Today, the fintech industry is continuously disrupting the financial services ecosystem. They are enabling the use of automation to deliver an enhanced customer experience. One such example is API banking. APIs help banks in increasing customer satisfaction, meet the ever-changing needs of customers and provide secure banking solutions.

Banking, as a concept, has been around for ages. Today, they are experiencing a digital evolution. Amidst this, traditional banks are finding it difficult to embrace constant change. Here’s where fintech comes into the picture. Their solutions are transforming banks into customer-centric institutions with a digital address.

In this blog, we will explore how banks and fintech are working together to offer improved banking services and why API banking is fintech’s next big bet.

API banking

API banking focuses on giving the consumer an overall amazing experience through applications, APIs and analytics. Over the last few years, API banking has witnessed immense growth. The reasons include a rise in customer expectations, a rise in the regulatory environment and competition from fintech firms.

Implementation of API in the banking sector

APIs enable ‘easy access’ to banking services and data. They have the transformative potential to become agents of disruption. APIs can help in enabling compliance and simplifying legal systems. They provide an opportunity to innovate and be more efficient. The end customer reaps the benefits in the form of better banking products and services.

Banks are now taking initial steps to enhance their capabilities in terms of business expansion, technology development and customer engagement. Today, India has many tech-first banks. The primary goal is customer-centricity and the vision is to be customer engagers, instead of product pushers.

Fintechs are using API banking services to:

• Control, analyse and track all financial movements in one place
• Give account balances in real-time
• Process faster payments
• Reduce administrative hardships
• Provide enhanced visibility of cash flow
• Have higher flexibility
• Streamline financial services

Data analytics and API banking

Banks can collect data related to customers and create tailored products and services. This can be done with the help of fintech. Fintech firms can offer innovative solutions and better technology that eventually lead to customer delight.

The payment industry is trying to leverage the benefits of API banking and data analytics to create relevant solutions and personalised offerings for customers.

Bottom line

The banking industry is all set for yet another digital revolution and they will need APIs as their arsenal. As customers become more connected and technologically advanced, banks and fintech will succeed only when they successfully innovate new solutions for traditional problems. The financial institutions of the future will stand only if they can keep up with the growing digital transformation.

Financial inclusion means facilitating access to financial products and services to the entire population irrespective of economic and geographic conditions. Accessibility has been an issue in the formal financial system since its inception. However, recent advancements in technology have allowed fintech companies to positively impact the financial service through inclusion.

While 20% of the Indian population is still unbanked, fintech companies are working hard to bank the unbanked and increase the financial inclusion possibilities. By leveraging the existing ecosystem with emerging technologies, fintech makes banking accessible, simple and cost-effective.

The RBI has been of the view that fintech can potentially transform the financial landscape by providing consumers with a variety of financial services at competitive prices. It also opens up upskilling channels for financial institutions as well. Within the Indian financial system, there are large banks, mid-sized banks that include niche banks, small finance banks, regional rural banks and co-operative banks. Fintech and digital players are now the fourth arms of the system and the NPCI has helped provide them with innovative solutions such as Unified Payment Interface (UPI), Application Programming Interfaces (APIs) and Aadhaar-based payments.

Here’s how fintech can lead the way for financial inclusion:

1. Innovation and use of technology:Fintech companies innovate to enable secure digital payments. With AI, they have been successful in creating instant digital payments that allow transfers, verification, cashless buying and selling, and more. They are all about convenience and flexibility. They are also easy to use. From booking LPG cylinders online to paying utility bills has all become clicks.
2. Easy access to credit:Traditional banks typically require a lot of paperwork. Fintech companies, on the other hand, require minimal paperwork. They also use AI for risk assessment on indicators such as income and spending patterns. This is greatly useful for local businesses for micro-financing services and capital investment. Fintech companies also use various tools to educate their audiences. Financial literacy is the way to go forward. Awareness about qualifying for loans and fulfilling credit requirements helps users as well as fintech.
3. Innovation and compliance: Compliances such as identity verification are fewer for fintech companies. Moreover, the RBI has allowed eAadhaar verification and video KYC to promote digitisation and reduce customer acquisition costs. All this works in favour of fintech companies and they can innovate and roll out new features and products faster; while also adhering to government regulations.
4. Reaching far and wide:Internet usage has drastically increased in the country. In areas where physical banks cannot be set up, fintech companies have a massive advantage. They can provide access to basic products and services and help unbanked users save and grow their money. Fintech companies can help uneducated and semi-educated users with easy onboarding. They can also provide customer-friendly services with the integration of AI and ML with Big data.
5. Trustworthiness:Most people are skeptical of online payments due to a lack of trust. Biometric technology plays a major role here. It makes banking faster, more reliable and more efficient. It can ensure the highest level of authenticity and prevents data from getting compromised.

Summary

India has an 87% fintech adoption rate. This is higher than the world’s average adoption rate of 64%. There is no denying that fintech is working towards next-generation financial solutions. They will also without a doubt contribute to financial inclusion.

Thanks to fintech companies’ innovative solutions, the future of financial inclusion in the country look promising.

Technology has revolutionized the banking sector and made the transfer of funds from one account to another incredibly easy. In India, there are different ways of sending money online – RTGS, NEFT, IMPS and UPI. In this article, we will compare and contrast the basics of IMPS, NEFT and UPI. We will also discuss which mode is better for you!

NEFT – National Electronic Funds Transfer

NEFT enables you to transfer any amount to your recipient’s account in a one-on-one transfer. They don’t have a maximum limit of funds that can be transferred in a day. The system is available round the clock, on all days (24/7/365) and funds are transferred in batches and are settled in 48 half-hourly time slots throughout the day. The only requirement is that banks should be NEFT-enabled.

All you need to do is to log in to your net banking portal and add your recipient as a beneficiary to transfer funds via NEFT. Details such as name, account number, account type and IFSC code need to be added under the Add New Payee section.

IMPS – Immediate Payment Service

With IMPS, you can transfer funds electronically from one bank to another without any hassle. The service is available 24/7 and you can transact even on bank holidays. However, it allows you to transfer amounts up to ₹5 lakhs instantly. It is a service offered by the National Payments Corporation of India (NPCI). IMPS transactions are cleared instantly, unlike NEFT which processes transactions in batches. IMPS is also available completely online.

UPI – Unified Payments Interface and QR

UPI is also launched by the NPCI. Using UPI, users can pay directly to different merchants from their bank accounts. There’s no need to type card details, IFSC codes or net banking passwords. At present, the upper limit per UPI transaction is Rs.2 Lakhs. UPI transactions can be done on a smartphone with the internet. However, recently, the NPCI introduced UPI 123PAY.

Through UPI 123PAY, feature phone users will now be able to undertake a host of transactions based on four technology alternatives. They include calling an IVR (interactive voice response) number, app functionality in feature phones, missed call-based approach and also proximity sound-based payments.

Know more about UPI 123PAY on the NPCI website.

With UPI, you cannot transfer funds abroad. But you can receive it through 2 platforms – Wise and Western Union. Currently, 316 banks are live on UPI (April 2022). To perform a UPI transaction, you can PUSH (send money) or PULL (request money).

Unlike IMPS and NEFT, you do not need to add a beneficiary for UPI. One can simply send money through a Virtual Payment Address (VPA) or a QR code. Moreover, a single bank account can be linked to multiple Virtual Payment Addresses. This cannot be done with NEFT or IMPS.

As of April 2022, the value of UPI transactions was 9,83,302.27 crores.

The QR code payment system consists of the acquirer, the issuer and the NPCI (transaction processing engine). It has initiated a new way for customers and merchants to exchange funds using mobile phones. This was introduced in an attempt to encourage more people to use digital payments instead of cash. Some features include low-cost infrastructure, push-based traction, remote management of merchants and customers, and so on.

The QR-based market is advancing at an accelerated pace. Some ATMs can now dispense cash without the use of a physical ATM card. All you need to do is scan a QR code using your UPI account, select your bank account and enter your PIN. This leads to quicker transactions and accessibility, as not everyone carries a wallet or an ATM card.

Virtual Address-Based Payments and Collections with Mobileware

With this UPI-based product, you can make peer-to-peer and peer-to-merchant payments without sharing personal details. All you need is the virtual address of the payee to transfer funds instantly. You can also make payments from your bank to any other bank; the process is fully interoperable. It can easily integrate into any app to enable real-time payments and collection.

Mobileware’s QR solution is a winning product that has removed dependencies on POS machines and card payments. It provides you with a simple product that is easy to integrate and provides the user with a ‘WOW’ experience.

You can get in touch with us – here.

Mobile Banking is essentially having a bank in your pocket at all times. All you need is a smartphone and a banking app that can help take care of all bank related activities. The global mobile banking market was valued at $715.3 million in 2018 and is expected to reach $1,824.7 million by 2026, registering a CAGR of 12.2% from 2019 to 2026.

Over the last few years, digitization of user experience has been a high-level priority for most financial institutions. This has led to an increased usage of sophisticated technologies such as big data, machine learning and blockchain.

Benefits of Mobile Banking

Mobile banking apps not only help in managing money but also offer convenience and advantages. Listed below are some benefits that are worth enjoying.

1. 24X7 access:Unlike a traditional bank with fixed working hours, mobile banking is accessible at all times. This saves a lot of time. You can deposit a cheque or make payments across the world — while sitting on your couch! Some apps also use real-time notifications and smart geolocations for easy assistance.
2. Money optimization:Banking apps can also be used to understand monthly expenses like never before. Some apps help you organize your digital money and aid you in savings. Algorithms are designed to spot when you are spending excessive amounts, forecast your spending patterns and provide you with opportunities to save money.
3. Better security:Apps usually ask you for a username and password when you log in to a mobile banking app. You can additionally incorporate multifactor authentication, for example, a code is sent to your phone for transfers above a certain amount. Apps also let you scan your face or use biometric authentication to protect your digital banking experience.
4. Add-on benefits:Several mobile apps extend different offers such as personal loans, schemes and extensions of credit card limits to their users. AI-based algorithms can also help the user make important financial decisions based on their past spending habits. Apps are a great way to manage investments too.
5. Intuitive banking:Banks are focusing on making investments in technology to improve the overall customer experience. New developments make banking interfaces easier, personalized and convenient to use. Banking apps can offer a comprehensive view of your financial holdings, expense schedules and easy to understand charts at the click of a button.

Going ‘Digital’ with Mobileware Technologies

We provide you with a unified platform that helps you in getting the work done online – with the touch of a button. Having helped various banks and financial institutions find a place in the digital world, we aim to give the users a seamless banking experience at their fingertips.

Mobileware Technologies provides a unified platform for all channels, such as mobile banking, SMS banking, and more. The solution can be integrated with ease with all major database softwares and has the highest security with AES encryption. Threshold checks on transactions limit and velocity security are at the product’s core.

You can contact us – here.

The Road Ahead

The ecosystem of mobile banking is user-friendly and focuses on providing an advanced experience to users. Some exciting trends to look forward to include touchless transactions, transaction-based insights, AI-powered services to provide customized financial advice, voice command, and so much more.

Users need stable, intuitive and secure mobile banking apps. Mobile banking is fundamentally redefining the way banking is done and the future is full of exciting opportunities and technologies!

The basics of e-RUPI

Contactless and cashless digital payment solution – e-RUPI – was launched on 2nd August 2021, under the ‘Digital India’ initiative. The National Payments Corporation of India (NPCI), developed this solution in association with the Department of Financial Services, the Ministry of Health and Welfare, and the National Health Authority. It is a digital voucher that is person-specific and purpose-specific and can be used to deliver social security benefits.

Working of e-RUPI

e-RUPI is a contactless digital payment system that is delivered to the mobile phones of beneficiaries in the form of a QR Code or an SMS String. It works like a prepaid voucher, redeemable at accepting centres without any credit or debit card, a mobile app, or Internet Banking. They act like e-gift cards.

NPCI will connect the sponsors of the services with the beneficiaries and service providers digitally, without any physical interface. The users can redeem the voucher without a card, a payments app, or internet banking access at the service provider. The payment will be authorised by institutions such as the government and banks.

e-RUPI should not be confused with Digital Currency that the RBI wants to introduce. Instead, it is a purpose/person-specific digital voucher.

Issuing vouchers

NPCI has onboarded banks that will act as issuing entities. The beneficiaries will be verified through their mobile number (OTP verification by Aadhaar). A voucher will be allocated in the name of the given person and delivered to the same person only. Even if there is no bank account or a smartphone, these vouchers can be used to access benefits.

e-RUPI technology stack is provided to two of the 11 live banks as per NPCI. The two banks being, Punjab National Bank and Bank of Baroda.

Use cases

As mentioned, e-RUPI will deliver welfare services. It can also be used for delivering services under various government schemes meant for providing nutritional support and drugs under Mother and Child welfare schemes, TB eradication programmes, drugs and diagnostics under schemes such as fertilizer subsidies, Ayushman Bharat Pradhan Mantri Jan Arogya Yojana, etc. The NPCI has also tied up with hospitals where e-RUPI can be redeemed.

Benefits for users

• Easy and secure:The voucher can be authorised simply with a verification code shared by the beneficiary.
• Hassle-free and contactless payment solution:There is no need for handling cash or cards.
• Quick redemption:The voucher can be redeemed in a few steps.

Benefits for corporates

• Cost reduction Since the transaction does not require any physical issuance of a card or voucher, it leads to a reduction in costs.
• Maximum visibility Issuers can track the voucher redemption process.
• Safe:The transactions are quick, contactless, and safe.

Banks live with e-RUPI

Banks such as the State Bank of India, HDFC Bank, ICICI Bank, IndusInd Bank, Canara Bank, Bank of Baroda, Punjab National Bank and Axis Bank are a part of the e-RUPI solution. More banks and payment apps are on their way to join the initiative.

Takeaway

e-RUPI aims to help everyone achieve targeted, transparent, and leakage-free digital money delivery. It is an excellent step in connecting people’s lives with technology. We hugely welcome this move!