.<h3 class="heading-node" id="b7e3" style="text-align: left">Wise finance management</h3>After the fintech boom, people witnessed many changes in the way they handle their finances. As every Indian has started managing finances digitally, it is easy to keep track of their expenses and make a calculative move. Robo-guides or Robo- advisors also help in wise finance management by providing automated, algorithm-driven financial planning services.<h3 class="heading-node" id="d8c7" style="text-align: left">Remittances</h3>Fintech's eases the way banks were making international transfers for decades. The remittance was considered an arduous task in the past, involving high fees, tons of paperwork, no tracking of money, multiple players, and a great deal of time. But now, fintech defines it as a flexible real-time payment with transparent fees, end-to-end payment tracking, multi-currency payments, and so on.Definitely a worthy throwback on this Independence Day 2021?This nostalgic look back at India’s Fintech evolution promises what the busy future holds for the country. The finance industry will flourish, but it demands a little more wait to reveal further episodes. So, let us wait to witness India evolve more and better in the future.<a class="link" href="https://m2pfintech.com/newsletter/">Subscribe</a>&nbsp;to our newsletter and get the latest fintech news, views, and insights, directly to your inbox.Follow us on&nbsp;<a class="link" href="https://www.linkedin.com/company/m2pfintech/mycompany/">LinkedIn</a>&nbsp;and&nbsp;<a class="link" href="https://twitter.com/m2pfintech">Twitter</a>&nbsp;for insightful fintech tales curated for curious minds like you.

Evolution of the Indian FinTechverse

<img src="https://m2p-website-file.s3.ap-south-1.amazonaws.com/m2p-website-file/marketing-cms/m2p-blog/2022/06/Artboard-1-copy-8-4.webp" alt="M2P Fintech" title="" width="100%" height="529">The past few days, we have been hearing, seeing or reading the word e-RUPI everywhere. And it has ignited a plethora of questions amongst both consumers, corporates and fintech alike. But, while the initial impression was that it was the precursor of Central Bank Digital Currency (CBDC), it was not so. Launched on August 2nd, 2021, at 4.30 pm, e-RUPI was developed by the National Payments Corporation of India on its UPI platform. It is a contactless and <a class="link" href="https://m2pfintech.com/blog/ready-to-sneak-peek-into-global-cashless-societies/">cashless</a> instrument for digital payment. The Department of National Health Authority, Ministry of Health &amp; Family Welfare and the Department of Financial Services have also collaborated with NPCI in formulating and launching this solution.<blockquote class="block-node" id="bta04v1ef">E-RUPI signifies how 21st century India is moving ahead with the help of modern technology and connecting technology with people’s lives,” says prime minister Narendra Modi</blockquote>The primary application of e-RUPI is to disperse welfare payments to the right beneficiaries using a one-time payment mechanism. It eliminates the need for middlemen and connects the program sponsors and beneficiaries directly. It is similar to a digital gift card and requires no bank account, smartphone or <a class="link" href="https://m2pfintech.com/blog/the-rise-of-digital-payments/">digital payment</a> app. It is a person and purpose-specific payment initiative.<h2 class="heading-node" id="76de" style="text-align: justify">How e-RUPI works?</h2>e-RUPI is a one-time payment mechanism delivered as a QR code or an SMS string to the beneficiary’s mobile number. It works more like a prepaid gift card that can be redeemed only at specific service provider touchpoints.Also, the system ensures that the service provider is paid only after the beneficiary completes the transaction. Being <a class="link" href="https://m2pfintech.com/blog/how-to-implement-the-best-prepaid-payment-instrument-ppi-for-your-business/">a prepaid payment instrument (PPI), t</a>he service provider is also assured of the payment. There is no need to follow any intermediary for payment transfer.It doesn’t require any debit or <a class="link" href="https://m2pfintech.com/blog/credit-card-processing-a-definitive-guide/">credit card</a> for its function. In short, e-RUPI is all set to connect beneficiaries and sponsors digitally, minus the need for a physical interface.Built on NPCI’s UPI platform, e-RUPI has onboarded banks as issuing entities. As a result, any corporate or government agency can approach these issuing entities and deploy an e-RUPI program for their target beneficiaries.At present, 11 banks support this initiative, and they are split into two categories:Banks that can issue and accept e-RUPI vouchers:<ul class="list-node" id="bdxkjcpgv"><li>The State Bank of India</li><li>ICICI Bank</li><li>HDFC Bank</li><li>The Punjab National Bank</li><li>Axis Bank</li><li>Bank of Baroda</li></ul>Banks who can only issue e-RUPI:<ul class="list-node" id="15mucjjom"><li>Canara Bank</li><li>IndusInd Bank</li><li>Indian Bank</li><li>Kotak Bank</li><li>Union Bank of India</li></ul><h2 class="heading-node" id="451a" style="text-align: justify">Are e-RUPI and Central Bank Digital Currency one and the same?</h2>Incidentally, e-RUPI’s announcement came a few days after announcing the phased implementation strategy of Central Bank Digital Currency (CBDC). So, it sparked speculation that e-RUPI might be a trail leading to CBDC.But there exists a rudimentary difference between the two. e-RUPI is an e-voucher based system that disburses money as it is still supported by the existing Indian rupee. Whereas CBDC deals with money creation. Click here to know more about <a class="link" href="https://m2pfintech.com/blog/central-bank-digital-currency-cbdc-101-a-primer/">CBDC</a>.<h2 class="heading-node" id="acab" style="text-align: justify">Why the e-RUPI system and its use cases?</h2>For a long time, there have been many instances of people not receiving the subsidies intended for them. Sometimes there also have been instances where the beneficiary in question doesn’t exist at all. And the Indian government had lost many millions in welfare payments alone.But, then, the introduction of Aadhar-linked subsidy let the government transfer directly to the beneficiary’s bank account. This was termed as Direct Benefit Transfer. But this also resulted in a roadblock as there are millions of underbanked and unbanked population in India.However, the percentage of mobile penetration has been impressive, so this voucher-based system will help the government reach the right beneficiary without any deviations in the system.e-RUPI will plug leakages in the welfare delivery system and can be adapted to other welfare schemes such as Mother and Child welfare schemes, drugs and diagnostics under schemes like Ayushman Bharat Pradhan Mantri Jan Arogya Yojana, fertilizer subsidies and so on.Given e-RUPI’s mission to plug in the leakages of the welfare system, the use cases can be expanded to many situations. Also, with the people rapidly adopting digital payments, e-RUPI can help bring financial inclusion even to the unbanked. The future and developments of e-RUPI look bright with many miles to go.<a class="link" href="https://m2pfintech.com/newsletter/">Subscribe</a>&nbsp;to our newsletter and get the latest fintech news, views, and insights, directly to your inbox. Follow us on&nbsp;<a class="link" href="https://www.linkedin.com/company/m2pfintech/mycompany/">LinkedIn</a>&nbsp;and&nbsp;<a class="link" href="https://twitter.com/m2pfintech">Twitter</a>&nbsp;for insightful fintech tales curated for curious minds like you.

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