Building Infrastructure for Financial Innovation: Why We Invested in YAP

Building Infrastructure for Financial Innovation: Why We Invested in YAP

Image credit: Inc42

In the past 5 years, consumers have increasingly embraced digital/tech businesses in almost all walks of their life – be it consumption (e-commerce), mobility (cab aggregators), entertainment (Over The Top or OTT services) as well as to address their financial needs. The pace of digitisation in financial services in India has been rapid thanks to the pathbreaking work done by the Government and Regulators in building and promoting underlying public infrastructure rails such as the India Stack and Unified Payments Interface (UPI).  

Today, financial services growth in India is driven by:

  • Rapid tech adoption by licensed banks and financial institutions to cater to their customers who are moving online
  • The burgeoning fintech sector that focuses on improving customer experience and/or caters to under-served customer segments
  • Large digital/tech businesses that are embedding financial products & services on their platforms for their customers & vendors

The ecosystem is very symbiotic with all three of these constituents working closely with each other and bringing their strengths to better serve their customers – large businesses and fintechs have high customer engagement and user-friendly UI/UX; banks and financial institutions bring deep domain knowledge, products expertise, customer trust and, where applicable, the regulatory permissions needed to provide financial services.

A crucial component of this booming ecosystem is enabling the ‘pipes’, or the ‘infrastructure rails’ that allow these three constituents to seamlessly work with each other.

“As I expand my service offerings, I want to provide my customers with a plethora of financial services such as simple to use bank accounts, credit cards and ability to make bank deposits  – all in a user-friendly manner within my app. Building backend integrations with banks require deep tech capabilities and takes months. Customers also often demand products from different banks requiring me to integrate with multiple banking partners” – Founder of a Neo-bank that offers credit, banking and investment products to retail consumers and MSMEs.

“We are focused on user experience and customer retention. We are constantly thinking of new use cases and ways to serve our customers across all their financial needs as seamlessly woven into their daily routine life as possible. To achieve this, we need deep integration and real-time execution with our partner banks” – Founder of one of India’s largest Digital Consumer Credit Companies.

Through its wide-ranging Application Programming Interface (API) libraries, the YAP platform allows businesses to connect with licensed banks, financial institutions and financial infrastructure such as UPI/ card networks. A business can plug into YAP’s platform, pick and choose products and banking partners and roll out financial products to its customers or vendors within a few weeks. Further, YAP manages important ongoing functions such as reconciliations and monitoring compliance.  

A “bank in a box” service, YAP’s modular platform allows its clients to offer products such as opening bank accounts, credit, making online deposits, issuing cards, online payments, cashless travel, toll payments, foreign exchange solutions & much more.

Taking away all the complications of managing financial products, YAP enables businesses to focus on their customer experience and core business. In the absence of such a service, businesses would require deep financial domain knowledge, tech resources and numerous iterations integrating with banks/ financial institutions which often take 6-8 months. YAP also works with its clients to create custom financial use cases to simplify their core business operations – for example, a concierge service/ delivery platform through YAP can use pre-paid cards to reimburse their delivery agents/ riders thereby eliminating the hassle and risk of using cash.

The company also works with banks and other financial institutions to develop new use cases and test new products thereby enhancing their capabilities to serve ‘new store fronts’.

YAP’s products are utilised by 50+ businesses in India including large tech businesses such as Ola, Paisa Bazaar, Cred, Niyo, Open. YAP also works with 8+ banks in India including leading banks such as ICICI Bank, RBL, SBM, Yes Bank and Equitas.

As consumers continue to adopt digital technology for their consumption needs, their financial behaviour will also become more digital and embedded within their consumption journey. We believe, in the near future, digital tech businesses, fintechs and new-age banks will become providers of financial products at a massive scale reaching customers that were harder to reach earlier and providing real-time financial solutions to their customers in a cost-efficient manner.

At Omidyar Network India, we believe that Digital Enablers such as YAP can catalyze financial inclusion and drive usage of financial products across the Next Half Billion. YAP’s vision ‘to make every company a fintech’ closely aligns with our mission at Omidyar Network India and we are excited to partner with YAP in their journey.  

And that is Why We invested in YAP.