<img src="https://m2p-website-file.s3.ap-south-1.amazonaws.com/m2p-website-file/marketing-cms/m2p-blog/2022/06/Main-Banner-Better-Half-2000-x-1000.webp" alt="M2P Fintech" title="" id="7jtekie6y" width="100%" height="253">Better Half means SO MUCH to me. In my previous role in hiring, I always wondered why it was difficult to resume one’s career after a break. After all, knowledge and experience doesn’t diminish right?M2P’s Better Half Program not only asks this very question but also backs it up. When I came across the Better Half program, I hovered over the link for a while with so many questions flashing through my mind. Isn’t 11 years too much of a break? Will I find the right role? Will I have to compromise?It was a while since I had a CV done so I just filled in the online form and hit ‘Submit’ After a few days, I was sidetracked with moving home from one state to another when I got a call from <a class="link" href="https://m2pfintech.com/">M2P</a>!What struck me straight off the bat was that this did not feel like an interview. It was more like a friendly discussion that set my mind at ease. One thing led to another and I progressed to further discussions with the larger team. Before I could realize it, I was an M2Peer, with a configured laptop and mails rolling in (Just like how it was)Today, as I head to the office with my laptop bag slung over my shoulder (and a packed lunch of course!) I feel at home after more than a decade. I understand my responsibilities, and where I fit in. It feels like I’m picking up where I left off — Not an easy thing to do in today’s world. I’m grateful to my team members and the People Success team for playing a massive role in this. I’m eager to learn and grow. Every day.<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.

Meet Rajashree — M2P’s first Better Half Talent

<img src="https://m2p-website-file.s3.ap-south-1.amazonaws.com/m2p-website-file/marketing-cms/m2p-blog/2022/06/Star-of-the-Month-Rajesh-Word-Press.webp" alt="M2P Fintech" title="" width="100%" height="317">May is not just mother nature’s time to turn up the heat. It’s when Rajesh, our operations manager puts too many irons in the fire. But that didn’t stop him from taking time off and having a candid chat with us.Continue reading to uncover Rajesh’s multifarious sides from being a fitness freak to a melomaniac. One thing that stands out is how he is an optimistic multitasker.1. How do you usually start your day?I start my mornings on a positive note. It doesn’t matter what the day may have in store for me. I believe that if you wake up with a chill and calm mindset, you will be ready to rule the day.Wonder how I maintain my cool?The secret is yoga and meditation. They soothe my nerves and sharpen my mind.2. What are your main responsibilities as Operations Manager?The Operations Team at M2P works in full-on active mode round the clock. In fact, we are in a never-ending race with the clock.Every day starts afresh with a new to-do list. We don’t carry forward any unfinished business to the next day. This reduces work pressure as we complete our daily tasks on time.Now I feel my adrenaline pumping... HAHAHA!Apart from operations tasks, my major responsibility is to train fellow M2Peers in my team. I push them to do their best and monitor their reports. As a team, our daily achievement happens when we complete each day’s task without any escalation.3. How have you grown through the years as an M2Peer?I’ve been working at M2P for four years now. Even though my previous company is from the same field, the M2P system and nature of work are completely new. I would definitely say, I am blessed with a chance to learn new things here even though I am an experienced professional. I would like to grab this opportunity to thank our co-founder&nbsp;<a class="link au js" href="https://www.linkedin.com/in/prabhu-rangarajan/" target="_blank" rel="noopener ugc nofollow">Prabhu</a>&nbsp;and&nbsp;<a class="link au js" href="https://www.linkedin.com/in/vivek-prashanth-9120352a/" target="_blank" rel="noopener ugc nofollow">Vivek Prashanth</a>, Vice President (Operations) for their constant guidance and support from the beginning.M2P is a great place to gain good knowledge. I’ve also learned work etiquette and conversing skills.4. Is there a quote/saying that motivates you?“Believe in yourself and you will be unstoppable.”This line is such a boost for me to face new challenges every day. As mentioned earlier, unstoppable like a clock! 😀5. What type of student were you during your college/ school days?Undoubtedly, a notorious backbencher. And I am proud of it! 😀I spent most of the time in the ground playing volleyball and kabaddi. I still remember my first win in a volleyball match when I was 12 years old. With good training, I became a state volleyball player and represented Anna University in Kabaddi too. To your surprise, I am still practicing volleyball and kabaddi during the weekends.Just throwing a tip your way — “Keep fitness as a habit, no matter what.”6. What inspires you the most about M2P?The optimistic way in which M2P approaches challenges is truly inspiring. Every project is a new challenge and new learning here. No projects are dropped. And efforts are taken to complete them successfully no matter what.7. What’s your idea of a perfect day?A perfect day — a day without any escalation! Sounds already perfect, right?8. What do you do when you get some leisure time?Yuvan music will be on full blast. It pumps up my energy.And, hey I love to spend happy times with my friends and indulge in physical activities.9. Anything else you want to share about M2P?One word strikes my mind immediately, PERFECT.Keep inspiring, M2P. Looking forward to growing together in this long and exciting ride.<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.

Meet M2P’s Operations Manager

<img src="https://m2p-website-file.s3.ap-south-1.amazonaws.com/m2p-website-file/marketing-cms/m2p-blog/2022/06/Artboard-1-1.webp" alt="M2P Fintech" title="" width="100%" height="253">Stumped with KYC implementation?You are not alone. Several Financial Institutions (FIs) are working out their way through KYC puzzle to oust financial crimes and ensure compliance.Now, KYC is critical for any financial institution. It is indeed the first step when you choose to use a financial product or service in India.So, what is KYC?For starters, Know Your Customer (KYC) is the process to confirm a customer’s identity while onboarding a financial institution. RBI has ensured the implementation of a robust KYC system to helps financial institutions understand their customers better while ensuring their legitimacy. Click&nbsp;<a class="link au lg" href="https://m2pfintech.com/blog/know-your-customer-kyc-the-need-for-authentication/" rel="noopener">here</a>&nbsp;to know more about KYC in India.<h2 class="heading-node" id="453f" style="text-align: justify">Digital Avatar</h2>With the rise in paperless onboarding, KYC has taken a digital avatar. The&nbsp;<a class="link" href="https://m2pfintech.com/blog/know-your-customer-kyc-the-need-for-authentication/">digital KYC&nbsp;</a>saves a lot of time and effort involved in the process and helps tackle onboarding issues in a quick and seamless manner. It also prevents money launderers/fraudsters from masking their true identities and manipulating stolen information for their personal gains.Though the benefits of the process are immense, implementing digital KYC is not simple. Financial institutions such as banks and fintechs need to overcome significant challenges in deployment.<h2 class="heading-node" id="22ab" style="text-align: justify">Key KYC Challenges</h2>The upswing in the recent money laundering, fraud, and tax evasion cases has brought KYC into a new light. Accordingly, RBI has enforced strict laws concerning non-compliance with the KYC directives. However, financial institutions are grappling to keep up with the legal framework for KYC compliance.Experience Vs ComplianceRight from onboarding and screening to monitoring customer data, they face complex challenges every step of the way. This puts banks and fintechs in a tricky spot because customers seek seamless experience and quick onboarding with minimal documentation, and FIs cannot compromise on the verification process. Ensuring compliance without compromising customer experience is a huge challenge for FIs.Connected Risk IdentificationKYC involves extensive paperwork and supporting documents. Often, customer data files are incomplete or lack critical pieces of information or documentation. This heightens the risk of fraud and lays down a cosmic emphasis on monitoring and screening individuals and entities against Politically Exposed Persons (PEPs), watchlists/sanctions, and other regulatory and law enforcement lists.In addition, the rise of new criminal typologies has inflicted the compliance team to assess an overarching list of compliance and fraud risks. This calls for an all-inclusive, connected risk identification approach for analyzing financial fraud activities, money laundering, and other offenses.Volatile Risk AppetiteFinancial institutions and customers exhibit dynamic risk appetite. For example, a customer might have a different risk profile or status during onboarding and drift into another risk profile over time. On the other hand, KYC regulations are updated periodically, which implies the regulations, risk indicators, and other indices used to determine the risk tolerance score will vary. Hence the outdated records become an impending hindrance to the customer due diligence process. The repercussions of such instances are far-reaching as there is only a fine line between a medium and high-risk customer but a momentous difference in due diligence efforts.Lack of TransparencyOne of the biggest challenges of KYC is the retrieval of corporate ownership documents from registries located across the globe. Successful KYC depends on several sources such as annual reports, financial statements, stock exchange information, third-party data, and regulator websites. However, due to the lack of transparency, KYC analysts bank on limited information on the directors, stakeholders, controllers, and beneficiaries. Additionally, there is a significant cost associated with accessing specific vital documents while others are available for free.<h2 class="heading-node" id="6f0c" style="text-align: justify">How Financial Institutions can crack KYC challenges</h2>Here’s our take on how financial institutions can tackle KYC challenges effectively.<ul class="list-node" id="bakrf8m7x"><li>Integrate with credit bureaus for seamless customer verification</li><li>Use data deduplication techniques to recognize and eliminate identical records. This is also known as Dedupe check-in.</li><li>Validate customer data against the regulation records to identify unscrupulous individuals/organizations prohibited from making business transactions.</li><li>Conduct rational checks to keep a tab on anonymous bank accounts or those opened with fictitious names.</li><li>Facilitate video KYC for quick onboarding and exceptional customer experience.</li><li>Use algorithms and techniques to categorize customers as low, medium, and high-risk categories, based on the assessment and risk perception.</li><li>Take necessary precautions with customers who come under high-risk segment.</li><li>Monitor customer transactions in a routine manner to keep an eye on any suspicious activities.</li><li>Partner with authorized 3rd party service providers for quick e-KYC checks and video KYC onboarding.</li></ul><h2 class="heading-node" id="4cad" style="text-align: justify">Is third-party KYC partnership a viable approach?</h2>Although KYC is kept in-house traditionally, experts believe it is time to team up with third-party KYC-service providers.Why?First off, it is cost and time effective.Secondly, for high efficiency and accuracy.From dedicated subject matter expertise to cutting-edge technology access to faster go-to-market speed, third-party partners can provide all-inclusive services within an optimum budget.These partnerships can enable FIs to invest more effort and time in their core business, rather than focusing on the KYC procedures. Financial institutions that keep KYC in-house could end up with extensive duplication and redundancy across businesses and markets.On the other hand, third-party partners employ devoted professionals to carry out KYC procedures and documentation. This leaves no room for error, ensuring a smoother onboarding process and regulatory compliance, without compromising customer experience.With that being said, third-party service providers are the gateway to exceptional customer experience and successful KYC solutions. They enable financial organizations to improve speed and operational performance, minimize operational risks and boost efficiency by consolidating and centralizing functions.Financial institutions should take apposite measures to understand the complexities that could arise from digital transformation. They must embrace strategic partnerships to develop pioneering approaches to assess customer risks and monitor transactions.So, do you need solutions to any particular KYC issue? Or want to know more about implementing KYC?Write to us at&nbsp;<a class="link au lg" 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.

Crack the KYC Jigsaw. Ease Onboarding Compliance

Central Bank Digital Currency (CBDC) 101- A Primer

<img src="https://m2p-website-file.s3.ap-south-1.amazonaws.com/m2p-website-file/marketing-cms/m2p-blog/2022/05/Hardware-Security-Modules-01-1.webp" alt="M2P Fintech" title="" width="100%" height="284">Security compliance is non-negotiable. No matter what.Irrespective of whether you are into digital banking, card issuance, or <a class="link" href="https://m2pfintech.com/blog/digital-lending-open-credit-enablement-network/">lending</a>, you must remember that your customer data, credentials, and documents are vulnerable to security hazards. Without strong <a class="link" href="https://m2pfintech.com/blog/why-is-risk-based-authentication-rba-critical-for-banks/">risk management</a> measures, you may risk exposing yourself and your customers to data breaches, cyber-attacks, and exorbitant fines from regulatory authorities. This is where cryptography, the science of protecting sensitive data saves the day, by delivering the highest levels of data protection.<h2 class="heading-node" id="q22mmnm3s">Cryptographic Keys</h2>Cryptography uses digital keys to encrypt and decrypt data with required levels of complexity for secure access and compliant operations.So, what is a cryptographic key?A cryptographic key refers to a string of characters in an encryption algorithm that helps randomly create the desired data. This key helps convert a plain text to ciphertext and vice-versa whenever data encryption and decryption happens. Efforts must ensure that only the authorized user has access to the key. The encrypted data must be stored securely for decryption without any discrepancy.<h2 class="heading-node" id="5d58">Lifecycle of a Cryptographic Key</h2> The following process comprises the cryptographic key lifecycle.<img src="https://m2p-website-file.s3.ap-south-1.amazonaws.com/m2p-website-file/marketing-cms/m2p-blog/2022/05/Hardware-Security-Modules-02.webp" alt="M2P Fintech" title="" width="100%" height="285">Provisioning -The provisioning process generates keys using a key management system, an hardware security module (HSM), or a Trusted Third Party (TTP) through random number generators. The keys should be strong enough to provide the necessary protection to secure the data.Backup and storage-&nbsp;This is a critical step where a secure backup copy of the key is made. It should be available for future retrieval if the key undergoes any failures. Such backup keys are often stored in external media or other backup solutions. All private keys must be encrypted before being stored.Deployment-&nbsp;The&nbsp;new key is installed electronically or manually into a secure cryptographic devices such as Hardware Security Module.Management, Monitoring, and Rotation-&nbsp;Here, the keys are often controlled and monitored with respect to the industry standards and policies. The encryption key management system handles key rotation and deploys new keys as and when existing keys expire.Archiving-&nbsp;The keys that are no longer in operation are stored here for an extended period. They might be required again in the future for associated data retrieval. The key, when archived, is encrypted for additional security.Disposal-&nbsp;The keys are permanently destroyed here, when they are no longer needed. Before destruction, the key is analyzed and sometimes recovery is processes if necessary. A key can be removed from its operation using key destruction, key deletion, or key termination.Generating, securing, and managing cryptographic keys can be multifaceted and complex, requiring support from information security and development teams.So, how can you create, monitor, store, and optimally use cryptographic keys?Simple. Install HSM.<h2 class="heading-node" id="a893">So, what is Hardware Security Module (HSM)?</h2>Hardware Security Module (HSM) is a device that provides a wired security solution for the wireless world. It is a dedicated cryptographic processor that offers a secure, tamper-resistant environment specifically designed to protect identities, devices, and cryptographic key data throughout its lifecycle.HSM protects any data in use, transit, and rest, for encryption, decryption, authentication, and key management. In toto, it serves as a ‘trust anchor’ to ensure compliance, simplify audits, generate, and store keys.<h2 class="heading-node" id="6380">Types of HSMs</h2>HSMs can be broadly classified (as listed below) based on the levels of functionality and compliance with different security standards.· General Purpose (GP) HSM· Transaction HSMGeneral Purpose (GP) HSMWherever there is sensitive data, and the need for encryption prevails, GP HSM is indispensable. It generates powerful cryptographic commands that can safely encrypt and decrypt information for any application.Sample use cases for general purpose HSM are:· Symmetric key management for database encryption· Asymmetric keys management for digital signature creation· Certificates to support Public Key Infrastructure (PKI)· Crypto walletsGP HSM supports compliance with the following standards.· <a class="link" href="https://m2pfintech.com/blog/pci-dss-a-quick-guide-to-its-levels/">PCI DSS (Payment Card Industry Data Security Standard)</a>· <a class="link" href="https://m2pfintech.com/blog/prevent-cnp-frauds-with-pci-3ds/">PCI 3DS (Payment Card Industry 3-Domain Secure)</a>· <a class="link" href="https://m2pfintech.com/blog/gdpr-in-a-nutshell/">GDPR (General Data Protection Regulation)</a>· FISMA (Federal Information Security Management Act)· FedRAMP (Federal Risk and Authorization Management Program)· ICAM (Identity, Credential, and Access Management)· eIDAS (Electronic Identification and Trust Services)Transaction HSMAlso known as payments HSM, this security module has advanced security features compared to the general-purpose counterpart. Transaction HSM enforces dual control using payment-specific cryptographic commands to ensure sensitive information never leaves the HSM. The PCI SSC compliance mandates the use of payments HSM for the use cases below.· When payment transaction processing happens, this supports card, user and cryptogram validation· Helps in processing EMV transactions· Generates key and injects it· Helps facilitate highest security when keys are shared with third parties· Used for generating, managing, and validating PIN· Enables electronic funds interchange, Electronic funds transfer at point of sale (EFTPOS), and ATM transactions· For payment cards and mobile applications, it helps in generation of payment credentials· Enables point-to-point encryption (P2PE), key management and secure data decryption· With payment HSM, cash-card reloading is made hassle-free· Facilitates PIN block translation when network switch of POS and ATM transaction takes placeTransaction HSM supports compliance with the following standards:· PIN (Personal Identification Number) Security· P2PE (Point-to-Point Encryption)· <a class="link" href="https://m2pfintech.com/blog/3d-secure-your-barrier-against-cyber-attacks/">3DS (ACS- Access Control Server &amp; DS- Directory Server)</a>· Card Production· TSP (Token Service Provider)· SPoC (Software-Based PIN Entry on COTS)· CPoC (Contactless Payments on COTS)<h2 class="heading-node" id="5938">Are HSMs trustworthy?</h2>Absolutely!HSMs have high accuracy and are implanted in a secure and sealed environment. This acts as the trust factor for every organization to implement. As HSMs work on a dedicated firewall, they never get exposed to the public internet and thus ensure maximum security. The hardware is designed to give a high input with minimal resource usage. This is how cryptographic keys and data are protected optimally.<h2 class="heading-node" id="47c2">High on protection</h2>HSMs are commonly used to protect identities, transactions, and applications. They protect the cryptographic keys by creating a trustable environment in which processes such as encryption, decryption, and authentication are equipped and secured. They follow industry regulations and standards such as <a class="link" href="https://m2pfintech.com/blog/pci-dss-a-quick-guide-to-its-levels/">PCI DSS</a>, FIPS 140–2, European Union’s General Data Protection Regulation, Domain Name System Security Extensions, and Common Criteria.<h2 class="heading-node" id="6534">How HSM enables maximum security?</h2>HSMs offer the ultimate protection for all the critical functions involved in payment applications and databases. Hardware Security Modules come with many features that cannot be overlooked, as they help organizations maintain a secure transaction infrastructure.· HSMs are equipped with a secure design that meets all the security standards and adheres to the Federal Information Processing Standardization (FIPS) 140–2.· The operating system in HSM is always security-focused.· The higher levels of trust and authentication ensure the maximum security of the sensitive data and cryptographic keys.· Automated lifecycle tasks and protective mechanisms are quick and efficient.· The key is maintained only in the HSM, exempting the possibility of malicious attacks that might occur virtually.· HSMs enable application integration with the help of <a class="link" href="https://m2pfintech.com/blog/the-world-of-apis-how-they-power-fintech/">APIs.</a><h2 class="heading-node" id="6d7a">Versatility of HSMs</h2>Businesses should use HSMs to safeguard the sensitive information pried by countless threats they might encounter. In day-to-day applications, HSMs secure data generated across banks, websites, cryptocurrencies, smart meters, mobile payments, medical devices, PINs, identity cards, and digital documents.And the buck doesn’t stop here. HSM protects digital signing, ensures compliance, and helps in key generation and management. Wherever financial transactions happen, HSMs provide that additional layer of security. ­­­Today physical HSMs are transitioning to the cloud. Cloud HSM or HSM as a Service (HSMaaS) hosts encryption keys and cryptographic operations with FIPS 140–2 Level 3 certified modules.Want to know more about HSMs?Contact us at&nbsp;<a class="link" href="mailto:business@m2pfintech.com">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.

Cryptographic Keys and Hardware Security Modules - An Introduction

<img src="https://m2p-website-file.s3.ap-south-1.amazonaws.com/m2p-website-file/marketing-cms/m2p-blog/2022/04/banner1251-9.webp" alt="M2P Fintech" title="" id="dmf2k0y2z" width="100%" height="356">“Hey, buy your favorite designer shoes now. Pay later at your convenience.”Can anything be sweeter than these words?It’s sure to beat the sweet pleasure of biting into soft, creamy, warm waffles. Except, of course, you pay for them later too!Now don’t be lost. We’re not blabbing about a random retail marketing gimmick.We’re referring to the strategic, monumental Buy Now, Pay Later (BNPL) phenomenon that’s taking the world by storm.If you don’t know what BNPL is, here’s a starterBNPL is the hottest revolution in the world of credit payments. It gives consumers access to instant credit lines to pay for products they want at their leisure. BNPL fuels, not just food delivery and e-commerce today. It pervades the world of travel, fashion, education, insurance, and anything and everything that allows digital payments.In India alone, the BNPL market is estimated to grow at a CAGR of 24.2% from 2021 to 2028.<img src="https://miro.medium.com/max/700/1*Y7VyoSPYDYUWjKkF5dA7_g.jpeg" alt="Buy Now Pay Later Market Size in India" title="" width="100%" height="284">Did you know?Over 49% of consumers spend more when using BNPL service than they would on a credit card (Source: Cardify.ai, a consumer spending data firm).Yes, the Buy Now, Pay Later service stimulates people to checkout with fuller carts loaded with luxury products compared to other payment forms<h2 class="heading-node" id="4307">But why is BNPL so popular?</h2>Several tangible and intangible components contribute towards the immense allure of the BNPL phenomena. First, the proliferation of BNPL is more in online commerce than in-store ones due to changing customer behavior coupled with the impact of the pandemic.&nbsp;Second, it has also made businesses leverage this payment mode as a potent tool to entice customers to load their carts with impulsive purchases.<h3 class="heading-node" id="ecb4">1. Pandemic-driven online commerce</h3>The Covid-19 pandemic provided a significant boost to BNPL, as the restricted mobility accelerated online purchases. However, consumers had limited purchasing power, and the existing credit infrastructure did not support the demand and supply dynamics.This was precisely when BNPL emerged as a potent enabler helping lockdown consumers use instant credit to purchase food supplies, medical supplies, apparel, and services such as online courses, insurance, utility payments, housekeeping services, etc. The financial support BNPL provided consumers during the pandemic was unwavering and relentless. Thus people began purchasing only from businesses that provided BNPL payment options<h3 class="heading-node" id="8f8c">2. Instant gratification across demographics</h3>Over 50% of Gen Z and millennial consumers who are most tech-savvy amongst the consumer base indulge in the convenience, affordability, and speed that BNPL transactions offer over other forms of payments.Today’s youth have lower purchasing power, a volatile credit rating, and a whim to purchase anything and everything in an instant. BNPL gratifies its caprice by providing instant credit, convenient repayment plans, and soft credit checks that do not impact individual credit scores.But it does not mean that older consumers are not drawn by the Buy now pay later allure. On the contrary, the no interest rate feature and convenient duration to pay off the loan attract consumers across all demographics.<h3 class="heading-node" id="78bd">3. Convenient, affordable repayment plans</h3>Most BNPL providers enable consumers to repay the credit within 15 days without any interest. Or you can switch to easy EMIs with 2,4,6, or 12 months window or facilitate auto-debit from your bank account. You can also use the scan and pay option to pay in stores and use the BNPL UPI ID to go cashless anywhere, anytime<h3 class="heading-node" id="06f3">4. Easy KYC, no exorbitant charges</h3>With minimal eKYC, you can enjoy maximum credit based on your income. There are no complex interest calculations, service charges, compound interests, or hidden charges, unlike credit cards. All the payment terms are stated upfront before the payment.Also, there is no need for OTP verification, entering card details, recharging your wallet every time you need to make a payment.<h2 class="heading-node" id="l84nocbpw">Psychological factors that accelerate BNPL adoption</h2>Intrinsic psychological factors play a critical role in accelerating the growth of BNPL. Understanding the psychology behind BNPL helps businesses design product/service offerings according to customer behavior and preference, increasing customer experience, satisfaction, and conversion.<h3 class="heading-node" id="8d5c">The pain of paying</h3>Ever experienced the pleasure of a tranquil spa massage or a scrumptious plate of grilled lobster vanish right when you pay the bill with cash? Here’s why.<blockquote class="block-node" id="emxg5kizl">When people make purchases, they immediately experience the pain of paying.</blockquote><h3 class="heading-node" id="cb2e">Love-hate chemistry between spending and consumption</h3>No one can deny the peculiar love-hate chemistry between spending money and the pleasure of enjoying what you pay for.When payments get deferred, it triggers relief in the brain, allowing you to enjoy life at the moment. Using the Buy now pay later option instead of cash to pay for your dream product or service lets you enjoy the moment without worrying about the money left in your pocket.<h3 class="heading-node" id="88ae">Payment modes and their emotional impact</h3>Payment modes such as cash, credit cards, BNPL, and debit cards leave their own psychological ‘pain of payment’ impact on the consumer.Dr.Carey Morewedge, Asst.Professor in Carnegie Mellon explains the pain of paying with a simple formula.Cost of your item/pool of resources (cash/BNPL/others) = pain of payingThe larger your resource, the greater will be the inclination to make costlier purchases. For example, when you are shopping using BNPL, you feel like spending a small fraction of money from a large reserve with no immediate deadline. So the pain of paying becomes dramatically less in BNPL.Whereas drawing a few currency notes out of your pocket seems like you are consuming a large portion of the available fund. Thus the pain of paying in immediate cash payment is more significant.<h2 class="heading-node" id="3bb3">How can businesses make the most of BNPL?</h2>Adopting BNPL gives your business instant access to an enormous customer base who would otherwise refrain from spending due to lack of credit availability, exorbitant credit card interest rates, and credit rating depreciation. As BNPL removes all purchase barriers, you can immediately see a rapid increase in sales and revenue.Merchants and businesses can reap huge profits as BNPL drive higher average order values (AOV) and conversion rates and lower cart abandonment and customer acquisition costs. In addition, now that BNPL reduces the pain of instant payments, it triggers repeated purchases, which is a huge deal for businesses that strive for increased sales, customer satisfaction, and loyalty.However, trying to build your BNPL infrastructure in-house will exert a lot of strain on your bandwidth and productivity. Partnering with reputed API providers will help you deploy efficient plug-and-play BNPL systems at an incredible speed. API service providers empower businesses to go to market within days with seamless integrations and in-built analytics solutions.<h2 class="heading-node" id="b997">Conclusion</h2>Like everything else in life, BNPL is a double-edged sword too. Though it fosters a win-win situation for both consumers and businesses, this short-term credit instrument presents a few risk factors. For example, consumers can run the risk of debts if they indulge in too much impulsive shopping. And e-commerce aggregator businesses may suffer from merchant fraud or credit risks if KYC and regulatory compliances are not adhered to.Want to know more about BNPL? Write to us at business@m2pfintech.com.<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.

Factors and Psychology Behind the Great BNPL Allure

API -The Power that Drives New-Age Banking Ecosystems

<img src="https://m2p-website-file.s3.ap-south-1.amazonaws.com/m2p-website-file/marketing-cms/m2p-blog/2022/04/banner1251-2.webp" alt="M2P Fintech" title="" width="100%" height="447">Blockchain is crossing its chasm and it might be stumbling its way towards knocking on the doors of many other industries. Still, the scope of its application and ideas challenges the present technologies in the field. This technology, still young and fresh, continually offers its beneficiaries data transparency, security, and quicker transactions.Awaiting to join hands with fintech <a class="link" href="https://m2pfintech.com/blog/the-world-of-apis-how-they-power-fintech/">APIs</a> blockchain promises, to accelerate numerous applications to the front row. Unfortunately, the innovators and investors are not on the same page yet on bringing the dreams of <a class="link" href="https://m2pfintech.com/blog/fintech-a-catalyst-for-financial-inclusion/">fintech</a> operations into practice.Still, one cannot overlook the potential of blockchain technology because bitcoin efficacy is proved through the decentralized protocol algorithm of Blockchain.The use cases of Blockchain in Fintech are discussed below along with the deterrents of the operational practices too.<h2 class="heading-node" id="ea1b" style="text-align: justify">What is Blockchain?</h2>Blockchain is a database: digital, decentralized database. A series of blocks containing transaction data, a hash identity, and node details are connected to form a chain. They are linked to their previous block with immutable characteristics. It also facilitates the process of recording, managing, and tracking assets. Assets can be tangible and intangible, and virtually anything of value can be traded on a blockchain network. It reduces risk and costs for all the parties involved.The reason why Blockchain is now on an accelerated trend is that it is fast. As a business runs on information, the quicker it is received. The more accurate the information is, the faster the business reaps results. The security aspect of Blockchain is well coveted as it can be accessed by individuals who have the key. It offers a single view where even a single modification will be known to all the members.<h2 class="heading-node" id="3ca3" style="text-align: justify">How does Blockchain work?</h2>Blockchain records validate and store the data in its database. So, it has the privilege to validate a transaction. However, it does not simply hold the data but also every nuance that happened in the transaction.<ol class="list-node" id="khl9t5q91"><li>User requests for a transaction of any type involved with or without contracts, cryptocurrency, information, or any other records.</li><li>Now the requested information is sent to various nodes of the P2P network (the people involved in the transaction) for validation.</li><li>The validation of the nodes and the user status is recorded and updated by the algorithms.</li><li>Once the transaction is complete, a new block is added with the recorded data to the previous block .</li></ol>Each block contains the following information<ul class="list-node" id="30nibfo2u"><li>A Hash pointer (link to the previous block)</li><li>A timestamp</li><li>Transaction data</li></ul><img src="https://miro.medium.com/max/1400/1*ymase2KIJyghd5SKYaPm2Q.png" alt="M2P Fintech" title="" width="100%" height="358"><h2 class="heading-node" id="a369" style="text-align: justify">What gives Blockchain its power?</h2>Blockchain destroys cybercrime attacks with its decentralized ledger. The conventional centralized ledger in <a class="link" href="https://m2pfintech.com/blog/fintech-a-catalyst-for-financial-inclusion/">Fintech</a> opens pathways to fraudulent activities despite its easy access — vulnerable to&nbsp;cybercrimes. In the case of the Blockchain, the distributed P2P network allows more than one node (device) to validate, authenticate and approve transactions.Moreover, the nodes cannot alter any transaction data without their peer nodes.A decentralized ledger is the core concept of Blockchain technology that makes it completely superior. This operational protocol helps holds numerous features such as embezzlement in check.Blockchain characteristics are flexible enough to bend at few places and remain immutable at other occurrences. Moreover, it comes with complete security compliance, avoids fraud, and is scalable with any form of transaction.Reliability: It removes the double records because it certifies and identifies the transaction of each party.Unchangeable transactions: You cannot edit or remove the transactions but only add. The chronological ordering stores each block with a timestamp.Reduces Frauds: The P2P network validates the transaction request and reduces the chance of embezzlement.Collaboration: Removes the third party from the transaction. The dream of digital banks, neo banks complying with all the strict regulations is possible with blockchain technology.Transparency: Transaction details are public to everyone, including changes (parties involved in the transaction). It solves the credibility and trust challenges of Fintech.<h2 class="heading-node" id="5838" style="text-align: justify">How Blockchain is transforming Fintech?</h2>Blockchain is silently proving its invincibility in the fintech industry. However, underpinning Blockchain is to the transformative growth of Fintech; it is abstained by a large crowd due to operational reality.Ripple connect and Ethereum has found their ways into early adopters door but could not cross the chasm cycle yet. Effectively, the technology contributes to reliable finance systems through robust algorithms: distributed technology in record keeping and transactions with the decentralized protocol eliminating thousands of paperwork.The infant technology is fruitful for Fintech, especially in shaping retail banking services.<ol class="list-node" id="hehe9ly9f"><li>RTP solutions: Sending money will only take a matter of minutes. Implementing RTP has been risky with the traditional banking process, but Blockchain accelerates the implementation process. As a result, irrespective of any app used for money transfer, transactions will happen securely.</li><li><a class="link" href="https://m2pfintech.com/blog/cross-border-payments-a-swift-money-flow-across-borders/">Cross-border Payments:</a>&nbsp;While setting up to collect or fund transfer across other countries, the limitations make the process slow, tiresome and challenging. With Blockchain, the restrictions can be melted. In addition, it is an entirely internet-based operation which removes the need for an additional setup cost.</li><li>Smart Contracts &amp; Recurring Payments:&nbsp;For SaaS &amp; B2B industries, smart contracts will help secure credible transactions that can be released based on a completed action, event, or conditions. It is useful when the goods are delivered, and the funds are released in the logistics.</li></ol><h2 class="heading-node" id="3afc" style="text-align: justify">Blockchain use case scenario in RTP solutions &amp; cross-border payments</h2>From 2017, there are speculations of the use of Blockchain in the fintech field, as of now, no direct confirmation apart from Ripple and Ethereum using their Blockchain in real-time settlements and <a class="link" href="https://m2pfintech.com/blog/cross-border-payments-a-swift-money-flow-across-borders/">cross-border payments</a> — a real challenge in retail banking.RTP &amp; <a class="link" href="https://m2pfintech.com/blog/forex-cards-international-travel-made-effortless/">international payment</a> processing solutions are slow because of the conjecture of the third parties in stock markets, healthcare, and cryptocurrency. However, blockchain usage can lift the barrier in a few cases if the compliance has been favorable. Thus, it may not remove the third party entirely but speed up the process.In cross-border and RTP solutions, the payment systems still need a third party till the regulations are changed. But with cryptocurrency, the need for the traditional infrastructure banking setup can be overridden. First, the currency of the payer can be converted to bitcoin or any other fiat currencies. Then the payment can be approved by the distributed electronic ledger protocol.Then the receiver will get the settlement in the original currency. It involves an additional step of converting the currency to crypto and then back to the original format. Of course, it increases a few complications. Still, given the present tech innovations in the market, this is an easy pie.A group of consortium banks in Japan is currently running on this tech innovation method to collect international and RTP domestic payments.<h2 class="heading-node" id="0b95" style="text-align: justify">Fintech Blockchain Use cases</h2><h3 class="heading-node" id="c07b" style="text-align: justify">Smart contracts</h3>An exciting branch of Blockchain is the smart contract. The capability of smart contracts is transformative enough to disrupt the automation process in the future. Adding a bit of AI or edge intelligence, smart contracts will be more intelligent: they can trigger AI decisions.In 2016, financial consortium R3 and its member banks completed trade finance prototypes that used smart contracts to process factoring transactions and letters of credit. Smart contracts have high leverage on places where escrow is high. When a synchronized chain of actions happens upon if/ else statements drawn by both parties, it is a win-win situation.<h3 class="heading-node" id="6c71" style="text-align: justify">KYC</h3><a class="link" href="https://m2pfintech.com/blog/know-your-customer-kyc-the-need-for-authentication/">Know Your Customer</a> (KYC) is a regulation now, and it is mandatory for consumers to enjoy frictionless payment advancements. But <a class="link" href="https://m2pfintech.com/blog/crack-the-kyc-jigsaw-ease-onboarding-compliance/">overcoming KYC challenges</a>, and establishing the identity of the customer without barging into their privacy is complex. The transparency of Blockchain enables identity verification without disclosing the true identity. It sounds like beating around the bush, but the protocol allows to establish, verify and transact based on digital identities of all the counterfeits.<h3 class="heading-node" id="d839" style="text-align: justify">Escrow — freelance</h3>Freelance opportunities are booming everywhere, thanks to COVID; however, the escrow is high. For a platform like Upwork, satisfying both sides is a requirement without any compromise. The best way to solve these problems is through smart contracts. Transferring the deliverables based on effective agreed rules from both parties can enable a seamless functioning of the whole platform.<h3 class="heading-node" id="d2b7" style="text-align: justify">Recurring Payments</h3>In B2B, the payments usually take 3–4 days to complete, which is quite annoying nowadays. The middlemen in the process are co-dependent with the paperwork, which delays the sales cycle even further. Intelligent contracts can plunge in with the idea of its transparent agreement terms, making recurring payments every month or year easy. The contract triggers the next step of the action only if both the parties are convinced, so it gives complete control to the buyer and the sellerBlockchain is waiting for its massive scaling, and 2021 is the year for its spark plug. The industry is quite busy solving its problems with operational constraints. Yet, we have pretty a trend waiting to breach in soon, at least into the payment ecosystems under the fintech radar.To know more about blockchain, write to us at business@m2pfintech.com.<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.

Blockchain and Fintech-Use cases and Applications

<img src="https://m2p-website-file.s3.ap-south-1.amazonaws.com/m2p-website-file/marketing-cms/m2p-blog/2022/04/banner-1251-1.webp" alt="Account Aggregator" title="" id="9hxp4jacw" width="100%" height="661">Data is a gold mine that drives insights and efficiencies across industries. Gartner predicts that by 2023, companies that actively leverage shared data will outperform their peers in crucial metrics. With 180+ zettabytes of data estimated to be created by 2025, businesses across industries need to devise strategies to gain access to relevant consumer information. Such access will drive insight-driven decisions to boost revenue, <a class="link" href="https://m2pfintech.com/blog/why-is-risk-based-authentication-rba-critical-for-banks/">mitigate risks</a>, and reduce costs.<h2 class="heading-node" id="134f" style="text-align: justify">Consent-based digital access to data</h2>Account aggregators or financial data aggregators play a significant role in enabling data access to financial institutions, businesses, and individuals. Prioritizing fiduciary consumer relationships, account aggregators share digitally signed and encrypted data upon explicit consumer consent.<h2 class="heading-node" id="160d" style="text-align: justify">Financial data aggregation in India</h2>India launched its Account Aggregator (AA) network in September 2021, as the first step towards open banking. Built on the Data Empowerment and Protection Architecture (DEPA), the account aggregator framework is the world’s leading consensual data-sharing infrastructure.This digital data access structure serves as a substantial digital enablement initiative after the launch of public infrastructure for digital identification (Aadhaar) and <a class="link" href="https://m2pfintech.com/blog/the-rise-of-digital-payments-2/">digital payments</a> (UPI). Millions of customers can now digitally access and share their financial data in a compliant manner.<h2 class="heading-node" id="019c" style="text-align: justify">Potential to transform efficiencies</h2>The AA framework holds the potential to transform the efficiencies and profitability of financial institutions and businesses in India. Banks, fintechs, and NBFCs can use consumer data to widen target-base, personalize services, lower risks, enhance customer experience, and future-proof their product portfolio. Collecting, cleansing, and synthesizing pertinent data helps enhance insight-driven decisions and executions.Democratization of data access via account aggregator networks has brought in a win-win scenario for businesses, consumers, and <a class="link" href="https://m2pfintech.com/blog/digital-lending-open-credit-enablement-network/">new-age digital lenders</a> with advanced underwriting algorithms and a larger risk appetite. They have broken the data monopoly of digital and financial services firms by transferring data sharing power to individuals.<h2 class="heading-node" id="a06c" style="text-align: justify">So, who are account aggregators in India?</h2>Account aggregators are NBFC-AA licensed entities that are regulated by the RBI. Contrary to the name, they cannot ‘aggregate’ data. They only enable consensual data sharing and access between consumers and financial institutions in the network. Account aggregators cannot read or resell data. They can carry data from one financial institution to another based on individual consent and direction. Consumers also have the choice to revoke data already shared.<h2 class="heading-node" id="b934" style="text-align: justify">How account aggregation happens?</h2>Data gathering, collation, and dissemination are enabled through open <a class="link" href="https://m2pfintech.com/blog/api-the-power-that-drives-new-age-banking-ecosystems/">Application Programming Interface (API</a>) connections.<h2 class="heading-node" id="e756" style="text-align: justify">Do account aggregators benefit individuals?</h2>The answer is yes.Account aggregators help consumers get rid of laborious paperwork, effort, and security issues involved in notarizing, stamping, signing and scanning physical copies of bank statements. Users need not have to expose themselves to vulnerabilities of sharing login credentials and financial history to a third party.With mobile-based digital data access and sharing process, account aggregators eliminate the conventional hassles of data access and sharing. People across demographics will get access to experiential, preference-based financial services and products. While the affluent will experience value through customized investment and insurance options, the popular masses will enjoy greater inclusiveness through friction-free access to formal credit.<h2 class="heading-node" id="0dd3" style="text-align: justify">Participants in the AA network</h2>While individuals and small businesses form the epicentre, the AA network comprises the three participants listed below.1. Financial Information Providers (FIP)&nbsp;— Data sources like banks, tax platforms &amp; insurance providers.2. Financial Information Users (FIU)&nbsp;— Data recipients such as banks, NBFCs, and <a class="link" href="https://m2pfintech.com/blog/fintech-a-catalyst-for-financial-inclusion/">fintech</a> firms.3. Account Aggregators (AA)&nbsp;— RBI-regulated entities that facilitate real-time data sharing.<img src="https://miro.medium.com/max/1400/1*UnkSCGfGWZf-YpOqny9J7w.jpeg" alt="M2P Fintech" title="" width="100%" height="529">Source: PIB Delhi<h2 class="heading-node" id="72d9" style="text-align: justify">Banks in the AA network</h2>The top eight banks (listed below) that cater to over 300 million consumers have joined the AA network.1. Axis Bank2. ICICI Bank3. IndusInd Bank4. HDFC Bank5. Kotak Mahindra Bank6. IDFC First Bank7. Federal Bank8. State Bank of India<h2 class="heading-node" id="d405" style="text-align: justify">What kind of data does AAs share? How are they different from Aadhar eKYC, credit bureau, and CKYC?</h2>Central Know Your Customer (<a class="link" href="https://m2pfintech.com/blog/know-your-customer-kyc-the-need-for-authentication/">CKYC</a>) registry and paperless Aadhar Electronic Know Your Customer (<a class="link" href="https://m2pfintech.com/blog/know-your-customer-kyc-the-need-for-authentication/">EKYC</a>) capture identity verification and only shares data such as name, address, and gender. And credit bureaus reveal only the credit score, loan, and repayment history of consumers.On the other hand, account aggregators facilitate transaction data sharing from savings, <a class="link" href="https://m2pfintech.com/blog/how-can-banks-and-nbfcs-leverage-the-potential-of-digital-fds/">deposits</a>, or current accounts. They share data pertaining to consumer bank transactions, tax, pension, securities, insurance, and much more.<h2 class="heading-node" id="5e7e" style="text-align: justify">Is data sharing via AA network secure?</h2>Data shared on the account aggregator network is completely secure. It is encrypted by the sender and can be decrypted only by the intended recipient. End-to-end encryptions and digital signatures remove vulnerabilities and secure the process.<h2 class="heading-node" id="42b2" style="text-align: justify">What if consumers choose not to share data?</h2>By all means, a consumer can choose not to share any data. Joining the AA network or registering for data sharing is completely voluntary. They can link the account of their choice, enable or revoke data access at any point in time.<h2 class="heading-node" id="b9c4" style="text-align: justify">Use cases for account aggregator network</h2>Here are use cases in which account aggregators can drive efficiencies and add value to consumers and financial institutions.Personal finance management&nbsp;— Consumers can analyze personal spends across accounts, which will help generate recommendations to streamline expenditure. This process will enable better personal finance goals and budgetary adherence for consumers.Cashflow-based lending&nbsp;— Consuming data from FIPs, FIUs can get better visibility into the cash flow of applicants. Cashflow-based lending will accelerate mainstream lending, especially in SME and MSME credit space.Alternate data for credit assessment&nbsp;— Evaluating a consumer’s creditworthiness is a true challenge if there is inadequate data on his income or payment history. If credit applicants who do not have formal credit access could share their telecom bill payment to the lender, this will generate an alternate data set to assess creditworthiness.Loan monitoring for predictive default analysis&nbsp;— Every lender will want visibility into the borrower’s financial behavior to ensure discipline in repayments. The income and outflow from a person’s bank account could reveal his financial behavior. And this could help lenders predict default patterns.Selling customized financial products&nbsp;— Accessing data concerning consumer behavior with financial products will help financial institutions involved in wealth management and insurance customize their products.Wealth management&nbsp;— Imagine a customer has invested in insurance from A, mutual fund from B, Gold deposits from C, and savings account from D. An account aggregator can unify all this data and help wealth managers handle customers' portfolios more efficiently.Accounts reconciliation for small businesses&nbsp;— With account aggregators, SMEs and MSMEs would not require to manually feed in Tally/ QuickBooks for their daily invoices. They can simply consent to platforms to consume data from FIPs and derisk manual errors.Unified nomination register&nbsp;— Nominations in financial products today are decentralized, hence have to be managed individually. A joint collaboration between the account aggregator and the unified nomination register can solve this.Now, these are not all. We have just scratched the surface of the use cases that account aggregators could have. When more pipelines get enabled on AA network, the use cases will grow exponentially. Then they will have to address concerns surrounding platform stability, data privacy, and grievance redressal mechanisms.M2P believes in democratizing credit by empowering lenders with alternate data/ surrogate channels. Should you be looking for a partner who could help you look beyond conventional credit applicants' data, write to us at&nbsp;<a class="link" href="mailto:business@m2pfintech.com">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.

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