<img src="https://m2p-website-file.s3.ap-south-1.amazonaws.com/m2p-website-file/marketing-cms/m2p-blog/2023/01/Fintech-trends-banner-2.webp" alt="M2P Fintech" title="" width="100%" height="358">2022 was a rollercoaster for the fintech industry. Macroeconomic upheavals, intensifying competition, and regulatory headwinds contributed to the great fintech reset. However, with advances in technology innovation, increasing digital adoption, and improving public infrastructure, the industry overcame hurdles and emerged stronger. Swimming against the tide with turnaround strategies and course corrections, fintech businesses collaborated, consolidated, and diversified to enable sustainable and accessible financial solutions without compromising on people, compliance, and growth. Now, the future of fintech is bright. Blurring boundaries and transforming the way people transact, fintech has been a beacon of hope to many. People across all walks of life and in remote corners without access to fancy smartphones and devices have been able to access digital banking and financial services just by using biometrics and other fintech-led payments. Fintech companies have played a phenomenal role in facilitating this financial inclusion without greater emphasis on security, speed, or convenience. Valued at around $132 billion in 2022,&nbsp;the fintech industry is estimated to grow at 25% CAGR to reach <a class="link" href="https://www.marketdataforecast.com/market-reports/fintech-market">$324 billion</a> in 2027. The ability to improve accessibility, drive inclusion, enhance customer experience, and reduce costs are key drivers behind the growth projection.&nbsp;&nbsp;<a class="link" href="https://m2pfintech.com/blog/future-of-core-banking-systems/">Core Banking</a>, <a class="link" href="https://m2pfintech.com/blog/rbis-new-digital-lending-guidelines-will-it-be-a-game-changer/">Digital Lending</a>, <a class="link" href="https://m2pfintech.com/blog/factors-and-psychology-behind-the-great-bnpl-allure/">Buy Now Pay Later</a> (BNPL), <a class="link" href="https://m2pfintech.com/blog/upi-the-driver-of-economic-growth-and-inclusion/">Unified Payments Interface (UPI),</a> Credit Cards, and other <a class="link" href="https://m2pfintech.com/blog/ready-to-sneak-peek-into-global-cashless-societies/">Cashless</a> Payment modes dominated markets, while Blockchain emerged resilient with RBI adopting the technology for CBDC. Collaborations, consolidations, and platformizations last year set a great tone for 2023.<h2 class="heading-node" id="qp5iitvs9" style="text-align: justify">Trends we can expect in 2023</h2>Consistent customer-centric innovations, partnerships between banks and fintechs, regulatory interventions, and better accessibility - all point towards a promising future for fintech. Here are a few trends we can expect to see in 2023.<ul class="list-node" id="jxu8ecnrq"><li><a class="link" href="#embeddedfinance">Embedded Finance</a></li><li><a class="link" href="#sf">Sustainable Fintech</a></li><li><a class="link" href="#af">Alternative Financing</a></li><li><a class="link" href="#sa">Super Apps</a></li><li><a class="link" href="#ai">Artificial Intelligence</a></li><li><a class="link" href="#cp">Contactless Payments</a></li><li><a class="link" href="#bc">Blockchain</a></li><li><a class="link" href="#mv">Metaverse</a></li></ul><h3 class="heading-node" id="embeddedfinance" style="text-align: justify">1. Embedded Finance &nbsp;</h3><a class="link" href="https://m2pfintech.com/blog/embedded-finance-101-the-bridge-connecting-tech-and-financial-services/">Embedded finance</a> will see exponential growth in 2023 with emerging models that will help businesses thrive. Valued at over <a class="link" href="https://www.simon-torrance.com/blog/EmbeddedFinance1#:~:text=Embedded%20Finance%20offers%20one%20of%20the%20most%20exciting,value%20of%20the%20world%E2%80%99s%20top%20thirty%20banks%20today.">7 trillion-dollar</a>, embedded finance enables smooth integration of financial services into non-financial platforms or applications. Subsets of embedded finance viz., embedded credit, embedded payments, embedded insurance, and embedded banking will majorly benefit SMEs, MSMEs, and other app-based businesses by helping them scale product offerings and customer lifetime value while monetizing their customer base. As the embedded finance space grows, businesses will have the leeway to lower expenses, increase revenue streams, and innovate to deliver personalized, customer-centric products and services, while fintechs handle the heavy lifting on technology, compliance, and delivery.<h3 class="heading-node" id="sf" style="text-align: justify">2. Sustainable Fintech</h3>As the world heads towards net-zero and decarbonization by 2030, fintechs need to take sustainability seriously. In 2023, financial health, <a class="link" href="https://m2pfintech.com/blog/how-m2p-maps-sustainability-with-finance/">sustainable practices,</a> and environmental well-being will be deeply interconnected. A recent Eurogroup survey shows us that 67% of consumers demand sustainability engagement from their bank. &nbsp;And according to a study by Cornerstone Advisors, 70% of Gen-Z and Millennial consumers wanted to track their carbon footprint. Customers are eager to understand how their spending habits affect climate change and if their financial service provider invests in businesses that harm the environment. Being transparent with sustainability practices, incentivizing sustainable engagement, and introducing metrics to track climate impact, could be starting steps to transform businesses into <a class="link" href="https://m2pfintech.com/blog/climate-fintech-fintechs-leading-the-green-tech/">green powerhouses</a>.<h3 class="heading-node" id="af" style="text-align: justify">3. Alternative Financing &nbsp;</h3>There was a time when traditional financial players dominated the lending industry. But those times are changing now. Secure alternative financing options from non-banking fintech companies are emerging rapidly. In fact, the alternative financing industry is valued at <a class="link" href="https://www.grandviewresearch.com/industry-analysis/alternative-financing-market-report">$6.62 billion</a> and is expected to grow at 20% in 2023. The lending industry is democratized with co-lending business models to serve versatile customers, SMEs, MSMEs, and businesses across size and scale.&nbsp;With more core lending players entering the game, evolving regulatory frameworks, and a vast consumer base in need and with access to equitable financial instruments, the alternative financing market is ripe for the taking.<h3 class="heading-node" id="sa" style="text-align: justify">4. Super Apps&nbsp;</h3>2023 will the year for <a class="link" href="https://m2pfintech.com/blog/super-apps-in-consumer-banking-what-role-does-open-banking-play/">super apps</a>. It will be the swiss army knife for businesses as it consolidates multiple applications and eliminates the need for customers and employees to toggle between disparate applications. Just one super app will be able to provide enhanced mobile-first experiences across an aggregated range of services for the growing digital-native generation. Gartner predicts that by 2027, more than 50% of the global population will be active users of super apps. So, it's high time financial businesses leverage the first-mover advantage and develop super apps that fuses the beneficial attributes of an app, platform and digital ecosystem.<h3 class="heading-node" id="ai" style="text-align: justify">5. Artificial Intelligence (AI)</h3>High on data and customer experience, fintech industry will rely heavily on AI for analytics, decision-making, and customer support. Facilitating seamless onboarding, compliance, product customizations, and payments, AI will be the game changer that reduces overhead cost and operational risk along with improving security, and sorting legacy issues. Valued at <a class="link" href="https://www.grandviewresearch.com/industry-analysis/artificial-intelligence-in-fintech-market-report">$9.4 bn</a>, <a class="link" href="https://m2pfintech.com/blog/how-is-ai-changing-the-financial-industry-top-6-use-cases-in-fintech-and-banking/">AI in fintech</a> holds a 16.5% growth potential. And Machine Learning (ML)-based models have been adopted by companies in the financial space to ace real-time target marketing and risk management. But here’s the billion-dollar question. Will AI ever replace humans in fintech? We don’t think so. &nbsp;Complement yes. But not replace.<h3 class="heading-node" id="cp" style="text-align: justify">6. Contactless Payments</h3>The pandemic made contactless payments and shopping the new norm. And there’s no turning back from there.&nbsp; Offering immense speed, security, hygiene, and convenience, technologies like NFC, RFID, and QR codes have simplified checkouts and have taken the payments industry by storm. Valued at $2.2 bn, the contactless payments market is expected to grow at 20% CAGR to reach <a class="link" href="https://www.businesswire.com/news/home/20220106005590/en/The-Worldwide-Contactless-Payment-Industry-is-Expected-to-Reach-12.6-Billion-by-2030---ResearchAndMarkets.com">$12 bn</a> by 2030. As research firms predict exponential growth in wearables, smart devices and contactless cards, fintechs must keep up with the demand for contactless payments.<h3 class="heading-node" id="bc" style="text-align: justify">7. Blockchain</h3>The future of <a class="link" href="https://m2pfintech.com/blog/blockchain-and-fintech-use-cases-and-applications/">blockchain</a> is solid despite setbacks like the crypto crash. Its inherent strength in security, transparency, speed, cost efficiency, and efficient storage will play out as Web3 and <a class="link" href="https://m2pfintech.com/blog/central-bank-digital-currency-cbdc-101-a-primer/">CBDC</a> adoption increases. Blockchain-based data sharing, smart contracts, payment tracking, peer-to-peer lending, encryptions, decentralized architectures and ecosystems, and cybersecurity will be key emerging trends in 2023. The fintech blockchain market size is expected to hit <a class="link" href="https://www.marketsandmarkets.com/Market-Reports/fintech-blockchain-market-38566589.html#:~:text=The%20FinTech%20blockchain%20market%20is%20expected%20to%20grow,Rate%20%28CAGR%29%20of%2075.9%25%20during%20the%20forecast%20period.">$6.2 mn</a> by the end of 2023. So, it's high time fintechs give blockchain some mndspace.<h3 class="heading-node" id="mv" style="text-align: justify">8. Metaverse</h3>Sparking some of the hottest tech discussions, metaverse shook the world with its decentralized, community-owned, virtual utopia. &nbsp;Though in the early developmental stages, metaverse is considered to be the next big evolution in the world of fintech, with the potential to transform how people work, shop, live, and transact. According to a recent Goldman Sachs research, metaverse could give rise to a <a class="link" href="https://newseu.cgtn.com/news/2022-06-13/Metaverse-valued-at-12-trillion-a-year-to-the-global-economy-1aKNYwIjyp2/index.html">$12 trillion</a> virtual economy with intense activity around cross-border payments, financial assets creation, safekeeping and trading. Leveraging Virtual Reality (VR) and Augmented Reality (AR), this virtual phenomenon enables fun and personalized banking and transactions. But the flipside of metaverse is the security concerns that may arise, which if addressed will hold massive promises for the fintech industry. With this we conclude our fintech trends for 2023. While it is challenging to predict exactly how fintech will unfold, we can say with reasonable certainty that 2023 will be an interesting one for the industry, India, and the world. What do you think of these trends? Let us know in the comments! Have a great 2023! Stay connected for the latest fintech news, views, updates, and more.<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.

8 Fintech Trends to Look Out for in 2023

<img src="https://m2p-website-file.s3.ap-south-1.amazonaws.com/m2p-website-file/marketing-cms/m2p-blog/2022/11/BNPL-Issuer-Th.webp" alt="M2P Fintech" title="" width="100%" height="296">The global ecommerce payments industry is constantly evolving to adapt to the ever-changing needs of the customer. With the pandemic fueling digital commerce, flexible payment options have become an element of convenience in online shopping. What started with basic debit/credit card payments now includes internet banking, e-wallets, Buy Now Pay Later (BNPL), EMI, and more. Among these, <a class="link" href="https://m2pfintech.com/blog/factors-and-psychology-behind-the-great-bnpl-allure/" target="_blank" rel="noopener">BNPL</a> is one of the most popular payment choices as it enhances the customers’ purchasing power.<h2 class="heading-node" id="vhq15h9fq">BNPL Footprint in India</h2>India is a budget-driven country, and BNPL is where financial inclusion meets budgeting. The country’s association with <a class="link" href="https://m2pfintech.com/blog/bnpl-the-rising-fintech-star/" target="_blank" rel="noopener">BNPL</a> has been on an upward trajectory since 2021, owing to the rising adoption of ecommerce platforms among the country’s large youth demographic. Currently, India has around 20–25 million BNPL users, and it is likely to reach 100 million by 2026, given the magnitude of its demand and inclusivity.&nbsp;<h2 class="heading-node" id="8dowitkj2">Challenges for BNPL Issuers</h2>In recent years, competition in the BNPL space has intensified, with incumbents going beyond their horizons to develop new, sustainable business models and traditional payments companies deploying their own models to stay relevant in the market. This not only unlocked the purchasing power and helped customers manage their finances by accessing affordable and low-cost credit, but also expanded the market for BNPL products. On the other hand, the vying put significant pressure on the <a class="link" href="https://m2pfintech.com/blog/six-profitable-bnpl-business-models-to-unlock-infinite-value/" target="_blank" rel="noopener">BNPL</a> companies to scale quickly. The role of BNPL lenders does not stop with just issuing credit lines to consumers. They ought to partner with fitting merchants and large aggregators to offer appropriate payment plans, empowering smooth transactions and superior customer experience. Let’s look at the challenges that every <a class="link" href="https://m2pfintech.com/blog/how-can-lenders-overcome-challenges-in-deploying-bnpl-solutions/" target="_blank" rel="noopener">BNPL</a> issuer must manage/address immediately.<ul class="list-node" id="8qvy9xw6r"><li>Onboarding of multiple merchants and aggregators</li><li>Customizing solutions for each merchant based on ticket size and lending rules</li><li>Managing end-to-end transactions such as billing, settlements, and refunds</li><li>Understanding the payment flow to increase the success rate</li><li>Handling schemes, promotions, and subventions</li><li>Analyzing and managing risks</li><li>Integrating multiple stakeholders to enable a number of checkout options</li></ul>Partnering and working with a fintech that has a deep understanding of the market can help BNPL issuers set up the right mix of merchants and aggregators, which is the key to make BNPL work at checkout.Keeping this in mind, we at <a class="link" href="https://m2pfintech.com/buy-now-pay-later/" target="_blank" rel="noopener">M2P</a> built a robust Merchant Acquiring &amp; Payment Processing Platform. The platform is an exemplification of features that help improve checkout financing, boost merchant experience, promote sustainable growth, and amplify the acceptance rate of BNPL at checkout.<h2 class="heading-node" id="ub1c3819a">Merchant Acquiring &amp; Payments Platform</h2>Our Merchant Acquiring &amp; Payments platform comes integrated with our BNPL stack that allows issuers to onboard merchants (online or offline) and payment aggregators instantly and integrate on checkout flow to go live in minutes. The platform is designed to scale with the best payment flows for higher customer acceptance and to support end-to-end checkout experience for all types of BNPL products like checkout EMIs and one-click payments. In addition, it offers complete transparency and control to the issuers in the merchant acquiring and payment processes.&nbsp;Thus, creating a win-win situation for all.&nbsp; Here is a quick overview of what our platform can do.<ol class="list-node" id="hj8oxq8fg"><li>Frictionless and Instant Onboarding: The platform enables automated DIY onboarding with built-in validations and operations that comply with the maker-checker workflows to establish frictionless, real-time onboarding. It facilitates instant DIY and assists onboarding for all types of merchants (online or offline) and Payment Aggregators. This allows merchants across geographies to do business on a single platform.</li><li>&nbsp;Supports all credit products: The platform supports all credit products on merchant checkout, like low-ticket convenience spends and EMI. This creates a robust interoperable shopping environment that renders flexible and smooth checkout experience, thereby augmenting customer loyalty, resulting in lesser cart abandonment, improved average order value (AOV) and transaction size, and increased sales. Such interoperability will significantly increase profits by creating new revenue channels for all parties involved. &nbsp;</li><li>&nbsp;Easy developer integration: Developer friendly <a class="link" href="https://m2pfintech.com/blog/api-the-power-that-drives-new-age-banking-ecosystems/" target="_blank" rel="noopener">APIs</a>, SDKs and plugins with a dedicated test environment to ensure merchants go live in minutes with minimal development effort. &nbsp;</li><li>&nbsp;Feature packed merchant dashboard: The platform empowers merchants to manage transactions, refunds, settlements, reconciliations, disputes, and much more from one single dashboard. This substantially improves operational efficiency and supports easy reconciliation.&nbsp;</li><li>&nbsp;Secure &amp; Compliant: The platform is <a class="link" href="https://m2pfintech.com/blog/pci-dss-a-quick-guide-to-its-levels/" target="_blank" rel="noopener">PCI DSS</a> Level 1 Compliant and regular internal security audits are carried out to ensure that the systems are compliant, and data is safe. It has an in-built fraud and risk management module to protect your business and customers from fraudulent activities.&nbsp;</li><li>&nbsp;Reduces cost and time: Traditionally, reports are manually generated, involving extensive manpower, time, effort, and money. Our platform’s automated billing, settlement reports, and reconciliation reports will reduce the operational cost and time consumed in monitoring and generating the reports. In addition, it also radically reduces the cost and a resource drain entailed in integrating payment methods into a merchant’s checkout. &nbsp;</li></ol><h2 class="heading-node" id="lat8t529s">What differentiates M2P's BNPL solution from others?</h2>Our BNPL stack comes with an in-built Merchant Acquiring &amp; Payment Processing system. It is a meld of seamless onboarding and merchant management system, integrated payments, refund processing, and risk governance. It facilitates multiple merchant or payment aggregator onboarding, merchant KYC, approval, and bank account addition workflow to assist in settlement and reconciliation. In addition, it enables merchants to run campaigns, cashback and rewards integrations for each transaction, dispute management and refunds management, and merchant plug-ins. Our transaction risk management runs a dynamic MCC/MID check for each transaction, limit management per merchant, and velocity checks for transactions. It also provides a comprehensive fund settlement and report module to generate T+1 settlement with merchants and detailed MIS reports and analytics based on the user behavior. In retrospect, with only 4% of the total population opting the pay later option, India's BNPL journey has a long way to go. Nevertheless, given the flexibility and inclusivity, the sector is steadily gaining ground in the country's financial ecosystem. It gives merchants of all sizes a chance to expand their customer bases to increase their average order values and sales. Want to be a market leader in BNPL? Write to us at <a class="link" href="mailto:business@m2pfintech.com">business@m2pfintech.com</a><a class="link" href="https://m2pfintech.com/newsletter/" target="_blank" rel="noopener">Subscribe</a> to our newsletter and get the latest fintech news, views, and insights directly to your inbox. &nbsp; Follow us on <a class="link" href="https://www.linkedin.com/company/m2pfintech/mycompany/">LinkedIn</a> and <a class="link" href="https://twitter.com/m2pfintech">Twitter</a> for insightful fintech tales curated for curious minds like you.

Simplifying Acquisitions and Payments for BNPL Issuers

<img src="https://m2p-website-file.s3.ap-south-1.amazonaws.com/m2p-website-file/marketing-cms/m2p-blog/2022/11/Fleet-Drive-Blog-2-01.webp" alt="M2P Fintech" title="" width="100%" height="447">Logistics is the backbone of any growing economy. In India, the sector is valued at $250 billion and is expected to grow at 8% YoY to reach $330 billion by 2025. The road-based fleet industry, holding over <a class="link" href="https://rmi.org/insight/fast-tracking-freight-in-india-a-roadmap-for-clean-and-cost-effective-goods-transport/" target="_blank" rel="noopener">70% overall share</a> in freight transportation, is a synergy of about 15 million operational commercial vehicles that employ 20 million personnel. The upswing in technological innovations and government policies drive the fleet industry on the road toward digitalization.<h2 class="heading-node" id="m5ns2cs4k" style="text-align: justify">Growth and modernization of fleet industry</h2>Fleet businesses experienced significant revenue growth in the past few years for two primary reasons. One, the evolution of fleet management systems that enabled digital solutions like telematics-based route optimizations and the emergence of fleet aggregators. Fleet management systems have radically disrupted the rather traditional fleet industry by integrating modern technologies and services into the value chain. According to recent reports, fleet management systems as an industry is estimated to grow 14% yearly to 6.8 million units in 2025. As the current market penetration is hanging around 10% for the entire commercial vehicle industry, the growth potential is tremendous. The emergence of fleet aggregators has enabled seamless order and demand management and has generated great opportunities to stabilize and monitor productivity leading to sustainable profitability and growth. And two, the government of India had initiated several digital policies such as FASTag-based toll collection, digital e-way bills, and compulsory installation of GPS devices in commercial vehicles to tap into the day-to-day fleet operations data.<h2 class="heading-node" id="19bv0yegi" style="text-align: justify">Key operational challenges</h2>In spite of the brisk progression in digital adoption, the fleet industry grapples with operational inefficiencies and ineffectual resource utilization. Not all fleet operators have access to technology that helps them control costs and enhance operational excellence, productivity, and profitability. In this article, let's review the top challenges of fleet businesses and how we can help resolve the pain points. <h3 class="heading-node" id="1tw7390n0" style="text-align: justify">Truck owner&nbsp;fragmentation </h3>80% of the trucks running in the country are owned by small vendors with a maximum fleet of five or fewer trucks. These small fleet owners are outside the purview of digital tools and analytics. They lack a&nbsp;centralized platform for evaluating trip data to optimize cost and make better decisions to promote overall development and profitability. <h3 class="heading-node" id="gc9jqny5b" style="text-align: justify">Multiple stakeholders </h3>The mandates of the Indian government and ongoing digitization efforts have detangled some of the essential knots for the fleet business. However, onboarding and managing the fleet system is still a hassle. For example, FASTag wallet, fuel payments, <a class="link" href="https://m2pfintech.com/kyc-suite/" target="_blank" rel="noopener">KYC</a> of drivers, and vehicle registration on the Telematics Platform are arduous tasks involving multiple stakeholders such as Fleet Aggregators, Transporters, Oil Marketing Companies (OMCs), Banks, and National Electronic Toll Collection (NETC).Further, though the fleet payments ecosystem renders numerous digital payment solutions, they are essentially decentralized. This makes it impossible for the fleet operators to view or manage such payments/expenses under one roof. For instance, payment cards for fuel, toll booth payments via FASTag, and other miscellaneous expenses paid (via diverse modes) ought to be handled individually. <h3 class="heading-node" id="tr3d1qtao" style="text-align: justify">Capital allocation </h3>India has the largest road network covering about 98,000 km of National Highways, which is just 2% of the overall road network in the country. But 40% of the total traffic is concentrated on these highways. Nevertheless, the Indian commercial vehicle covers 300 km a day, which is relatively low compared to the global average of 500-800 km a day. A sizeable portion of this journey (~40%) is dead miles, implying trucks travel without load yet have some capital allocated for the return trip. This is done in anticipation of new orders during the return journey; otherwise, they risk missing out on orders due to a longer lead time in getting the capital allocated and the ideal vehicle at the pickup location. Due to the dynamic nature of freight orders, the capital allocated to a vehicle is not in line with the capital required for optimal utility. <h3 class="heading-node" id="bsbf6muja" style="text-align: justify">Limited access to credit&nbsp; </h3>There is a momentous improvement in the fleet industry due to the private sector participation in fleet aggregation and telematics services and government initiatives. However, lenders don't have complete access to payments and cashflows handled by the fleet owners. This results in inefficient credit decisions. For example, lenders have limited or no visibility to real-time reports in terms of daily distance covered, transactions on fuel &amp; FASTag, etc., per vehicle. This leaves lenders with inadequate information on vehicle capital utilization,&nbsp;which in turn results in inefficient credit decisions and low participation in providing working capital for fleet operations.<h2 class="heading-node" id="gjsxze3ag" style="text-align: justify">How can our centralized fleet platform help?</h2><a class="link" href="https://m2pfintech.com/fleet-drive/" target="_blank" rel="noopener">M2P'</a>s Fleet Drive serves as a centralized fleet payments management platform for the end-to-end business needs of the fleet operators, the telematics sector, and the lenders. Our platform serves as a one-stop solution for all fleet challenges by enabling harmonized payment management across trips and cohesive access to the capital for fleet operations. Our cutting-edge <a class="link" href="https://m2pfintech.com/blog/api-the-power-that-drives-new-age-banking-ecosystems/" target="_blank" rel="noopener">API</a>-driven technology stack ensures seamless integration of the stakeholders such as NETC, OMCs, lenders, telematics, and fleet aggregators, and provides the following benefit to the fleet industry. <h3 class="heading-node" id="p4pd974mg" style="text-align: justify">Seamless onboarding and integration&nbsp; </h3>M2P's API-driven Fleet Drive Platform fosters frictionless onboarding of vehicles and drivers. It also enables hassle-free, digital, and secure integration with stakeholders such as OMCs, NETC, fuel retailers, banks providing <a class="link" href="https://m2pfintech.com/blog/how-to-implement-the-best-prepaid-payment-instrument-ppi-for-your-business/" target="_blank" rel="noopener">PPI</a> wallets, and Enterprise Resource Planning (ERP) of fleet aggregators for trip payments management.&nbsp; <h3 class="heading-node" id="e22ukte1x" style="text-align: justify">Single wallet to manage all payments </h3>The platform allows fleet owners to manage payments across FASTag, fuel, and ATM expenses throughout the trip. It also empowers the fleet owners to switch unused funds across the driver FASTag and fuel account back to the master wallet, enabling real-time capital allocation.&nbsp; <h3 class="heading-node" id="9uinlnwb5" style="text-align: justify">Real-time control and visibility&nbsp; </h3>Our Fleet Drive Platform has a centralized dashboard that provides comprehensive visibility to all on-trip operations. Fleet owners can track active vehicles, driver location, wallet balance, limit management, and capital allocation across the fleet.&nbsp; <h3 class="heading-node" id="z6ppg8kcw" style="text-align: justify">Partnership with major Oil Marketing Companies (OMCs)&nbsp; </h3>The platform facilitates stakeholders with cross-functional opportunities like fuel cashback/rewards with no surcharge on fuel payments across partner OMCs. Our API-driven technology stack supports OMCs in onboarding transporters, integrating with payment wallets, generating statements and reconciliation.&nbsp; <h3 class="heading-node" id="x498k680b" style="text-align: justify">Add value with fintech layer&nbsp; </h3>Fleet Drive Platform provides real-time reports and insights for lenders to make accurate credit decisions. With its end-to-end integration across the fleet payments ecosystem, the platform makes sure the transactions are recorded and verified for each vehicle across the entire fleet. This ensures lenders have complete visibility of the capital utilization by each fleet operator and their vehicles. They are empowered to manage risk effectively based on their Business Rule Engine (BRE) and provide credit. For Fleet Operators, adding a fintech layer to the fleet operations value chain will help in handling cash flow management based on demand and route optimizations and getting credit access from lenders.<h2 class="heading-node" id="uwglbh6eq" style="text-align: justify">360-degree Fleet Payments Management</h2>Despite the numerous advantages of the modern fleet management system, its market penetration in the fleet industry is comparatively low and lacks the finance layer to enable efficacious and secure operations. It is imperative to amalgamate the data generated by telematics &amp; fleet aggregators with the fleet payments in order to render better insights and improve the decision-making ability of the fleet operators and lenders. M2P's Fleet Drive Platform employs an API-driven technology stack to seamlessly integrate all the stakeholders to create an efficient 360-degree Fleet Payments Management. For more information on our Fleet Drive Platform, write to us at <a class="link" href="mailto:business@m2pfintech.com">business@m2pfintech.com</a>.&nbsp; <a class="link" href="https://m2pfintech.com/newsletter/" target="_blank" rel="noopener">Subscribe</a> to our newsletter and get the latest fintech news, views, and insights directly to your inbox.&nbsp; Follow us on <a class="link" href="https://www.linkedin.com/company/m2pfintech/mycompany/">LinkedIn</a> and <a class="link" href="https://twitter.com/m2pfintech">Twitter</a> for insightful fintech tales curated for curious minds like you.&nbsp;

Optimize Fleet Payments through Fintech Innovations

<img src="https://m2p-website-file.s3.ap-south-1.amazonaws.com/m2p-website-file/marketing-cms/m2p-blog/2022/11/Super-Apps-in-Banking-blog_Word-press.webp" alt="M2P Fintech" title="" width="100%" height="479">Imagine an app that allows you to access your bank accounts, make payments, take out loans, handle your insurance policies, monitor your investment dashboard, and more—all in one!Wouldn't that be the epitome of convenience? Such nifty apps are no longer a fiction.&nbsp;Embrace yourself when we say these SUPER APPS are on their way to radically disrupt the way we know accessibility in digital banking.&nbsp;Before diving deep into Super apps in consumer banking, let us quickly recap what a Super app is.<h2 class="heading-node" id="ny0ld8tzi" style="text-align: justify">What are Super apps?</h2>A Super app is a single portal that powers a wide range of functions and services shaped around users' daily lifestyle needs. Technically, a super app is a collection of multiple niche applications that establish an ecosystem of fully-integrated third-party services aided by a payment system. This creates a mini operating system that acts like a digital assistant, working at the user's convenience as one can stay in the app to carry out a multitude of tasks.Although the concept has been creating massive buzz recently, it isn't new. Businesses like TenCent, Alipay, Grab, Paytm, and Gojek have been the frontrunners for years. Let us give you a quick overview of how some of these companies support an all-inclusive platform.TenCent is a Chinese company that started as a simple messaging platform (named WeChat). Once they built their billion-plus customer base, they slowly set up a network of services, including virtual wallets, payments, hotel reservations, taxi rides, medical consultations, games, and much more.An example that is closer to home is Paytm. In 2010, Paytm was launched as a payment application. Today, it offers a comprehensive set of services, including online shopping, credit cards, loans, repayments, microloans, BNPL, insurance, ticketing services, retail brokerage products, online games, and more on its platform. Given the platforms' extensive acceptance, several fintechs are now trying to recreate a similar model customized to their customer bases.<h2 class="heading-node" id="zehxh25s4" style="text-align: justify">What makes them Super?</h2>What marks off a Super app from a regular app is the element of multifunctionality, comprehensiveness, and data privacy. Further, it best suits businesses with extensive data and a large customer base. In addition, rendering a gamut of services and products through one application gives customers a sense of belonging, ownership, and safety, which significantly enhances the customer experience.Here are some of the key factors that contributed to the popularity and success of Super apps.One-click relevance: Provides customers with personalized overviews and product offers. Rolling everything customers need to transact through daily life into a Super app is one way to core relevance and success.&nbsp;Real-time communications: Chatbot interactions that offer real-time assistance, including upselling, fraud prevention, nudges, and recommendations.&nbsp;Connectivity: Anything from financial, business, lifestyle, and health to government can be accessed through one app.<h2 class="heading-node" id="n493lw6t3" style="text-align: justify">Super apps in Consumer Banking</h2>Super apps in the banking sector are a rare feat. Conversely, fintechs quickly recognized the potential of enabling ultra-personalization and budget automation using AI-powered financial assistants. They are keen to build Super apps that can leverage aggregators with established digital marketplaces to connect users with an existing ecosystem for digital banking and financial services.Ideally, a financial Super app is a multi-function digital banking and <a class="link" href="https://m2pfintech.com/blog/the-rise-of-digital-payments/" target="">payments</a> solution featuring financial services that are beyond payments. The app must enable consumers to perform most of their daily activities digitally, like bill and fee payments, purchases, fund transfers, bookings, tickets, subscriptions, investment management, and insurance purchases and management. Interestingly, the list can keep adding as many functionalities as possible to improve customer engagement and satisfaction.According to recent studies, about 50% of consumers use mobile application or website at least once a week to interact with their bank. This stands as a testimony that today's consumers and businesses expect their banks to be a tap away and swiftly adapt to their digital needs. Experts believe, with embedded finance and open banking, any provider can become a super app that serves as a gateway that delivers the ever-growing demand for convenience in the banking process — rather than just a series of disconnected/loose-ended financial services.When it comes to consumer banking, it's all about comprehensive experience in a Super app environment. And it takes more than just tech. It requires full partner-network management, a clear understanding of compliance, rights, responsibilities, liabilities, commitment to developing a broad-ranging ecosystem, and more. For instance, a <a class="link" href="https://m2pfintech.com/blog/neo-banking-101-all-you-need-to-know/">Neobank</a> can provide an 'N' number of financial products and services by integrating with regulated FI at the back end and tech-driven fintech at the front end.Essentials of Financial Super apps Intuitive user experience and interconnectedness are the cornerstones of a financial Super app. These will allow users to easily access all available features. Here are some of the key elements that a financial Super app must include:<ul class="list-node" id="52ez20cgw"><li>Shared wallet&nbsp;</li><li>Savings accounts&nbsp;</li><li>Budgeting tools&nbsp;</li><li>Bill reminders</li><li>Auto bill payments&nbsp;</li><li>Managing subscriptions&nbsp;</li><li>Investment options&nbsp;</li><li>QR code payments and rewards</li></ul><h2 class="heading-node" id="sw6d1s7fn" style="text-align: justify">How Open Banking powers Super apps?</h2>Super apps use financial data from multiple sources to create financial products and services to meet customers' needs.But how do they get to know what their users need?What provides them with the information they need to create an omni-channel experience?Enter Open Banking.Open banking is the foundation of interoperability in the banking sector. For novices, Open Banking system uses <a class="link" href="https://m2pfintech.com/blog/api-the-power-that-drives-new-age-banking-ecosystems/">APIs</a> to provide third-party financial service providers access to consumer banking, transactions, and other financial data from banks and NBFCs. To understand the working of Open Banking, read <a class="link" href="https://m2pfintech.com/blog/open-banking-a-primer-2/" target="_blank" rel="noopener">here</a>.The Open Banking system presents the platform with a spectrum of opportunities to tailor financial services to cater to each user's requirements. It employs advanced technologies like AI, ML, and Data Analytics to maximize personalization and build customer-relevant products by leveraging customers' data. Using advanced technology to analyze data and develop customer-centric products/services fosters data-sharing culture and data-driven decision-making across the ecosystem.With the help of Open Banking, Super apps can empower customers to check their account balances, make payments, track recent transactions, and perform other traditional banking operations from the app's digital wallet. This strikingly reduces the need to access a bank's app. In addition, as Open Banking expands into open finance and open data, Super apps can access and connect with a wide range of partners to augment go-to-market speed for new products and broader their customer base.<h2 class="heading-node" id="9eqqd85qv" style="text-align: justify">API Inference</h2>API infrastructure is the essence of embedded finance and open banking. A good API provider wraps intricacies like disputed payments and connecting to multiple suppliers inside the API system. This allows intended apps to work together in several ways and develop a comprehensive ecosystem. In addition, APIs empower Super apps to handle extensive, inter-connected data through multiple levels without disturbing the user journey. Fintechs leverage APIs to seamlessly incorporate functionalities into cloud-native apps. They employ full-fledged, mobile-first, customizable API stack to simplify consumer banking and enable end-to-end customer-centric retail offerings.Want to understand the nuts and bolts of Super apps? Write to us at <a class="link" href="mailto:business@m2pfintech.com">business@m2pfintech.com</a>&nbsp;&nbsp;To boot, what would an ideal Super app be for you? Let us know in the comments below.&nbsp;<a class="link" href="https://m2pfintech.com/newsletter/">Subscribe</a> to our newsletter and get the latest fintech news, views, and insights directly to your inbox.&nbsp;Follow us on <a class="link" href="https://www.linkedin.com/company/m2pfintech/mycompany/">LinkedIn</a> and <a class="link" href="https://twitter.com/m2pfintech">Twitter</a> for insightful fintech tales curated for curious minds like you.

Super Apps in Consumer Banking - What Role does Open Banking Play?

<img src="https://m2p-website-file.s3.ap-south-1.amazonaws.com/m2p-website-file/marketing-cms/m2p-blog/2022/10/Gift-Cards-Blog-01-1.webp" alt="M2P Fintech" title="" width="100%" height="358">Gifts play an important role in creating and nurturing relationships. Right from the historic age, gifts in the form of commodities, gold, silver, and cash were welcomed with great gusto.<h2 class="heading-node" id="8hk25m6sk" style="text-align: justify">Are gift cards better than cash?</h2>Choosing the right gift is always a challenge, even for the most seasoned gifters. That’s why cash evolved as a versatile gifting option. Cash was among the most useful gifts that enabled the receivers to buy anything of their choice. However physical cash gifts were considered impersonal and indifferent, not allowing the receiver to treat the gift as a memorable souvenir. As societies progressed towards a <a class="link" href="https://m2pfintech.com/blog/ready-to-sneak-peek-into-global-cashless-societies/">cashless</a> world, currencies began losing their fancy. Gift cards emerged as a better alternative to cash. It provided a perfect way to gift someone the flexibility and freedom to buy what they want. Today, it’s not just individuals who send gift cards to their loved ones. New-age companies &amp; growing organizations consider gift cards the best way to reward their customers and incentivize their employees. The global gift card market was valued at $619.25 billion in 2019. Experts estimate the market to grow at 16% CAGR and cross over $2,076 billion by 2027.<h2 class="heading-node" id="mc5s8l8zp" style="text-align: justify">What is a gift card?</h2>Gift card is a <a class="link" href="https://m2pfintech.com/blog/prepaid-cards-101-a-definitive-guide-for-growth-and-profitability/">prepaid card</a> that is loaded with a specific amount of money by the issuer. Anyone can issue gift cards by partnering. A gift card works like a <a class="link" href="https://m2pfintech.com/blog/debit-card-issuance-101-all-you-need-to-know/">debit card</a>. The issuer preloads the card with cash, in accordance with the value of the card. The purchaser can use gift cards to make both online and offline purchases. Each gift card has a unique number, a barcode, magnetic stripe, and an encoded chip. That number is "loaded" or activated with the appropriate amount of cash. This is done using the database of the gift card transaction system.<h2 class="heading-node" id="dntnq6gjj" style="text-align: justify">Types of gift cards</h2>There are two types of gift cards. Open-loop – An open-loop gift card can be used at any merchant location that accepts the issuer brand of card. For example, a gift card with the Visa logo can be used for purchases at any store that accepts Visa cards. Closed-loop - Marketed by retail or ecommerce stores, closed-loop gift cards allow the cardholder to purchase anything from the specified seller. For instance, if you buy a gift card from Starbucks or Amazon, you or the receiver would only be able to spend it at that particular store.<h2 class="heading-node" id="5spgga35z" style="text-align: justify">Why are gift cards important for businesses?</h2>Gift cards can be purchased instantly and they directly land in the recipient’s inbox within seconds. They are memorable, convenient, and give total freedom to buy whatever the recipient wants. They can be <a class="link" href="https://m2pfintech.com/blog/payment-cards-design-made-simple-heres-what-you-need-to-know/">designed</a> with personalization to include the person's name, business logo, and even a brief note. All these help boost user experience, brand recall, and loyalty. Something cash gifts can definitely not do. Businesses can leverage gift cards to improve cross-selling opportunities, enhance employee relations and customer relationships, and boost brand equity. Gift cards today transcend marketing. They enable businesses to test products and gain more understanding of the market, and in fact, even serve as an additional revenue grosser (card sales &amp; upselling opportunity).<h2 class="heading-node" id="ugthnn82i" style="text-align: justify">How to accelerate your gift card program?</h2>To create and run a successful gift card program, you'll need a well-thought-out concept and cloud-first technology expertise. Businesses need a powerful API platform to issue scalable gift cards across brands, markets, and currencies. The <a class="link" href="https://m2pfintech.com/blog/api-the-power-that-drives-new-age-banking-ecosystems/">API</a> platform should allow for quick deployments without contracts, with reasonable pricing, and commission rates. The ability to constantly add new retailers and leverage cutting-edge implementation technology is critical to improving the end-user experience and ensuring a return on investment (ROI) on product development. Partnering with an efficient <a class="link" href="https://m2pfintech.com/blog/why-should-apis-be-your-holy-grail-for-prepaid-card-issuance/">API</a>-led card issuer and program manager is a great way to kickstart your gift card journey. Check if your card issuance and program management partner can deliver on the game-changing pointers below.<ol class="list-node" id="hnyuzbgd3"><li>Customized, form-factor agnostic gift cards issuance</li><li>Cloud-ready services at incredible GTM speed</li><li>End-to-end card processing via own card network interfaces</li><li>Security features embedded with 3D secure technology</li><li>Ability to predefine limits and rewards flexibility</li><li>Offline and online accessibility</li></ol>Looking to issue gift cards? Write to us at&nbsp;<a class="link" href="mailto:business@m2pfintech.com">business@m2pfintech.com</a>&nbsp;to get started!&nbsp; We are happy to help. <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.

Accelerating a Cloud-Ready Gift Card Program

<img src="https://m2p-website-file.s3.ap-south-1.amazonaws.com/m2p-website-file/marketing-cms/m2p-blog/2022/09/MicrosoftTeams-image-9.webp" alt="M2P Fintech" title="" width="100%" height="253">The world of banking has transformed over the years. Customer experience has now become a key differentiator. Personalization, speed, convenience, and security have evolved as factors that determine profitability.To keep pace with the changing customer expectations and the competitive landscape, banks need to modernize their core banking systems. Only then can they scale technology innovation, upgrade processes, and re-engineer their workforce to deliver mobile-first, personalized customer experiences while reducing cost and complexities.Go beyond the surface and explore more.<ul class="list-node" id="dnjdyenon"><li><a class="link" href="#21">What are Core Banking Systems?</a></li><li><a class="link" href="#11">Evolution of Core Banking Systems</a></li><li><a class="link" href="#31">Turing Core Banking System (CBS)</a></li><li><a class="link" href="#41">What’s New in Core Banking?</a></li><li><a class="link" href="#51">Final Word</a></li></ul><h2 class="heading-node" id="21" style="text-align: left">What are Core Banking Systems?</h2>Centralized Online Real-time Environment (CORE) banking systems serve as the technical infrastructure that enables banks to manage their day-to-day operations efficiently and seamlessly. They facilitate branch agnostic transactions across multiple touchpoints worldwide.Hosted on-premise or in the cloud, core banking provide a singular view of customer data to facilitate information flow and operational excellence across delivery channels. It simplifies services such as new account creation, customer relationship management, transaction processing, loan issuing, and servicing. Banks can achieve greater cost and operational efficiencies by making the big shift from legacy to modern <a class="link" href="https://m2pfintech.com/blog/core-banking-essentials-types-components-advantages/">core banking solutions</a>.<h2 class="heading-node" id="11" style="text-align: left">Evolution of Core Banking Systems</h2>Core banking is not a new phenomenon. It had a humble beginning in the 1970s with rigid codes and basic computerizations and evolved with technological advances, product innovations, and customer requirements to be what it is today.<img src="https://m2p-website-file.s3.ap-south-1.amazonaws.com/m2p-website-file/marketing-cms/m2p-blog/2022/09/Infpgraphic-1.webp" alt="M2P Fintech" title="" width="100%" height="253"><h3 class="heading-node" id="hefhm2ugl" style="text-align: left">1st Generation Core Banking System – Basic Computerization</h3>From 1970 to 1990 CBS began taking root in the banking industry. At its most primal form, the system functioned on basic computerization techniques and was developed in-house by most banks.The 1st gen CBS used monolithic applications that were based on complex codes. The IT costs were quite high, and it offered only a few basic features like transaction execution, record-keeping, and customer data management. Sequential data were stored in silos, and transactions were processed in batches at the end of the day.So, <a class="link" href="https://m2pfintech.com/blog/tale-of-money-transfers-from-hawala-to-one-click-remittances/">money transfers</a> and <a class="link" href="https://m2pfintech.com/blog/future-of-payments-processing-matched-with-industry-needs/">payments</a> could not be processed in real-time. The applications were accessible to users only during counter hours. The system was prone to data loss and was difficult to replace without causing a service disruption.<h3 class="heading-node" id="lk1xsezsg" style="text-align: left">2nd Generation Core Banking System - Product-centric Digital Interface</h3>From 1990 to 2005, CBS was in its product-centric avatar with a penchant for digital interfaces. The infrastructure developments were outsourced to external parties that focused on building a vibrant user interface for 24/7 access to banking services.Software modules and a few subroutines were introduced to improve the flexibility of the code. But, even after several optimization trials, the code remained complex. This made processing large volumes of transactions tougher. And banking data were still organized in silos.Client programs were slowly added even though the standards were still mainframes. Software that was previously accessible through branch networks now became available to customers at ATMs and payment terminals. However, during maintenance, the system still faced prolonged service disruption.<h3 class="heading-node" id="i8wq3v74b" style="text-align: left">3rd Generation Core Banking System - Customer-centric Processes</h3>2010 was the year 3rd generation CBS came into prevalence. It was a major leap from the yesteryear computerizations and product-centric interfaces. CBS became more customer-centric, and banks began building a digital layer to improve flexibility.The first programming interfaces appeared, and the core banking software was accessible on the Internet. The software architecture became less monolithic, and the system started to adapt to newer structures, such as Application Service Providers (ASPs) and Service-Oriented Architectures (SOAs).On the user experience side, newer milestones were achieved, and now version changes could be performed in a shorter span of time. Truly graphic interfaces in HTML and Windows pages were introduced.The infrastructure was completely customer focused. But things started to change when the pandemic struck in 2020. Customer needs, expectations, journeys, and touchpoints underwent a radical transformation.Modern core banking systems came around to save the day. It kickstarted digital transformation in traditional banks and helped new-age banks accelerate next-gen customer experience. API-led core banking architectures enable banks to scale reliable and strong banking ecosystems with frictionless, rapid integrations.<h3 class="heading-node" id="2ndpajyzi" style="text-align: left">4th Generation - Next-gen Core Banking via Platformization</h3>After 2020, 4th generation core banking systems came into prevalence. Platformization of CBS evolved as a crucial development, transforming the core from being only a system to becoming a complete platform.Going beyond traditional models, modern core banking platforms give banks the agility to scale and fully leverage the potential of digital revolution to satisfy stakeholders such as customers, employees, regulators, and partners.&nbsp;However, traditional banks with legacy core banking platforms still grapple with silos, code rigidity, and complexities. Even though their financial processes are automated and newer distribution channels are in place, legacy systems hinder adaptive flexibility to changing customer journeys and behavior, closed ecosystems, and vendor lock-ins. They also result in higher maintenance costs, slower GTM speed, and do not support instant releases.<a class="link" href="https://m2pfintech.com/blog/unlock-the-future-of-banking-with-next-gen-core-banking-solutions/">Next-generation core banking</a> platform breaks down all the barriers that legacy systems impose. They accelerate digital transformation using modern, scalable, and open architectures and lightweight codes. Leveraging APIs and advanced technologies like machine learning, core platforms deliver simplicity, cost efficiency, speed, interoperability, flexibility, security, and future readiness.<h3 class="heading-node" id="c3fg1qz8n" style="text-align: left">Benefits of Next-gen Core Banking Systems</h3><ul class="list-node" id="zkhhkcwra"><li>Simplicity in scaling up</li><li>Agility to accelerate new product launches</li><li>Incredible go-to-market speed</li><li>Onboarding and setting up happen in a few clicks</li><li>Advanced security systems for data storage and fraud prevention</li><li>Centralized access to account aggregators, mobile and third-party applications</li></ul><h2 class="heading-node" id="31" style="text-align: left">Turing Core Banking System (CBS)</h2>Turing Core Banking System (CBS) is a next-gen platform that focuses on customer experience, operational excellence, and security well within the regulatory framework. It is built on the latest micro-services architecture with low code and an <a class="link" href="https://m2pfintech.com/blog/api-the-power-that-drives-new-age-banking-ecosystems/">API</a>-first, cloud-agnostic platform making it a modern and futuristic core banking system.<h3 class="heading-node" id="lb5majzyt" style="text-align: left">Unique Features of Turing</h3><ul class="list-node" id="mlvnqk619"><li>Incredible Speed of innovation (using <a class="link" href="https://m2pfintech.com/blog/how-is-ai-changing-the-financial-industry-top-6-use-cases-in-fintech-and-banking/">AI and ML</a>)</li><li>Flexibility (low code capabilities)</li><li>Agility (hyper-personalized products)</li><li>Pre-integrated with Fraud Risk Management (FRM) engine</li></ul>Furthermore, the primary vantage point of 4th Generation CBS is its ability to evolve and adapt to emerging trends in the financial industry.&nbsp;<img src="https://m2p-website-file.s3.ap-south-1.amazonaws.com/m2p-website-file/marketing-cms/m2p-blog/2022/09/Whats-new-in-core-banking.webp" alt="M2P Fintech" title="" width="100%" height="253"><h3 class="heading-node" id="ee2asr4hj" style="text-align: left">Open Banking and APIs&nbsp;&nbsp;</h3><a class="link" href="https://m2pfintech.com/blog/open-banking-a-primer-2/">Open banking</a> and the utilization of APIs are key drivers in the next generation of core banking platforms. APIs empower financial institutions to seamlessly integrate with third-party banking solutions, enhancing their service offerings and expanding their reach within the digital ecosystem. This synergy facilitates innovation and the creation of a comprehensive banking experience.&nbsp;<h3 class="heading-node" id="ezrisfcla" style="text-align: left">AI and Machine Learning&nbsp;</h3>The integration of artificial intelligence (AI) and machine learning revolutionizes core banking software. These technologies provide predictive analytics, bolster fraud detection, and deliver personalized customer experiences. Harnessing the insights from vast data pools, AI and machine learning empower banks to make informed decisions, streamline operations, and foster heightened customer satisfaction.&nbsp;<h3 class="heading-node" id="z6cl9klc2" style="text-align: left">Enhanced Security Protocols&nbsp;</h3>As digital transactions become more common, security remains paramount. Multi-layered security protocols, including biometric authentication, two-factor authentication, and end-to-end encryption, are being woven into the fabric of core banking systems. These measures are crucial in safeguarding sensitive customer data and maintaining trust in an increasingly digital landscape.&nbsp;<h3 class="heading-node" id="muek4aumh" style="text-align: left">User-Centric Design&nbsp;&nbsp;</h3>Modern core banking software centers on user-centric design principles. Intuitive interfaces, personalized dashboards, and mobile responsiveness are integrated to ensure that both bank employees and customers enjoy a seamless and intuitive banking experience.&nbsp;<h3 class="heading-node" id="ivow0e1u7" style="text-align: left">Sustainable Banking&nbsp;</h3>The evolution of core banking goes beyond technological advancements and encompasses sustainability, embracing the principles of <a class="link" href="https://m2pfintech.com/blog/climate-fintech-fintechs-leading-the-green-tech/">green fintech</a>. Core solutions align with global concerns about climate change and social responsibility by integrating features that facilitate green investments and enable carbon footprint tracking.&nbsp;<h3 class="heading-node" id="i4q9dhpvd" style="text-align: left">Integrating Decentralized Finance (DeFi)</h3>Blockchain technology and cryptocurrencies are reshaping the financial system. Some core banking software is now incorporating DeFi integrations, enabling banks to offer services related to crypto trading, lending, and borrowing.&nbsp;<h3 class="heading-node" id="x6n64jqoo" style="text-align: left">Chatbot Interfaces&nbsp;</h3>Voice assistants and chatbots are being integrated into banking systems to provide instant customer support and assist with transactions. Customers can perform banking tasks using natural language, simplifying interactions, and reducing the need for manual assistance.&nbsp;<h2 class="heading-node" id="51" style="text-align: left">Final Word</h2>The future of banking is driven by digital innovation, connectivity, and a steadfast focus on customers. Modernizing the core is no longer a choice, it is a dire requirement for banks to grow with agility, efficiency, and customer-centricity.&nbsp;Want to know more about modernizing your core banking system?Write to us at <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> for insightful fintech bytes curated for curious minds like you.

Future of Core Banking Systems

<img src="https://m2p-website-file.s3.ap-south-1.amazonaws.com/m2p-website-file/marketing-cms/m2p-blog/2022/08/MicrosoftTeams-image-6.webp" alt="M2P Fintech" title="" width="100%" height="383">Disbursing salaries to the unbanked and underbanked is a crucial challenge for businesses. Direct debit, paychecks, and demand drafts are clearly not suitable options as their bank accounts are either inactive or non-existent. Though paying in cash sounds easier, it involves immense effort in calculating, withdrawing, distributing, and bookkeeping.&nbsp;Businesses worldwide grapple with the responsibility to pay their underbanked employees on time with utmost security. They leverage digitized payroll cards to optimize salary disbursal and deliver secure and seamless payouts.&nbsp;So, what is a payroll card? What are its pros and cons?&nbsp;Keep reading to know.&nbsp;<h2 class="heading-node" id="5ckwb8qg3">What is a payroll card?&nbsp;</h2>A payroll card is a prepaid card that employers use to pay their employees. The employer (business) loads the card with wage or salary via the respective routing/account number. These cards are reloadable and can be issued both in virtual and physical forms. Businesses are adopting customized payroll card programs to embrace sustainability, optimize their financial and human resources, augment bottom line performance, and extend value to employees.&nbsp;Payroll cards are a secure alternative to direct deposits (bank accounts), cash payments, and paychecks. They are ideal for traditional recurrent disbursals, daily wages, fees, just-in-time allotments, and other customized payments and reimbursements. They function like regular debit cards and can be used to make cash withdrawals, POS payments, utility payments, money transfers, and balance inquiries.&nbsp;Payroll cards help the unbanked segments receive salaries in a structured way while helping them save and track their spending. It eliminates the need for a bank account or physically going to a bank to cash a paycheck.&nbsp;&nbsp;<h2 class="heading-node" id="uqt09bdni">Types of payroll cards</h2>Payroll cards can be customized according to business requirements. They are broadly classified into four categories.<ul class="list-node" id="89x3ltnvt"><li>Branded payroll cards - The branded cards carry the card network logo and can be used for domestic and international transactions.&nbsp;</li><li>Personalized payroll cards - These cards have the respective card holder (employee) name printed on the card.&nbsp;</li><li>Instant issue payroll cards -&nbsp; As the name suggests, these payroll cards are issued on the spot. So they do not carry the name of the cardholder.&nbsp;</li><li>Portable payroll cards -&nbsp; If the cardholder holds multiple jobs or has cash flowing in from several sources, then portable payroll cards come in handy.&nbsp; These cards can accept government benefits, tax returns, and salaries from consecutive employers.&nbsp;</li></ul>The above-mentioned card types are not mutually exclusive. They can be mixed, matched, and customized as per the need.Now, let's check out the pros and cons of payroll cards for businesses and employees.&nbsp;<h2 class="heading-node" id="ehevreuu7">How payroll cards benefit businesses?</h2>For employers who intend to take full advantage of electronic fund transfer, <a class="link" href="https://m2pfintech.com/blog/prepaid-cards-101-a-definitive-guide-for-growth-and-profitability/">prepaid</a> payroll cards are a befitting option. The payroll cards program streamlines the payroll process while creating a win-win situation for unbanked employees and their employers. It is also deemed as an economical alternative to issuing paychecks.&nbsp;Here are some of the benefits:&nbsp;<ul class="list-node" id="bshphz1p0"><li>Reduces cost, effort, and time - The payroll card program reduces the costs and time associated with accounting and administration. It cuts down production effort involved in handling manual paychecks and issues associated with lost or stolen checks, stop payment orders, fraudulent cashing of duplicate checks, and more. It minimizes charges related to bank transactions and eliminates escheat issues.&nbsp;</li><li>Increases efficiency - Payroll cards use <a class="link" href="https://m2pfintech.com/blog/why-should-apis-be-your-holy-grail-for-prepaid-card-issuance/">API-based tech stacks</a> that leverage financial technologies to increase the efficiency, pace, and accuracy of payroll processing. Payrolls can be processed in no time, and disbursals can be optimized to their fullest potential.</li><li>Boosts sustainability - The rise of paperless, digitized payroll in the form of virtual and physical cards helps businesses embrace sustainable finance and operations. Payroll cards eliminate the need to cut trees for the paper required to produce physical cash, cheques, account stationery, and more. When the cards are metallic, plastic hazards too get out of the picture. Thus payments and salary disbursals can be made in a green and eco-friendly manner.</li><li>Builds trust and reliability - As salaries get credited to the card on time without the hassle of check bounces or bank strikes, the reliability factor of the employer increases. Employees trust their payroll cards will be ready to use without any security issues.</li><li>Drives employee loyalty - All employees who have payroll cards are eligible for real-time payments regardless of their relationship with the banks. This ensures that salaries are credited to all cardholders instantly without any bias or hassle. Irrespective of being banked or unbanked, employees can use this cashless payment instrument to spend, save and track their expenses safely. These inclusive processes and initiatives drive employee satisfaction and loyalty.&nbsp;</li></ul>Employee welfare is an integral part of any organization. Therefore, it is imperative to recognize and evaluate the advantages and disadvantages of employee payroll cards. It helps you make informed and better decisions that nurture the overall growth of the employees and the business.&nbsp;<h2 class="heading-node" id="fcvsqq9kv">How payroll cards benefit employees?</h2>For employees, payroll cards provide a convenient way to access wages/salaries without physically going into a bank or opening a bank account. Employees can use payroll cards at any merchant that accepts debit cards. They can also help employees avoid check-cashing fees and other charges associated with traditional banking products.&nbsp;Payroll cards offer many other advantages to employees.&nbsp;<ul class="list-node" id="je5f3uu4t"><li>Instantaneous, easy to use, transparent, and secure.&nbsp;</li><li>Provides a convenient way to receive salary/wages without a bank account.&nbsp;</li><li>Eliminates the hassle of cashing the paycheck.&nbsp;</li><li>Promotes financial wellness as cardholders can track their spending and budget more efficiently with a payroll card.&nbsp;</li><li>Helps employees stay without debt. as the spending can be monitored and controlled.&nbsp;</li><li>If the card is lost or stolen, it can be blocked to reduce fraud and loss of funds.&nbsp;&nbsp;</li><li>Can be used to incentivize employees through reward points, cash backs, and discounts on transactions.&nbsp;</li></ul><h2 class="heading-node" id="ckfgbv29e">Downsides of payroll cards</h2>Like any other good thing in life, payroll cards also come with their own downsides. &nbsp;<ul class="list-node" id="m1sbxu2gv"><li>First off, most cards come with monthly maintenance charges and may apply additional fees for certain transactions like balance inquiries, ATM withdrawals, and similar activities. &nbsp;</li><li>The second major downside may happen when there is a card “freeze.” Some service companies place a temporary hold or “freeze” on a card for several days or sometimes even weeks. Employees who do not have a bank account will be unable to make any payments until the freeze is relaxed. &nbsp;</li><li>Further, if the card is lost/stolen, the employee will not have access to the funds until a new card is replaced.&nbsp;</li></ul><h2 class="heading-node" id="cfeambdgp">Are payroll cards a right fit for your business?&nbsp;</h2>Payroll cards serve as a multi-functional tool for employees to create a robust everyday financial system that works for their specific lifestyles. According to surveys, consumers worldwide are actively choosing payroll cards over other forms of payment. In fact, even though most cardholders have access to a bank account, they prefer payroll cards because of the seamless functionality, cross-functional potential, and ability to control income by distinguishing it from other finances.&nbsp;Now you know why payroll cards are a right fit for your business!When you make your employees' financial lives easier, their productivity and loyalty increase multifold. Turnover rates reduce and efficiency improves.&nbsp;Businesses employing the payroll card program have ascertained that it saves time and money, enhances security, improves payment infrastructure, and eliminates issues concerning cash disbursements.&nbsp; Most importantly, they bridge the financial inclusion gap for employees without easy access to traditional banking services. When implemented correctly, payroll cards can be an efficient tool for managing employee expenses and compensation.&nbsp;<h2 class="heading-node" id="q53px9969">How modern card issuance helps?</h2>The advantages of payroll cards are synchronous to the agility and scalability of a <a class="link" href="https://m2pfintech.com/prepaid-cards/" target="_blank">modern card issuance platform</a> catering to the gig economy and flexible working environments across the globe. The platform enables various features like seamless onboarding with an integrated identity verification solution, building multiple use cases like single-use cards, virtual cards, early salary, meal cards, shopping cards, etc., for the card users. The modern mobile-first cards offering instant limits and controls across different payment modes and transaction amounts ensure security and risk management for both employees and employers.&nbsp;Now, still wondering if payroll cards are right for you? Or are you looking for a robust payroll card program? &nbsp;You can get in touch with us at <a class="link" href="mailto:business@m2pfintech.com">business@m2pfintech.com</a>.&nbsp; We'll be happy to help.&nbsp;Looking for more nuggets of fintech wisdom?<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.

Pros and Cons of Payroll Cards

<img src="https://m2p-website-file.s3.ap-south-1.amazonaws.com/m2p-website-file/marketing-cms/m2p-blog/2022/07/MicrosoftTeams-image-9.webp" alt="M2P Fintech" title="" width="100%" height="253">The ecommerce market in India is growing at a dynamic pace. Estimated to reach $188 billion by 2025, the sector received $15 billion in investments from private equity and venture capital firms in 2021. At this rate, the Indian ecommerce industry will surpass the US to become the second largest online commerce market by 2034. Xpressbees, Amazon, Flipkart, and Cars 24 are some of the leading ecommerce firms that are making big waves with their investment and expansion plans.Rising smartphone penetration, evolving customer expectations, and convenient digital payments play a major role in the ecommerce boom. Online transactions in the Indian ecommerce ecosystem are estimated to grow by 96% to touch USD 120 billion by 2025. The growth of digital payment options such as credit cards, debit cards, prepaid cards, UPI, and BNPL added impetus to online shopping transactions.In this article, let’s decode the anatomy of payment card transactions in an ecommerce setup.Payment processing is how businesses complete credit and debit card payments. It includes authorization, funding, and settling of a transaction. For a consumer, an online card transaction is a pretty straightforward process that happens within a few seconds. All they need to do is enter the card details, and authorize the transaction with an OTP.And voila! The transaction is successful.<h2 class="heading-node" id="zpom3032i">Key Players in Ecommerce Payments</h2>While the entire transaction may only take seconds, it involves a complex network with multiple steps and players behind the scenes. Here are the players involved in carrying out a transaction.· Cardholder (customer with the payment card)· Merchant (ecommerce website)· Payment Gateway· Payment Processor· Card Network· Issuing Bank· Acquiring BankNow, we are sure you know who a cardholder and a merchant is. So, let’s take a deep look at other players and their role in card transactions.<h2 class="heading-node" id="wpqhfks61">Payment Gateway</h2>A payment gateway (PG) is a service that authorizes transactions between online businesses and their customers in a secure and convenient way. In simple terms, it acts as a secure tunnel between the merchant’s payment portal and the payment processor.<h2 class="heading-node" id="ifw2nj4oj">Role of Payment&nbsp;Gateway</h2>A payment gateway is a central cog in the transaction processing ecosystem for both online and in-store purchases. In a transaction process, PG is the front-end mechanism that collects, authenticates cardholder information, and transfers the details to the merchant’s bank in real-time. Then, the transaction is processed in the merchant’s bank. All payment gateways are PCI-DSS compliant and SSL-certified.For example, imagine you go to an online store, pile up your cart, and click on check-out for billing. When you enter your payment method and details on the website, a payment gateway helps you transfer money to the merchant.<h2 class="heading-node" id="y8i3jrc7z">Payment Processor</h2>A payment processor is a vendor service that acts as a conciliator between the financial institutions and the merchant involved. It facilitates authorization of the transactions and relays the data to clear and settle the transactions for the merchant. Some payment processing services include card acceptance, PCI compliance assistance, security solutions, and customer support.<h2 class="heading-node" id="l1mstpbl2">Role of a Payment Processor</h2>In a transaction, the payment processor acts as a tunnel between the merchant and the customer banks. It takes the information from the payment gateway and connects with the issuer through the card network to authenticate and approve the transaction. The role of the payment processor is summarized below:· Seek authorization for a transaction· Connect with the cardholder’s issuing bank· Transfer funds into a merchant account<h2 class="heading-node" id="5l1rujvkp">Card Network</h2>A card network is a card infrastructure provider that facilitates payment card transactions between the issuer and the merchant. Conventionally, the network validates, processes, and sets the terms for the card transactions. The major card networks in India are MasterCard, Visa, RuPay, Discover, and American Express.<h2 class="heading-node" id="0cnrfhxyg">Role of a Card&nbsp;Network</h2>The card network acts as a communicator between the merchant’s acquiring bank and the customer’s issuing bank. It is responsible for transmitting the transaction information to the correct issuing bank, verifying the issuer’s authentication results, and delivering responses to acquirers.<h2 class="heading-node" id="1pkqmuofu">Issuing Bank</h2>An issuing bank is a financial institution or a bank that issues and distributes (credit/debit) cards to customers. It operates as an essential intermediary between the cardholders and the card networks. Despite the common misconception, card networks do not directly issue cards to customers because of the fundamental risks involved in issuing credit to customers. Only issuing banks do.For instance, if a credit card holder does not pay off his or her debts, the issuing bank will write them off. In addition, the issuer will become responsible for recouping the costs. It is important to note that specific card networks like Discover and American Express serve as their own issuing banks.An issuing bank is typically a commercial consumer bank, commonly known as the issuers. It provides the framework to facilitate reliable and regulated transactions and the rules and standards for payments performed on its system.<h2 class="heading-node" id="2esexjmnq">Role of an Issuing&nbsp;Bank</h2>A card issuing bank is one of the key players in the card transaction and payment processes. Each time a cardholder makes a purchase/payment using a card, the transaction moves through multiple financial institutions and systems before the amount is credited to the merchant’s bank account. The issuing bank assents the transaction based on the customer’s available credit or funds in the account. Upon receiving the authentication request, the issuer’s Access Control Server (ACS) reviews the information, verifies the cardholder using their form of authentication, and responds to the merchant. It also subjects the transaction to its defined set of fraud and risk regulations.In the case of a credit card issuance, an issuing bank generally manages everything on the customer front, such as payment portals, rewards programs, payments, collections, etc. It plays a crucial role in evaluating and determining the credibility of a chargeback. For example, when a cardholder notices a counterfeit or invalid charge made to their credit or debit card, they immediately contact their issuer to file a dispute, kick-starting the chargeback process. The issuer validates the complaint and communicates the chargeback to the acquirer. The acquirer then notifies the merchant to either accept or challenge the chargeback.The issuer is responsible for authenticating the cardholders’ financial information and account data to determine their creditworthiness. Based on the assessment, it extends the line of credit to the cardholders and offers financial support for transactions/payments made with its cards. In addition, the issuing bank also renders essential services such as card activation, setting the purchase limit, suspensions, and card renewals.<h2 class="heading-node" id="p8c1kk2db">Acquiring Bank</h2>An acquiring bank is a financial institution or a bank that offers merchant accounts to businesses. These accounts enable merchants to accept direct debit/credit card payments. An acquiring bank, otherwise known as an acquirer or a merchant’s bank, is a licensed member of a card brand and is responsible for creating and maintaining the merchant’s account. It also manages the communications between card networks and businesses.Usually, the acquirer acts as a payment processor or an Independent Sales Organization (ISO) and processes credit/debit payments on behalf of a merchant. It provides merchants with unique IDs to manage card payments. In turn, the merchants pay a significant fee to the acquirer for their services in the transaction process.Transaction processes are prone to various financial frauds, that include breach of sensitive customer information. As a significant player in the payment process, an acquiring bank ensures transaction security and strictly complies with the Payment Card Industry Data Security Standard (PCI DSS). In the event of a fraud or data breach, the acquiring bank stands liable for the compromised transaction(s).<h2 class="heading-node" id="xswoi0hlp">Role of an Acquiring Bank</h2>As the merchant’s bank, acquirers are responsible for routing the payment card transactions to the appropriate issuing banks. Once the issuing bank disperses the amount from the cardholder’s account, the acquirer accepts the payment and credits the money to the merchant’s account. Furthermore, the acquiring bank exchanges fund with various issuers each time a consumer makes a purchase, returns for a refund, or raises a chargeback. It then issues a net balance (gross sales deducting the fees and reversals) to the merchant for transactions during the given period.When a cardholder uses a card in a purchase, the acquiring bank will either accept or decline the transaction based on the card holder’s account information available on the issuing bank and card network’s database. This process entails two steps.Step 1: Authorization — Request the issuer to validate the card details. If sufficient funds are available in the account, the transaction will be completed.Step 2: Authentication — Verify cardholders’ identity based on the card details entered during the purchase. The authentication process is typically carried out using 3D Secure (3DS).<h2 class="heading-node" id="rdmedr6bw">Payment Processing Workflow&nbsp;</h2>All the parties delved upon above are integral players in the card transaction ecosystem. Transactions would not be viable without any one of them.Curious to know how payment card transaction flow works?Let’s take the example of a credit card payment for instance.Here you go!<ol class="list-node" id="nuiohlbzx"><li>The customer initiates a purchase. The purchase can be made in person, online, or over the phone.</li><li>The merchant evaluates the credit card details entered during the purchase and routes the information to the payment gateway.</li><li>The payment gateway routes information to the payment processor.</li><li>The payment processor communicates the authorization request to the appropriate card network.</li><li>The credit card network routes the request to the cardholder’s issuer.</li><li>The issuer validates the received information and approves/declines the transaction.</li><li>The card network sends the issuer’s response to the acquiring bank.</li><li>The acquiring bank redirects the authorization response to the merchant.</li><li>Based on the response, the merchant accepts or declines the transaction. It deposits all the authorized transactions with the acquiring bank.</li><li>The acquirer credits the merchant’s account and submits the transactions to the credit card network for payment.</li><li>The credit card network pays the acquirer and charges the issuing bank.</li><li>The issuer posts the transaction to the cardholder’s account.</li><li>The cardholder receives the monthly statement and makes payment.</li></ol><img src="https://m2p-website-file.s3.ap-south-1.amazonaws.com/m2p-website-file/marketing-cms/m2p-blog/2022/07/Banner-for-Issuing-and-Acquiring-Banks-blog_2.webp" alt="M2P Fintech" title="" id="lpb5e7uta" width="100%" height="253">Payment processing is an indispensable part of any business, both online and offline. In the stride toward a digital economy, ecommerce payment processing is a modish necessity.Intrigued? To know more about payment processing, write to us at <a class="link markup--anchor markup--p-anchor" href="mailto:business@m2pfintech.com" target="_blank" rel="noreferrer noopener">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.

Anatomy of Payment Card Transactions in Ecommerce

<img src="https://m2p-website-file.s3.ap-south-1.amazonaws.com/m2p-website-file/marketing-cms/m2p-blog/2022/07/Creative-AePS-Blog-03.webp" alt="M2P Fintech" title="" width="100%" height="253">Over 85% of bank accounts in India are inactive.Research shows that the inactive accounts can be attributed to the issues faced by the underserved populace across remote corners of the country.<blockquote class="block-node" id="vrcfnudss">Bringing the underbanked and unbanked population into mainstream financial services is crucial for&nbsp;<a class="link au lm" href="https://m2pfintech.com/blog/fintech-a-catalyst-for-financial-inclusion/" target="_blank" rel="noopener ugc nofollow">financial inclusion</a>, the foundation of economic growth.</blockquote>Digital payment modes such as mobile wallets,&nbsp;<a class="link au lm" href="https://m2pfintech.com/blog/upi-the-driver-of-economic-growth-and-inclusion/" target="_blank" rel="noopener ugc nofollow">UPI</a>, contactless, payment cards, and QR codes have enabled universal access to financial services. But they still leave a gap for senior citizens, underprivileged, and inerudite sections of the society. These sections find it challenging to buy a smartphone or a payment card or even remember a passcode or PIN. Thus it becomes harder for them to join the digital Indian ecosystem.To resolve these challenges and to enable people from all walks of life to benefit from digital financial services, Aadhaar enabled Payment System (AePS) was brought into existence.Before diving in to know more about AePS, let’s have a quick look at what Aadhaar is and how it helps financial inclusion.<h2 class="heading-node" id="0c61">Aadhaar, driving inclusivity, and benefits</h2>Aadhaar is a 12-digit individual identification number issued by the UIDAI (Unique Identification Authority of India) on behalf of the Indian Government. In India, the Aadhaar number serves as a proof of identity and address. Any citizen of India is eligible to apply for Aadhaar Card. They can receive it via India Post, and as an e-Aadhaar downloaded from the UIDAI website.Aadhaar, the world’s largest biometric ID system, has been a crucial enabler of inclusive financial services in India. It captures fingerprints, retinal scans, and facial identification as chief authentication factors for transactions. So, the bank customer need not carry a smartphone or a payment card, or remember PINs and passwords.<blockquote class="block-node" id="vqdwnw2pm">More than 131 crore adults registered with Aadhaar have seamless access to banking services, insurance, and direct benefit transfers from over 700 financial inclusion schemes announced by the central and state governments.India’s financial inclusion index stands at 53.9, which is an impressive display of inclusivity brought about by Aadhaar.</blockquote>Aadhaar leverages advanced technology for transparent and targeted delivery of financial services, benefits, and subsidies without the hassle of intermediaries. Aadhaar saved the Indian government ₹2.25 lakh crores in Direct Benefit Transfers (DBT) by getting rid of fake beneficiaries and routing benefits to deserving people.<h2 class="heading-node" id="aab1">What is AePS?</h2>Aadhaar enabled Payment System (AePS) is a payment system that facilitates interoperable digital financial transactions through Aadhaar card-based verification (quick eKYC). It uses a Unique Identification Number or the Aadhaar number to make transactions effortlessly. Serving as a simple, secure, and user-friendly platform, AePS helps blue-collared workers, senior citizens, and the underprivileged to benefit from cashless transactions.AePS is a bank-led model, and any Indian resident can utilize the service just with their Aadhaar number that is linked to their bank account — Aadhaar Enabled Bank Account (AEBA). The Aadhaar enabled Payment System allows online transactions to take place at PoS (Micro ATM)/Kiosk/mobile devices through the Business Correspondent (BC) of any bank using Aadhaar authentication.Leveraging AePS, banks can empower all segments of society by increasing user-friendly access to cash deposits, payments, money transfers, and withdrawals. AePS use cases are accessible at any biometric-enabled touchpoint, viz., all-in-one integrated devices, mobiles/PCs/tablets, or any accessories that meet the technical specifications defined by UIDAI. By enabling AePS solutions, banks can enable seed status checks for direct benefit transfers, social security pensions and government subsidies.<h2 class="heading-node" id="f55b">What are the requirements for AePS transactions?</h2>AePS does not need a smartphone, document, or payment card. It only requires the customer to link the Aadhaar card to the bank account to capture the following info.<ul class="list-node" id="3lglglm5z"><li>Aadhaar Number</li><li>Biometrics-fingerprint identification</li><li>Name or Bank Issuer Identification Number (IIN)</li></ul>If not, just remembering the last four digits of the Aadhaar number will do. The Business Correspondent with an AePS machine or Micro ATM on assisted mode should be able to do any transaction for the customer.<h2 class="heading-node" id="ab00">Key objectives</h2>The main objective of AePS is to use Aadhaar number/ Virtual Identity to access AEBA for banking transactions through Business Correspondents (BC).It also aims to:<ul class="list-node" id="n7aofhjeh"><li>Securely facilitate&nbsp;<a class="link au lm" href="https://m2pfintech.com/blog/why-payments-interoperability-is-a-must-for-todays-generation/" target="_blank" rel="noopener ugc nofollow">interoperability</a></li><li>Enable quick eKYC services</li><li>Electronify retail payments as per RBI regulations</li><li>Build a full range of Aadhaar enabled Banking Services</li><li>Improve financial inclusion in India (According to the goals of GoI and RBI)</li><li>Enable intrabank and interbank transactions through a central switching &amp; clearing agency</li><li>Empower bank customers to use Aadhaar for banking transactions</li></ul>In addition, AePS helps deliver Government disbursements like NREGA, social security pension, and handicapped old age pension.<h2 class="heading-node" id="8be7">AEBA services</h2>With the help of AEBA (Aadhaar Enabled Bank Account), banks can offer the following services.<ul class="list-node" id="hakcr4xsc"><li>Cash Deposit</li><li>Balance Enquiry</li><li>Purchase</li><li>Cash Withdrawal</li><li>Mini Statement</li><li>Aadhaar to Aadhaar Fund Transfer</li><li>eKYC</li><li>Best Finger Detection</li><li>Demographic Authentication</li><li>Aadhaar Seeding Status</li><li>Self-Help Group (SHG) Transaction</li><li>BHIM Aadhaar Pay</li><li>Authentication</li></ul><h2 class="heading-node" id="7a75">How can customers use AePS?</h2>Customers can make AePS transactions in two ways.<ul class="list-node" id="uxpw6ofk8"><li>Through Business Correspondents&nbsp;— who usually represent the banks or entities. They are equipped with Micro ATM devices for facilitating customer transactions.</li><li>Through BHIM Aadhaar Pay at merchant locations&nbsp;— where the customer can make payments just by using Aadhaar number/VID and verify their identity using biometrics.</li></ul><h2 class="heading-node" id="614d">5 steps to perform an AePS transaction</h2>The steps below will guide customers to perform an AePS transaction easily.<ol class="list-node" id="9kqme9bxs"><li>Visit an ATM or contact a banking representative</li><li>Enter the 12-digit Aadhaar number and bank account number in the PoS machine</li><li>Choose a transaction type from the list- cash deposit, mini statement, withdrawal, balance enquiry, or fund transfer</li><li>Enter the transaction amount</li><li>Verify identity using biometrics (iris scan, fingerprint, or face recognition)</li></ol>Once all this is done properly, the transaction will be completed, and you can collect your receipt.<h2 class="heading-node" id="f14e">Why and how can banks and merchants offer AePS?</h2>For BanksBanks can reap the following benefits by offering AePS to their customers.<ul class="list-node" id="63zbggip1"><li>Reach more customers by engaging with Business Correspondent</li><li>Cut costs by leveraging digitization and reducing the printing of cheques and payment cards</li><li>Save time and money using a Business Correspondent instead of brick and mortar branches</li><li>Enable smooth interoperability among banks</li><li>Establish a quick and easy paperless KYC</li></ul>When banks wish to offer AePS to their customers, they just have to apply with NPCI / UIDAI. Then, they will be permitted to deliver AePS after the vetting and application process is completed.For MerchantsMerchants can accept AePS for cost-effective and inclusive payments. This will help them widen their customer base. Merchants can offer AePS by just applying to an authorized bank. After this, they can then receive digital payments for goods and services that are delivered from their customers.<h2 class="heading-node" id="1574">Greater security, trust, and inclusion</h2>When banks and merchants offer AePS, their customers can easily transact just with biometric authentication, either a face recognition, iris scan, or fingerprint identification. All these three aspects can never be forged, ensuring secure transactions.Banks and merchants can gain more customers through AePS as transactions can happen without the need of a physical card, passbook, smartphone or any other document. This will improve customer trust and confidence to make transactions in rural areas, especially among the underbanked segments. Banks across India are attributing enhanced revenue and cost-cutting to AePS offering.Want to add AePS to your payment ecosystem? Write to us at&nbsp;<a class="link au lm" 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.

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