Indian bank-in-a-box service provider YAP wants to become AWS of banking industry

By Priyanka Pani

June 10, 2020

At a time, when the COVID19 pandemic is forcing businesses to either pivot or re-look into their strategies, this Indian FinTech is expecting a 1.5x growth in revenues with healthy margins. The company had clocked $3.5 million in revenues last fiscal ending March 2020 (FY 21) and was expecting to grow three-folds by March next year ( FY 22) but the economic crisis triggered by the pandemic has led to slower growth. However, the crisis has opened up a plethora of opportunities for YAP, a Chennai-based neo-bank.

YAP’s bank-in-a-box (BaaS) model empowers new financial technology players with their go-to-market strategy, helps banks, and financial institutions to connect and roll out their own branded products and offers end-to-end program management services over a bundle of APIs (application program interface). It also works with several small businesses to leverage data and create and develop better products.

Started in 2015, the company was bootstrapped till about early this year when it raised around $1 million in angel funding. Soon after in April, amidst the COVID-led lockdown in India, the company raised around $4.5 million funding in Series A round led by Singapore-based venture capital firm BEENEXT. 8i Ventures Fund, The DMI Group via its AIF vehicle The Sparkle Fund, Better Capital, and angel investors such as Kunal Shah of Cred, Alok Mittal, CEO, Indifi, Ashneer Grover, CEO, BharatPe, Amrish Rau, CEO, PineLabs, Jitendra Gupta, founder, Jupiter and Abhishant Pant, founder, FinTech Meetup also participated in the round.

Talking to IBS Intelligence, YAP’s co-founder and CTO, Prabhu Rangarajan said that the company never wanted to become a neo-bank but have a neo-strategy for all other banks, including neo-banks by enabling and empowering the existing players.

“We started with building some QR-based solution in 2015 and then by 2016, India witnessed demonetization following which the whole market dynamics changed. Our QR-based product picked up. Since digital payments started picking up, we thought of solving problems plaguing the card segment that was running on decade-old technology. We made it seamless and work faster,” Rangarajan added.

He further added that the company has created a plug-and-play kind of infrastructure that can be used by several banks and financial institutions easily in a cost-effective manner. Citing how AWS (Amazon Web Services) has turned into the go-to player for all kinds of cloud hosting services, YAP has the potential to solve a similar problem for the banking industry.

The company is building its technology and offering enhanced API products to FinTechs which are focusing on enabling access to credit, corporate banking solutions, cross border payments, and providing neo-banking solutions.

“We are connected to several banks and are accelerating the paradigm shift in creating small packets of financial services by new cohorts of distribution, leading to lowering costs, enhancing access, and better value proposition to end consumers,” Rangarajan said adding that it has partnered with 15 active banks and carrying out over 200 active engagements with various kinds of banks and other businesses.

Rangarajan says that what demonetization did to the digital payments industry in the country, the COVID 19 will further it by multiple times. The start-up has its own digital payment program solutions for the Indian market. Besides, the company has active programs running in Philippines, Bangladesh, Nepal, Indonesia, and GCC region.

YAP over a period of time with its innovation and Technological solution has supported several fintech start-ups and Banks to operate their digital payments in a very efficient manner. Their solutions are respected not only in India but across Asia. There are many well-known Tech companies that rely on YAP‘s payment solutions.

In India, the focus would largely remain on digital payments. According to Rangarajan, the card transactions on offline retail has decreased while the share is increasing from the online segment. “50% of the card volumes were down in March but it is expected that the card volumes would return to the February levels in the next two-three months.”

June 10, 2020