Sinha – who outlined the future of the startup’s global expansion plans along with opportunities for growth in Application Programming Interface (API)-led banking, cashfree payments – was speaking on the occasion.
ET Future of Money Summit
an initiative to
Highlight innovations and developments
Which will shape the future of finance and drive India’s transition towards a truly digital and cashless economy.
Payments and API banking solutions provider Cashfree Payments, which processes over 1.5 million transactions per day for a single merchant, has collaborated with all major banks to build the core payment gateway and banking infrastructure that powers the company’s products. Does and also integrates with major platforms such as Shopify, Wix, Paypal, Amazon Pay,
and Google Pay, among others.
Recognition of ‘Super-Fintech’
“It’s high time we start recognizing the big fintech intermediaries on top of which smaller fintechs can be developed. These big fintech middlemen, or super-fintechs, load up on banks for things around data, accessibility, and privacy. They can also enable the creation of more fintech innovations and facilitate fuller access to banking services for the larger market,” said Sinha, Miloni Bhatt, Editor – Digital Broadcast, an association with ET.com Said in the virtual interview.
Super-fintech platforms – which aggregate APIs across multiple regulated entities – could enable access to banking and other financial APIs, where entities would need to meet predefined risk criteria to gain access to a specific level , thus enabling a range of Banking-as-a-Service (BaaS)-driven fintech models.
“Today, the entire ecosystem is working on a bank and fintech partnership. Now, it is getting difficult for banks to work with all kinds of fintechs as banks do not have any level of access based on the use case. So banks either open up all their APIs to fintechs or they don’t offer anything,” Sinha said, as he explained the need for a super-fintech model.
“However, if the bank creates a layer between them, or a super-fintech layer, then the super-fintech can provide tiered access to smaller fintech firms depending on the use case. So the time has come for the whole ecosystem. The mechanism should regulate such intermediaries, so that more filters can be created and things can be done in a more structured, disciplined and secure manner,” Sinha said.
Watch the full interview here:
Banking-as-a-Service Platform, Accounts
Last year, Cashfree Payments launched Accounts, its BAS platform that enables fintech startups, NeoBanks and other account issuance platforms to integrate their products with major banks via APIs, and provide their users with banking accounts. Allows to create and manage your transactions digitally.
Apart from bank accounts, Cashfree Payments is now working on other products like cards and will work on fixed deposits and investment offerings.
“I believe that once we are ready with a full platform for all products, we will see a lot of Neobanks and different types of platforms be able to create a better, more smooth experience for users. There is a very big charter which we are following and we are just getting started,” Sinha said.
Sinha said the startup already has around 10 beta customers who are using cashfree accounts, seeing “good traction” both at small and medium enterprises and in the consumer space.
“What Cashfree Payments is trying to do is to create a platform that will aggregate the APIs of all these major banks so that all these third-party developers, Neobanks and fintech platforms can integrate the Cashfree APIs and build their own services within weeks. With banking products to go live. In this way, democratization of entire banking, payments can be done in the ecosystem much faster than the way it is happening at the moment,” Sinha said.
Currently, working with one bank takes about three to four months to integrate with their API, which means working with four to five banks will take at least 15-18 months.
Embedded Financial Services
Going forward, Sinha believes there will be a need for holistic innovation around fintech to enable integrated payment and banking services and solutions for Indian users, including India’s next 500 million+ first time online users.
“Instead of just offering vanilla payments or vanilla banking services, if they can be part of a larger app and embedded with payments and banking, you can grow the use case and usage across the Indian digital ecosystem. Huh. Not many people can see the value in PureBanking or PurePayment app. But if you combine this with something that users love or use, the use of core banking and core digital payments will increase in those markets,” Sinha predicted.
The integration of banking and payments with other services will not only democratize access to banking services and enhance the user experience, but will also provide more choices in the hands of users, thus increasing the overall competition between banking and payment service providers, Sinha said.
Cross-border payments and global plans
In July, Cashfree was also one of several entities that received the Reserve Bank of India’s approval for its cross-border payment solution, after the second group was found acceptable as per the defined conditions for testing under the regulatory sandbox.
“After approval, any consumer finance app or any wealth management app can use CashFree Payments in the backend and consumers will be able to seamlessly buy any foreign stock listed on those foreign exchanges. So this is approval and this is going to be the first time that it was not allowed earlier. So we are very excited,” said Sinha, who expects to go live with three or four exchanges ‘very soon’.
Cashfree’s Cross-Border Payment Products Will enable Indian fintech companies to buy publicly listed shares, exchange-traded funds (ETFs), mutual funds by Indian investors, assets listed on foreign exchanges such as Nasdaq through Unified Payments Interface (UPI) or net banking.
The startup, whose products are used in eight other countries including the United States, Canada and the UAE, is looking to expand its presence in emerging markets including Southeast Asia, the Middle East, North Africa and Sub-Saharan Africa.
Cashfree is backed by Silicon Valley investor Y Combinator, Apis Partners.
() and was incubated by PayPal.