4 top neobanks in India innovating in the banking space
By Edil Corneille
The COVID-19 pandemic has accelerated digital acceptance among customers for their banking requirements as they are wary of visiting bank branches with social distancing being the current norm. Neobanks, also called smartbanks and challenger banks, are digital-only banks with no physical bank branches. These banks have been presenting an alternative banking option to other traditional financial institution incumbents.
Neobanks do not face impediments such as legacy technology and outdated processes which are generally the challenges of financial institutions. These smartbanks are here to save the day from bloated incumbents who may have taken their customers for granted for way too long. Below are some of the top digital-only banks in India for individuals as well as businesses that are here to stay and transform the banking space.
InstantPay delivers full stack banking services to individuals and businesses of all sizes. The bank is said to process a million of transactions daily. With personal, business and inclusive banking solutions, InstantPay offers instant activation, money tracking and cash deposit features. The neobank has provisions of round the clock customer support, 365 days a year.
InstantPay can be used on the web and mobile. Businesses can integrate InstantPay’s API with their business applications or accounting systems. Its API banking platform is a super scalable cloud platform that auto-scales from zero to a million transactions in a single day. Businesses can play around and safely validate code with a sandbox mode before hitting the production environment.
This challenger bank’s Indian banking partners are ICICI Bank, Axis Bank, IndusInd Bank and Yes Bank. Individuals can open a digital account with InstantPay which is a good alternative to wallets and traditional bank accounts.
Startups and SME businesses can open a Smart Bank Account. Large enterprises can avail scalable and cost-effective solutions offered by InstantPay. The InstantPay Digi Kendra service offers basic banking, insurance, and travel booking facilities, among others.
Since its inception in 2015, Niyo caters to the needs of over a million customers across blue-collared sectors and to Indians that travel globally. At conception, the neobank targeted salaried employees and created solutions to help them get the most out of their salaries. Presently, Niyo helps users spend smartly and safely overseas.
Users can pay bills, transfer funds, make online purchases, access ATMs anywhere in the world, and track their spending habits, among others, which is supported by the bank’s digital platform. With a team strength of over 800, the Niyo team comprises of bankers, young technocrats, and individuals that bring in deep domain expertise.
The Niyo IDFC First bank is an account, an app and a card. The bank offers a host of features like interest rate provided on a savings account, zero per cent commission on mutual funds investments and zero per cent on forex.
In May, the neobank announced its ‘Niyo Pathshala’ initiative for India’s labour force to provide financial literacy. As part of the digital initiative, the company is educating individuals on the benefits and features of branchless banking.
Bengaluru-based Open began its FinTech journey in May 2017. Open is a neobank that offers small businesses and startups an online bank account and a credit card that combines banking, payments and accounting in a single place. As a neobank for businesses, Open solves the pain points business owners go through with the current banking system.
By signing up on Open, businesses can get an online bank account plus a business credit card and a bank account to start collecting payments within two minutes. This account enables SMEs to start collecting payments instantly without any limit on the collection. Invoices can be generated and payment links to customers can be sent.
Open’s payment gateway API can be integrated with the website of businesses where customers can pay during the checkout process. E-commerce platforms can integrate Open’s plugins to their websites for payment collection.
In June 2019, the neobank raised $30 million in its Series B round from Tiger Global, Tanglin Venture Partners, 3one4 Capital, Speedinvest & AngelList Syndicate.
RazorpayX is the neobanking platform of India’s newest unicorn Razorpay. The neobank has served over 10,000 businesses – processing their payroll through Opfin, paying for expenses through Corporate Card, and paying the vendors of businesses in real-time, disbursing billions of dollars through the underlying payouts layer.
Fully-functional current accounts on RazorpayX can be opened by customers and operated. RazorpayX Current Accounts come with standard banking features such as cheque book, debit card, and account statements. The platform has capabilities such as API banking, approvals workflow, and insightful reports.
With RazorpayX, e-commerce businesses can make instant refunds to credit cards, bank accounts and UPI ID. Also, businesses can automate the refund process by creating refund requests through API or the Dashboard.
RazorpayX automates refunds of Cash on Delivery (CoD) orders with Payout Links. Payout Links helps automate the entire process of making a refund to a customer within minutes.