How to implement the best Prepaid Payment Instrument (PPI) for your business?

Embedded Finance 101: The bridge connecting tech and financial services

Future of Digital Payments: Matched With Industry Needs

<img src="https://m2p-website-file.s3.ap-south-1.amazonaws.com/m2p-website-file/marketing-cms/m2p-blog/2022/04/banner1251-12.webp" alt="M2P Fintech" title="" width="100%" height="662"><a class="link" href="https://m2pfintech.com/blog/neo-banking-101-all-you-need-to-know/">Neo banks</a> deliver digital banking services on steroids. The digital empowerment and financial possibilities they offer the underbanked and unbanked population are phenomenal. Their ability to foster <a class="link" href="https://m2pfintech.com/blog/fintech-a-catalyst-for-financial-inclusion/">financial inclusion</a> with digitized convenience, lower cost, and personalized customer experiences are a few of the primary reasons for the success of <a class="link" href="https://m2pfintech.com/blog/top-14-neo-banks-that-reinvent-banking-experience-in-india/">neo banks in India</a>.Competing heavily on customer-centricity and deep tech, neo banks bridge the experiential gap between traditional banking services and evolving customer expectations. Free from legacy infrastructure hurdles, complex value chains, and stringent regulatory requirements, neo banks deliver super-fast, mobile-first services by leveraging advanced, agile, and lean business models.In the next five years, the global neo bank market is slated to grow at 47.1% and hit $333.4 billion market size. In India too, neo banks are a thriving industry with a huge market potential of over 190 million unbanked/underbanked people who still need access to basic financial services.So, if you are looking to set foot in the <a class="link" href="https://m2pfintech.com/blog/neo-banking-the-rise-of-new-age-banking/">neo banking</a> industry, this is the opportune time for you.We are here to help you with step-by-step guidance.Now, this is not unqualified guidance. We have immense experience and expertise in enabling neo banking services for leading players like Zenpay, Niyo, and Finin.Let’s get started!<ul class="list-node" id="4te59z1wy"><li>Step 1:&nbsp;Define target audience &amp; value proposition</li><li>Step 2:&nbsp;Identify and analyze audience pain points</li><li>Step 3:&nbsp;Work on innovative, customer-centric strategies</li><li>Step 4:&nbsp;Build a strong core and backend infrastructure</li><li>Step 5:&nbsp;Focus on experience design</li><li>Step 6:&nbsp;Manage compliance and security</li><li>Step 7:&nbsp;Ease onboarding, engagement, and marketing</li></ul>Fasten your seat belts!<h2 class="heading-node" id="958f" style="text-align: justify">Step 1: Define target audience &amp; value proposition</h2><a class="link" href="https://m2pfintech.com/blog/top-14-neo-banks-that-reinvent-banking-experience-in-india/">Neo banks</a> challenge the status quo of banking and payments for niche audiences. Hence defining that target audience is imperative to set up a neo bank.For example, neo banks like FamPay&nbsp;cater to teenagers, and&nbsp;Zenpay&nbsp;caters to blue-collared workers. FamPay’s proposition comprises cards and bank accounts that teenagers can use under parental supervision. Whereas Zenpay offers payroll cards that provide blue-collared workers instant access to salary and incentives.So, you need a crystal-clear understanding of your audience demographic and pain points to develop a value proposition accordingly. This will help you come up with a definitive reason why your customers should choose you.<h2 class="heading-node" id="9b55" style="text-align: justify">Step 2: Identify and analyze audience pain points</h2>Once your target audience is clearly defined, identify and analyze your target audience’s needs and pain points. This knowledge will help you include features that resolve audience issues, build trust and attract the right customer to your service. For example, Zenpay came at a time when the blue-collared workers were underbanked and were not able to access salaries and track their spending. The lack of access to salary accounts and other financial exclusion was the pain point for Zenpay’s audience. And their value proposition and services sought to resolve the challenge.Looking at your target audience’s pain points and working to close the gaps is a key step while setting up a neo bank. This knowledge will help you differentiate and stand apart from other players in the industry.<h2 class="heading-node" id="9050" style="text-align: justify">Step 3: Work on innovative, customer-centric strategies</h2>Neo banks stand apart because of their agile, innovative, customer-centric business strategy. Leverage technology to make your business model and strategy as convenient and user-centric as possible. Pack in unique features that will get your customers coming back to you.When it comes to features, some are must-have, and others are nice-to-have types. Must-have features are a necessity, without which the product or service will surely fail. Nice-to-have features are those that will add greater value and aid greater customer acquisition and retention.Here are some examples for more clarity.<h2 class="heading-node" id="7961" style="text-align: justify">Must-have features</h2><ul class="list-node" id="rcccmzkkk"><li>Low-cost structure</li><li>Easy money flow across borders</li><li>Quick account creation</li><li>User-friendly Interface</li><li>Real-time banking solution</li><li>High yield savings</li><li>Personalized card issuance (Physical/Virtual)</li></ul><h2 class="heading-node" id="b571" style="text-align: justify">Nice-to-have features</h2><ul class="list-node" id="zqdexn79o"><li>Zero joining fee</li><li>Zero annual Fee</li><li>Zero hidden Charges</li><li>Zero documentation</li><li>No-cost EMI</li><li>Personalized banking services</li><li>Educational loans/investments</li><li>Seamless budgeting</li><li>Tangible rewards</li></ul>With advanced technologies such as Artificial Intelligence and Machine Learning ruling the neo banking industry, you can include new features, upgrades, and everything your target audience expects without any hassles.<h2 class="heading-node" id="b472" style="text-align: justify">Step 4: Build a strong core and back-end infrastructure</h2>A robust neo banking app demands the best suite of core and back-end applications. As it has to deftly manage multiple applications and transactions without lags, the core and back-end infrastructure must be powerful enough. To build a strong neo banking app, you need <a class="link" href="https://m2pfintech.com/blog/api-the-power-that-drives-new-age-banking-ecosystems/">APIs</a>, a card processing app, and back-office tools.<ul class="list-node" id="fg87tfapd"><li>API:&nbsp;To connect your neo bank app with other services like payment gateway or authentication segment.</li><li><a class="link" href="https://m2pfintech.com/blog/credit-card-processing-a-definitive-guide/">Card Processing App</a>:&nbsp;This&nbsp;app is responsible for all the transactions or anything related to cards.</li><li>Back-office Tools:&nbsp;Manages the neo bank in the whole perspective.</li></ul><img src="https://miro.medium.com/max/1400/1*hYBMUudyKsAoH36Za4l89Q.png" alt="Backend infrastructure framework to create Neobanks" title="" width="100%" height="529">The back-end infrastructure can be built in three different ways.<h3 class="heading-node" id="e1a9" style="text-align: justify">1. Developing from scratch</h3>You require a banking license and a huge investment of time, effort, and money, as you are developing infrastructure, design, implementation, tech stack, and also the future sketch by yourself.<h3 class="heading-node" id="822d" style="text-align: justify">2. Partnering with banks</h3>To minimize the time and effort, you can integrate with established banks and get your neo banking model started. It also does not require much work in terms of customer acquisition as you can leverage the bank’s trusted customers, to begin with.<h3 class="heading-node" id="94bc" style="text-align: justify">3. Partnering with <a class="link" href="https://blog.m2pfintech.com/wp-admin/post.php?post=2422&amp;action=edit">BaaS</a>/API Provider</h3>You can partner with fintech companies to provide <a class="link" href="https://m2pfintech.com/blog/api-the-power-that-drives-new-age-banking-ecosystems/">APIs</a> to develop the core and bank end infrastructure for your neo bank. This decision with catapult your go-to-market speed to the next level with lower investment in terms of time and effort.For example, fintech firms like&nbsp;<a class="link au mu" href="https://m2pfintech.com/" target="_blank" rel="noopener ugc nofollow">M2P</a> power neo banking apps by delivering tech stacks and best-in-class infrastructure to build customized products with seamless integration. We serve as an account aggregator of multiple banks and help neo banks leverage our partnerships and compliance to its best potential.When it comes to card transactions, we take care of webhook notifications, reconciliation settlement, and even customer reports. For some of our neo banking customers, we also created co-branded debit cards with banks. We help them design their own debit card with features like multiple controls (PIN), lock/unlock cards, security measures, setting preferences, virtual cards, and more.In India, neo banks do not work independently. Hence partnering with the right banks and API providers is critical to increase go-to-market speed and achieve growth and profitability.<h2 class="heading-node" id="fbc3" style="text-align: justify">Step 5: Focus on experience design</h2>Humanizing transactions and enabling personalized experiences is key for the success of a neo banking app. To that end, you need to prioritize experience design for visually appealing app design and easy-to-understand interfaces and clear call-to-action.Experience design enables frictionless navigation and improves customer experience by focusing on speed, convenience, security, and seamlessness. Ensure your neo banking apps are aesthetically designed for a smooth customer journey and satisfaction.<h3 class="heading-node" id="a249" style="text-align: justify">Step 6: Manage compliance and security</h3>Better the security, better the trust!Regulatory compliance and security infrastructure design play a significant role in neo banks, as customer data and money are at stake here. Managing <a class="link" href="https://m2pfintech.com/blog/pci-dss-the-payments-armour/">PCI DSS compliance</a>, <a class="link" href="https://m2pfintech.com/blog/how-does-payment-tokenization-work/">tokenization</a>, the generation and issuance of payment tokens, and the operation and maintenance of a token vault is a laborious yet critical process.Hence, start with setting up the Security Office Center (SOC), which will function as a command center for your neo bank app. This helps you in analyzing every crumb of information in your infrastructure. You can even implement Security Information and Event Management (SIEM) software solution to secure and analyze every activity in your neo bank.You can even go the extra mile by building your own security tools and solution to protect customer data. It is highly advisable to maintain access logs or anything happening in your neo bank platform to have a record for your security team to look into any time in the future.Before stepping onto the deployment stage of your neo bank, run a series of checks and automated tests to identify and get rid of the issues. Think of every possibility your user may utilize your app for. Here’s a series of tests you can opt for:<ul class="list-node" id="yk7tuv0ut"><li>Unit-testing</li><li>Integration testing</li><li>Security testing</li><li>User acceptance testing</li><li>Regression testing</li></ul>Ensure your team runs the tests even after the app goes live because this lowers the chance of your app facing security issues later. Automating the tests by implementing a custom infrastructure helps in this case.Fuse security onto DevOps — <a class="link" href="https://m2pfintech.com/blog/devsecops-the-future-of-financial-software-development/">DevSecOps</a> to develop your neo bank application. At the time of upgrades and new releases, you can go to market quickly and seamlessly.<h2 class="heading-node" id="ecd2" style="text-align: justify">Step 7: Ease onboarding, engagement, and marketing</h2>Don’t just sit back after launching your neo bank. Your journey has only begun.Ensure onboarding is simple, smooth, and effortless for customers. Focus on marketing efforts to acquire and retain customers. Ensure you engage your customer throughout their journey with your neo bank.Remember, the profitability of your neo bank can be determined by the customer Life-Time Value (LTV)/ Customer Acquisition Cost (CAC) ratio. The higher the LTV/CAC ratio, the greater will be the income generated per new customer. So, the key is to keep your customers happy.All set to start your own Neo bank? Got more questions in your mind?Ping us at&nbsp;business@m2pfintech.com.<a class="link" href="https://m2pfintech.com/newsletter/">Subscribe</a>&nbsp;to our newsletter and get the latest fintech news, views, and insights, directly to your inbox. Follow us on&nbsp;<a class="link" href="https://www.linkedin.com/company/m2pfintech/mycompany/">LinkedIn</a>&nbsp;and&nbsp;<a class="link" href="https://twitter.com/m2pfintech">Twitter</a>&nbsp;for insightful fintech tales curated for curious minds like you.

7 steps to start a Neo bank from scratch

<img src="https://m2p-website-file.s3.ap-south-1.amazonaws.com/m2p-website-file/marketing-cms/m2p-blog/2022/06/Bring-to-me-Blog_31May21-2.webp" alt="M2P Fintech" title="" width="100%" height="358">Brian was a kid who loved bedtime stories, and every day his mother picked a new book for his bedtime story. One day, his mother read him the Japanese folktale “The Magic Mortar.” In this folktale, the magic mortar gave whatever its owner wished for until he says stop. Brian was mighty impressed and wanted one for him. The very next day, he saw his mother ordering groceries from an app, and he wanted to know how it works. When explained, Brian exclaimed that the app is the magic mortar he was looking for.Pretty interesting, isn’t it?Little did we realize that we all have a magical tool in our pockets to make our lives easier. We can enjoy the comfort of our home and make everything reach our front door.Yes, you are thinking it right. It is called — ‘Bring it to me’ or simply ‘to Me’ economy.<h2 class="heading-node" id="7a46" style="text-align: justify">So, what exactly is the ‘Bring it to me’ economy?</h2>The products and services are right at your doorstep instead of you getting in your car and going to the store every time. Starting right from fertilizers for your garden to vegetables for sumptuous cooking, you get every item online.Furthermore, ‘time’ has become a valuable currency and today’s customers are willing to bear the cost if it reduces their workload. Also, businesses have started realizing that they need to go a step beyond the digital realm to retain customers. So, front door delivery options have become the new normal.<h2 class="heading-node" id="836f" style="text-align: justify">The Role of Technology</h2>On the other hand, silently, our economy is moving ahead with a plethora of advancements and innovations. Technology is the leading player that drives the rapid economic growth of every country, including ours. With the cool trends springing up every day, shoppers expect more like same-day delivery and technology inclusion into their lifestyle.(i) Financial TechnologyFintech’s biggest contribution to this evolution is the digital money transfer services, as economic growth is highly connected with <a class="link" href="https://m2pfintech.com/blog/fintech-a-catalyst-for-financial-inclusion/">financial inclusion.</a> Digital wallets were a huge hit to pull many customers to ‘bring it to me’ economy lifestyle. They are widely accepted right from a street vendor to huge shopping centers, which make their transactions quicker. Mobile payment apps and gateways help in hassle-free and secure money flow during transactions. They also assist in tracking and analyzing the customer’s spending habits and preferences to bring matching products and advertisements.<a class="link" href="https://m2pfintech.com/blog/bnpl-the-rising-fintech-star/">BNPL (Buy Now Pay Later)</a> gives the customer the comfort of purchasing their desired products anytime with the ‘pay later’ option. Even Fintechs can now customize loans and insurance for the assistants helping in delivery service. Thus, fintechs helps businesses in building a friendly and personalized approach to the customers.(ii) Artificial Intelligence &amp; Machine Learning TechnologyMany grocers and FMCG companies have started incorporating AI &amp; ML technologies to capture their target segment. The virtual fitting room is the buzz during this pandemic. A customer can virtually try on clothes, accessories, shoes, or watches and check if it fits them in a 360-degree view. Even the shoppers can visualize a 3D furniture model to check if it fits their environment and space before making an order. So, there is a virtual solution to everything using artificial intelligence and augmented reality technologies in today’s digital world.Delivery models like Autonomous ground vehicles (AGVs) with lockers, droids, and drones are state-of-the-art in the regular delivery service with their super-fast and reliable features. AGVs with lockers boost the delivery system even on Sundays and late nights, where human effort is least expected. On the other hand, drones will help in reaching the product (up to 15kg) in the rural areas at a relatively high average speed. Droids are small autonomous vehicles that relatively travel slowly on the sidewalks for doorstep delivery. With these innovations, we are on the way to reduce human intervention in delivery systems.(iii) Blockchain TechnologyBlockchain technology guards the customers’ information involved in the process and avoids any digital breaches and other cyber-attacks due to its centralized nature. It builds the customers’ trust in their privacy and the security of digital assets. It also increases sales and streamlines payment processing with high efficiency.<h2 class="heading-node" id="22e8" style="text-align: justify">What awaits us in the future?</h2>The ‘Bring it to me’ economy has gained its popularity by bringing services home. Be it personal grooming or professional cleaning, or any other service; the customers are ready to avail them.Nowadays, people are redefining their satisfaction based on memorable experiences and interactions. Businesses need to put their heart and soul into providing their best customer experience to reinforce and market their brand digitally.Be it a simple emoji that brings a smile or the level of service offered, businesses are now in a race against themselves to turn their products and customers as their brand ambassadors because the end is not the supermarket shelves but the customer’s doorstep.<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.

‘Bring It To Me’ Economy: A Touch of Digital Magic

<img src="https://m2p-website-file.s3.ap-south-1.amazonaws.com/m2p-website-file/marketing-cms/m2p-blog/2022/05/banner-4.webp" alt="M2P Fintech" title="" width="100%" height="284">A product developer and coder at heart, Naren Viswanath is our AVP- Product Development. A die-hard fan of Game of Thrones and Breaking Bad, Naren is a quintessential character who loves playing chess and video games.<h2 class="heading-node" id="8655">What happens in your typical day at M2P?</h2>I start my day by checking emails, and any actions to be taken will be pinned for review and response. I will prioritize the tasks for the day and begin to work on them. I review pull requests and approve tickets if needed. Sometimes, I seek advice on tasks or related to the projects, join meetings with clients or internal to discuss problems, and arrive at solutions. Every alternate day everyone on the development team will get on a call to discuss tasks we are working on, achieved, blocker which needs help, etc. At various points, we will ship code to UAT with new features or fixes.<h2 class="heading-node" id="1140">Have you always wanted to be a developer?</h2>Yes, I started learning programming in 5th grade, started with (C, C++). My mom was the principal of my school at that time. Usually, she will be the last person to leave. I would wait for her in the computer lab. And as I was fond of playing video games since childhood, the computer lab was my playground. One day, a teacher noticed me lingering in the lab and wanted to know what mischief I was up to. When he noticed my interest, he taught me C language instead, which ignited my passion for programming. I still remember my first program. It was a telephone directory with details of my family members who can be looked up using names.<h2 class="heading-node" id="d606">If you had your heart set on being a developer, how did fintech and <a class="link" href="https://m2pfintech.com/">M2P</a> become a part of it?</h2>I started my career at IBM, but I had a desire to work in a startup that does not restrict my role only to specific tasks. So, I was on a secret lookout for the same where I would be able to develop my skills in a well-rounded manner. That’s when a friend of mine, who is a co-founder of an App Development company, referred me to Muthu (Co-Founder — M2P), and the rest, as they say, is history. Also, I was a complete novice in fintech before I joined M2P. With the help of founders and seniors, I have learned a lot related to FinTech. In short, what I get here at<a class="link" href="https://m2pfintech.com/"> M2P</a> is conceptual knowledge, not procedural.<h2 class="heading-node" id="31cb">Has COVID altered your working style?</h2>Yes, No one would have expected 100% working remotely, but we pulled it off. The number of meetings and calls is up, and we have been before our screens more than usual. So, I block my calendar sometimes for intensive coding sessions that help me maintain focus. Also, recently I came down with Covid, and the team supported me all the way when I was recovering.<h2 class="heading-node" id="92b7">What are your other interests?</h2>I love to play chess, table tennis, video games, and watch YouTube, Netflix. I am a huge fan of the Game of Thrones, Breaking Bad, Silicon Valley, and Suits series.<h2 class="heading-node" id="3b9a">Have you played a practical joke in college?</h2>Of course, I did. Once, we texted our entire department to come in black attire, which was (to show opposition to the ruling party that time) as a joke, but everyone got called to the principal’s office, and it got myself and my friends suspended. It was one of those pranks that had horribly gone wrong!<h2 class="heading-node" id="0dde">What’s that one thing your colleagues don’t know about you?</h2>I’m a left-handed person. Most people only notice when I write.<h2 class="heading-node" id="8701">What will you love to build/develop in case you have unlimited resources and time?</h2>As a fan of Elon Musk, I would love to build and develop electric vehicles, solar homes, etc., which average Indians can afford.<a class="link" href="https://m2pfintech.com/newsletter/">Subscribe</a>&nbsp;to our newsletter and get the latest fintech news, views, and insights, directly to your inbox. Follow us on&nbsp;<a class="link" href="https://www.linkedin.com/company/m2pfintech/mycompany/">LinkedIn</a>&nbsp;and&nbsp;<a class="link" href="https://twitter.com/m2pfintech">Twitter</a>&nbsp;for insightful fintech tales curated for curious minds like you.

Meet M2P’s Code Expert

<img src="https://m2p-website-file.s3.ap-south-1.amazonaws.com/m2p-website-file/marketing-cms/m2p-blog/2022/04/banner1251-6-1.webp" alt="M2P Fintech" title="" id="t5u9jgsxm" width="100%" height="317">The advent of international payments has been long-standing in the financial world, facilitating commerce and trade. Be it sending money back home or international business contracts, today’s rising global commerce can be attributed to the growing volume of international digital <a class="link" href="https://m2pfintech.com/blog/future-of-payments-processing-matched-with-industry-needs/">payments</a>.It is a valuable ally for businesses and individuals who wish to enjoy commerce or transactions across borders. The surge in cross-border B2B payments is exponential since the penetration of the internet. With predictions of 30% growth in the next three years, cross-border e-commerce has taken off to exponential heights in these 2 years.Also, the businesses that offer software as a Service (SaaS) heavily depend on cross-border payments as their demographic is spread across the globe. In recent years, these players have played a monumental part in increasing the volume of cross-border transactions.The advancements in Fintech today empower many businesses and individuals to make instant payments. Businesses can experience stress-free invoicing, tax handling, and recurring billing in a few clicks. They also have access to top-notch support portals to handle any issues that arise out of a transaction.Fintech companies experiment with technologies like <a class="link" href="https://m2pfintech.com/blog/blockchain-and-fintech-use-cases-and-applications/">Blockchain</a> to bring more transparency and Artificial Intelligence for better regulatory compliance.<h2 class="heading-node" id="2511" style="text-align: justify">What are cross border payments?</h2>Cross border payments happen when the payee and the recipient are in different countries. These transactions can be retail, wholesale or recurring in nature. Decades back, the electronic messaging system served as a crucial mode to enable cross border payments.The cross border payments industry now utilizes many payment modes like <a class="link" href="https://m2pfintech.com/blog/credit-card-processing-a-definitive-guide/">credit cards</a>, cross-border <a class="link" href="https://m2pfintech.com/blog/what-is-a-payment-gateway-and-payment-switch-understanding-the-basics-of-payments-architecture/">payment gateways</a>, <a class="link" href="https://m2pfintech.com/blog/tale-of-money-transfers-from-hawala-to-one-click-remittances/">wire transfers</a>, e-wallet, distributed ledger technology, <a class="link" href="https://m2pfintech.com/blog/api-the-power-that-drives-new-age-banking-ecosystems/">APIs,</a> etc., every day to facilitate international payments.<h3 class="heading-node" id="d1xc42b0j" style="text-align: justify">Cross-border payment methods</h3>In fact, we can classify cross-border payment methods as Past, Present, and Near Future, where every advancement is an incremental leap in payment facilitation and user experience.<img src="https://m2p-website-file.s3.ap-south-1.amazonaws.com//m2p-website-file/marekting-cms/m2p-blog/2025/05/1-1.webp" alt="Cross border payment" title="" id="py8ljf39p" width="100%" height="253">The Past<h3 class="heading-node" id="8e54" style="text-align: justify">Wire transfer</h3>It is an electronic transfer of money, where the money is ‘wired’ from one account to another. If you are initiating a domestic transfer, it is called a “Bank wire.” In the case of cross-border payment, wire transfer is interchangeably referred to as “Remittances.” It is the oldest method of initiating a cross-border payment.<h3 class="heading-node" id="c67b" style="text-align: justify">How does it work?</h3>Here the payee visits their designated branch and provides the details of the receiver. Those details include the bank account number, name, recipient country’s currency, SWIFT code, IBAN (International Bank Account Number), bank address, amount to be transferred, etc.The currency rate is fixed before the transaction. The details are directly sent to the recipient branch or via an intermediary bank. That’s not all; the payee also has to pay certain charges like service tax, conversion charges, and other applicable charges. Based on the instructions, the recipient bank credits the amount to the recipient’s account within 5 working days or more at times.<h2 class="heading-node" id="dd8c" style="text-align: justify">Payment Service Providers (PSP)</h2>A popular option for immigrants, Payment Service Providers (PSP), effect transactions either in the form of physical cash or online payments.<h3 class="heading-node" id="b848" style="text-align: justify">How does it work?</h3>The sender visits the agency with the current nation’s currency and proper ID proof for physical cash. The recipient can visit the agency at his location and collect the money after dedicating transfer charges to completing the ID verification process. For online transactions, the sender visits the PSPs apps or websites. Within a few clicks, money flies over the nations and reaches the receiver’s bank account directly.<h2 class="heading-node" id="8db4" style="text-align: justify">The Present</h2><h3 class="heading-node" id="affb" style="text-align: justify">Credit cards</h3>It is a reliable mode of payment while traveling abroad. A <a class="link" href="https://m2pfintech.com/blog/credit-card-processing-a-definitive-guide/">credit card</a> eliminates the need to carry cash in hand. They also offer attractive benefits like interest-free loan periods (a month or more), reward points, gift coupons, shopping offers, easy EMI options, travel insurance perks, etc.<h3 class="heading-node" id="0caa" style="text-align: justify">Forex cards</h3>Many banks and financial institutions offer <a class="link" href="https://m2pfintech.com/blog/forex-cards-international-travel-made-effortless/">forex cards</a> explicitly designed for globetrotters. They can make money transfers across multiple countries with a single card. It helps the users avoid currency exchange rate fluctuations by locking in the rates while getting the card.<h3 class="heading-node" id="0b4e" style="text-align: justify">Digital wallets, ewallets &amp; mobile wallets</h3><ul class="list-node" id="th56mo1sb"><li>These are virtual wallets that can store money and customer information (credit card/debit card number, date, bank details, etc.).</li><li>eWallets are used like <a class="link" href="https://m2pfintech.com/blog/prepaid-cards-101-a-definitive-guide-for-growth-and-profitability/">prepaid cards</a> where we can store our money.</li><li>Digital Wallets are used to store card numbers, account numbers, expiry dates, IFSC codes, etc. This confidential information resides in the cloud.</li><li>Digital wallets can be used on desktops, whereas mobile wallets can be used on mobile devices.</li></ul><h3 class="heading-node" id="f39a" style="text-align: justify">MasterCard Send</h3>Initiated by the global network provider, MasterCard Send allows both businesses/ individuals to make real-time cross-border payments to the recipient’s debit card number. It does not rely on the bank’s ACH system, so there is no need for a routing or account number to send the money across.<h3 class="heading-node" id="a125" style="text-align: justify">Visa Direct</h3>Visa Direct offers push payments to individuals/businesses across the globe. The business/user can tap into Visa’s global network and send payments in real-time or by a maximum time limit of 24 hours.<h3 class="heading-node" id="c742" style="text-align: justify">SWIFT GPI</h3>SWIFT GPI or Global Payment Initiative aims for transparent and faster cross-border payments. It breaks down all the costs involved, and the payee can keep tabs on where the payment is at any given time. While the older methods of cross-border payments are traditionally mysterious, SWIFT GPI unveils the mystery and significantly increases the speed.<h2 class="heading-node" id="80ee" style="text-align: justify">The Near Future</h2><h3 class="heading-node" id="05b1" style="text-align: justify">Open Banking APIs</h3>Open Banking<a class="link" href="https://m2pfintech.com/blog/api-the-power-that-drives-new-age-banking-ecosystems/"> Application Programming Interface (APIs)</a> aims to simplify the complicated procedures of cross-border payments. As it democratizes access to customer and their data, it becomes easier for fintechs and other financial institutions to build products that address their target demographic version of cross-border payment app.<h3 class="heading-node" id="f3c8" style="text-align: justify">Decentralized Ledger Technology (DLT)</h3>A term made popular by Blockchain tech, DLT can be applied to cross-border payments’ three most challenging aspects. They are backend processes, compliance, and as a means of payment. DLT can speed up the backend process while offering transparency at every step of the transaction. It can also reduce compliance-related costs and can introduce an entirely new method of payment.<img src="https://m2p-website-file.s3.ap-south-1.amazonaws.com/m2p-website-file/marketing-cms/m2p-blog/2021/05/2-1.webp" alt="M2P Fintech" title="" width="100%" height="253"><h3 class="heading-node" id="yj7z6hw5g" style="text-align: justify">How do cross-border payments work?</h3>Cross-border payment is a complex mechanism that involves many players. It carries many fees right from currency conversion to the respective country’s tax and other service charges. Both domestic and overseas entities work together to accomplish the transfer.For example, when a software purchase transaction is initiated, the “correspondent bank” requests the money from the “respondent bank.” Here both the correspondent and the respondent bank will have their colleague bank across the globe. So, the funds will leave the buyer’s bank and reach that bank’s counterpart present in the merchant country, ready for remittance. Then the remittance is transferred to the merchant’s bank for settlement. So, in short, banks work with other players like payment service providers; to transfer the money while navigating currency conversions, different tax regimes, transaction fees, etc. Further, slowing down the process.One of the most popular banks for forex settlements is the CLS bank. Founded in 2002, explicitly for mitigating risk and settlement of Forex transactions, CLS works with 18 currencies in cross-border payments. Even though it has been instrumental in making forex payments easier, it does have some drawbacks. With new emerging currencies gaining global transaction volume, CLS is limited by 18 currencies and is yet to catch up with technological advancements of member countries’ payment infrastructure.To create a seamless flow for the cross-border payments, some changes must be incorporated quickly to ensure better penetration across the value chains:<ul class="list-node" id="cp59ifqob"><li>Applications of Real-Time Payments will offer much-needed transparency. The parties involved can track the transaction status anytime. For example, this is what SWIFT GPI is trying to achieve. It has the potential to be replicated in other payment methods.</li><li>The time factor taken to complete a cross-border payment should be brought to days from weeks. Small and Medium Businesses (SMBs) should have better access to these payments as cash flow is the backbone of their operations. Unpredictable delays and complex transactions will hamper its growth.</li><li>Today’s customers, both retail and corporate, are looking forward to solutions that adapt to their evolving needs. They also favor the platforms where the solutions are embedded for all access.</li><li>Customers today prefer a choice of methods and security when initiating transactions. A flexible ecosystem where transaction history, audit, and reconciliation can give valuable insight and a seamless experience.</li><li>Integrations are a much-needed factor to bring about global interoperability and linking fragmented value chains. No matter the transaction origin, the experience of the transaction must be seamless for the merchant.</li><li>Typically, the stakeholders in this transaction flow more often follow the same regulations. They can be bifurcated into ‘front end’ and ‘back end’ stakeholders. The Front-end players are the Tech companies who look at the ‘data’ aspect of the transaction and can have lighter compliance standards. The onus should lie in compliance with balance-sheet exposure, counterparty exposure, and liquidity for the backend players.</li></ul><h2 class="heading-node" id="3198" style="text-align: justify">How is fintech disrupting cross-border payments?</h2>With Blockchain taking the lead in the fintech space, digital currencies can be used in cross-border payments instead of national currencies limited by geography. As digital currencies are built with technology, it provides a bread crumb trail for the transaction trace and reduces the need for intermediaries. Also, the DLT applications of Blockchain can provide transparency and security at the core. Along with these innovations, Fintech also offers the following benefits:<img src="https://m2p-website-file.s3.ap-south-1.amazonaws.com/m2p-website-file/marketing-cms/m2p-blog/2021/05/3-1-1.webp" alt="M2P Fintech" title="" width="100%" height="253"><ul class="list-node" id="4nv0g5ncq"><li>Constant enhancement: Fintech giants are leveraging the latest technologies like Blockchain to make cross-border payments completely transparent and tamper-proof. They concentrate more on the user experience and focus on making complex processes swift and convenient.</li><li>Ease of use: Virtual wallets allow the users to stay free from making a note of all the passwords, account numbers and worry about their confidentiality. You can feed all your confidential information with a single tap and complete your purchase.</li><li>Convenient:&nbsp;Forex cards are travel allies. It makes our wallets light when we are traveling to different countries handling different currencies. We can simply swipe on the retail outlets or wave it with a contactless card. Like an ATM card, it allows us to withdraw the local cash in any country (fed while receiving). The best part is few banks are waiving the ATM withdrawal fees, cross-currency charges, etc.</li><li>User experience:&nbsp;Cross-border payment gateways help businesses to sell across borders. As they comply with PCI data security standards, customers feel secure while buying from a foreign website. Consumers can purchase by simply typing their email ids and enjoy rapid check-out.</li><li>Marketing mate:&nbsp;Businesses can use the buying patterns of the consumers collected through their wallets and retarget them with attractive offers. Wallets offer rewards to buyers in the name of cashback. This money can be utilized only in their portal and increase the sales of the online platform.</li></ul>Over the past decade, cross-border payments industry innovations are drastic and soaring high, with creative Fintech minds entering the space each day. Cross-border payments are no longer a daunting task consuming more time and effort. And we can expect many more innovations that make cross-border payments a secure and transparent exercise.To know more about cross-border payments, write to us at business@m2pfintech.com<a class="link" href="https://m2pfintech.com/newsletter/">Subscribe</a>&nbsp;to our newsletter and get the latest fintech news, views, and insights, directly to your inbox.Follow us on&nbsp;<a class="link" href="https://www.linkedin.com/company/m2pfintech/mycompany/">LinkedIn</a>&nbsp;and&nbsp;<a class="link" href="https://twitter.com/m2pfintech">Twitter</a>&nbsp;for insightful fintech tales curated for curious minds like you.

Cross- Border Payments: A Swift Money Flow Across Borders

<img src="https://m2p-website-file.s3.ap-south-1.amazonaws.com/m2p-website-file/marketing-cms/m2p-blog/2022/06/banner1251.webp" alt="M2P Fintech" title="" id="pzkn5bsd" width="100%" height="356">A crowded building with people spending a lot of hours in a queue to get their service done – this is almost everyone’s idea about the term “Bank.” But now, it looks suave after an upgrade with a fresh look.Gone are the days when people spent a day getting their banking service done. After the great technological innovation, traditional banking is no longer considered a troubling word. Several advancements acted as a trigger for the players like fintech companies and other third-party service providers (TPSP) to cause a paradigm shift that posed a challenge to traditional banks.<h2 class="heading-node" id="kqq3yw2uf">What does Banking as a Service mean?</h2>Simply put, Banking as a Service (BaaS) is an end-to-end process that involves FinTechs and other third-party service providers(TPSP) to access the bank’s financial services through <a class="link" href="https://m2pfintech.com/blog/api-the-power-that-drives-new-age-banking-ecosystems/">APIs</a> for offering a different and personalized financial approach to their customers.<h2 class="heading-node" id="83d7">Banking as a Service - The Bonanza</h2>Over the years, banks provided financial services to their customers using rudimentary infrastructure. But now, many tech-savvy banks evolving around have pushed every bank to upgrade their services to maintain their lifetime value. To meet this rising demand, FinTech comes into play by integrating their white-labeled services by accessing the bank’s APIs.Looks like banks were on a ride of a lifetime to the technological planet with many advancements at fore. One such advancement is Banking as a Service. It is a business model which plays a crucial role in strengthening the customer base with the help of fintechs that provide innovative financial assistance to the bank. Banking as a Service pioneers a huge window of opportunities for digital banking and rockets the revenue.As<a class="link" href="https://m2pfintech.com/blog/embedded-finance-101-the-bridge-connecting-tech-and-financial-services/"> embedded finance</a> is treasured and demanded by many NBFCs, software companies, and logistic firms, BaaS has gained popularity and is now ubiquitous for bringing promising financial features for their customers and even escalates their revenue growth.Predominantly, fintech start-ups have come up in large numbers. They target banks to promote and promulgate their business by offering innovative products and services. The fintech sector collaborates with banks to gain rapid acceptance by the customers to provide loans, cards, deposits, insurance, make payments, and many trusted financial services.<h2 class="heading-node" id="e682">The Working Mechanism of BaaS</h2>Banking as a Service works on providing trendier products than ever to customers with a more qualified user experience. The pandemic skyrocketed the demand for payment digital apps. Amidst the chaos, these contactless payments created a brighter picture by providing ease of use while staying indoors.<img src="https://m2p-website-file.s3.ap-south-1.amazonaws.com/m2p-website-file/marketing-cms/m2p-blog/2022/06/Artboard-1-copy-7-9.webp" alt="M2P Fintech" title="" id="49t76cu8b" width="100%" height="284">There are two ways to carry Banking as a Service seamlessly.<h3 class="heading-node" id="6785">API- based stack</h3>With API’s intervention, FinTechs and other third-party service providers (TPSP) can help banks offer customers a transparent, smooth, and customized financial service along with the existing banking services. Customers feel a better user experience when providers synchronize and connect with the bank’s tools and services. Simplified money flows are now possible with very few clicks for the customer.The fintechs are given secured access to banking services followed by integrating bank’s APIs with the provider’s products to further execute seamless white-label banking services using upgraded technology. They strictly abide by the rules and regulations in carrying out the bank’s data safely using top-notch security systems like PCA.<h3 class="heading-node" id="b6e9">Cloud-based stack</h3>Here, the licensed tech companies operate as regulated banks to offer the services by pushing the traditional banks to the inoperative section in this play by redefining their stacks to cloud sections.<h2 class="heading-node" id="0ecf">The Three-Layered Structure of BaaS</h2><ol class="list-node" id="1ye58bqfe"><li>Infrastructure as a Service (IaaS) includes the basic financial services provided by the traditional banks through an IaaS provider.</li><li>Banking as a Platform (BaaP) is placed above IaaS, which includes the customized services offered for fintech start-ups and companies. The data carried out between the banks and fintechs are monitored securely as data security is concerned.</li><li>FinTech SaaS — Here, the fintech companies which offer financial services interact with the end-users to carry out the data or requests and sends it back to BaaP securely.</li></ol><img src="https://m2p-website-file.s3.ap-south-1.amazonaws.com/m2p-website-file/marketing-cms/m2p-blog/2022/06/Artboard-1-copy-10-3.webp" alt="M2P Fintech" title="" id="k6nerr46b" width="100%" height="284"><h2 class="heading-node" id="80d9">Evolution of Banking</h2>This era has witnessed the massive emergence of tech-savvy banks. One such popular emergence is the&nbsp;<a class="link au js" href="https://m2pfintech.com/blog/neo-banking-the-rise-of-new-age-banking/" rel="noopener">Neo Banks</a>. They are digital banks that operate only online with the help of artificial intelligence, machine learning technologies, and <a class="link" href="https://m2pfintech.com/blog/the-world-of-apis-how-they-power-fintech/">APIs</a>. Cost-efficient, convenient, and user-friendly interface are what makes them stand out. Neo banks partner with traditional banks to digitally offer services from opening a bank account to money transfers/bill payments 24x7.FinTechs play a crucial role by building their innovative infrastructure on top of it, making the Neo Banks more popular. Banking as a Service is the backbone of Neo Banks as they are dependent on APIs and other crucial financial services they offer.We take pride in the fact that <a class="link" href="https://m2pfintech.com/">M2P</a> powers&nbsp;Finin, India’s first neo bank with our APIs that enables instant provision of user’s bank account and prepaid cards.<h2 class="heading-node" id="ka11sfo39">Types of BaaS Providers</h2>BaaS providers can be classified into three models based on their purpose.<ul class="list-node" id="knjzk1ypi"><li>API Stores&nbsp;— Traditional banks open their API for fintechs and other TPSPs to incorporate their innovative bank services for customers.</li></ul>Services offered: eKYC, beneficiary validation, remittance, inquiry, etc.<ul class="list-node" id="dcdqfn7c5"><li>White-Label Platform&nbsp;— Companies that don’t carry a license can also approach fintechs and other TPSPs to offer their white-labeled service. But, in India, a license is a must to carry out this model.</li></ul>Services offered: Digital banking &amp; cards, lending, blockchain, payments, etc.<ul class="list-node" id="ikgg6uif1"><li>BaaS as Co-branding&nbsp;— The fintechs or neo banks carry their appearance in the forefront for the traditional banks to offer their effective services.</li></ul>Services offered: Banking &amp; Cards, Integrated payment gateway, etc.<h2 class="heading-node" id="b3e1">Open Banking vs. Banking as a Service</h2>Let us elucidate the long-haul confusion between <a class="link" href="https://m2pfintech.com/blog/open-banking-a-primer-2/">Open Banking</a> and Banking as a Service. In a nutshell, the usage of APIs by fintechs determines the difference between these two.<img src="https://m2p-website-file.s3.ap-south-1.amazonaws.com/m2p-website-file/marketing-cms/m2p-blog/2022/06/1_PMHIFWMQVSCmoFwYkpGQkg.webp" alt="M2P Fintech" title="" id="fcg7dxzxw" width="100%" height="181"><img src="https://m2p-website-file.s3.ap-south-1.amazonaws.com/m2p-website-file/marketing-cms/m2p-blog/2022/06/Artboard-1-copy-11-2.webp" alt="M2P Fintech" title="" id="9n9mxbvuv" width="100%" height="284"><h2 class="heading-node" id="c3d7">Benefits of Banking as a Service</h2>Nowadays, fintech start-ups shine with their innovative ideas and serve any financial need, making banks powerful. The mobile-first approach and everyday emerging digital advancements made Banking as a Platform a successful one in the industry. Also, the transparency and ease of use foster the growth of open banking by quickly nearing the go-to-market reach.Banking as a Service is the new evolution for both traditional banks and fintech sectors. The traditional banks who are smarter enough in adapting to the digital era can attain profitable accomplishments. They are forced to attract more young clients with their newer technologies and methodologies in financial services. For instance, the traditional banks can now collaborate with third-party service providers to expand their services like vehicle insurance, lending, <a class="link" href="https://m2pfintech.com/blog/remittance-with-upi-a-giant-leap-for-cross-border-payments/">remittance</a>, rewards, currency exchange, and many more.Many banks’ go-to option is now BaaS since they cannot remodel their infrastructure for back-end, front-end development and give a more product-centric approach as fintechs do. Banks prefer it is better to approach fintechs and TPSPs rather than making a huge investment building in-house.With banking service as a platform, it is simpler to launch and integrate banking features with the magic wand called <a class="link" href="https://m2pfintech.com/blog/the-world-of-apis-how-they-power-fintech/">API</a>.To make the long story short, BaaS is the savior for many banks, non-financial companies, and customers.Yes! We all have the same thought. The future holds more for banking.We can conclude that it will always be a money-spinning venture as fintechs and banks follow the collaborative way of doing business to produce more innovative services to their customers. Without a shadow of a doubt, the journey of Banking as a Service had just started, and we have a lot more to witness together.<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.

Banking as a Service - Redefining Financial Services

<blockquote class="block-node" id="l59nir9cq">How Covid-19 Pandemic shaped the Remittance sector in the year 2020?</blockquote><img src="https://m2p-website-file.s3.ap-south-1.amazonaws.com//m2p-website-file/marekting-cms/m2p-blog/2025/05/Upward-spiral.webp" alt="Upward Spiral" title="" id="agehfg19l" width="100%" height="358">When the ongoing Pandemic hit in 2020, the World Bank and other agencies predicted a substantial fall in the <a class="link" href="https://m2pfintech.com/blog/remittance-with-upi-a-giant-leap-for-cross-border-payments/">global remittance</a>. This fall would have done sufficient damages to the domestic finances of South Asian nations like India, Pakistan, Sri Lanka, Bangladesh, and Nepal. The first four countries observe maximum outward remittance from the GCC region, and as we were present in the region (HQ at Abu Dhabi), we thought of doing an analysis.We collected data from various sources and what we found was an extraordinary Story of the Upward Spiral in Remittance in the year 2020. The facts and figures we collected, pointed towards growth in outward remittance from the UAE and Saudi Arabia. Further, as brick-and-mortar stores saw closure due to the pandemic, growing remittance gave a level playing field for the rising Fintechs in the region. Read on to know more.<img src="https://m2p-website-file.s3.ap-south-1.amazonaws.com/m2p-website-file/marketing-cms/m2p-blog/2022/05/Artboard-1-copy-3.webp" alt="M2P Fintech" title="" id="t2yql5oox" width="100%" height="1466"><img src="https://m2p-website-file.s3.ap-south-1.amazonaws.com/m2p-website-file/marketing-cms/m2p-blog/2022/05/Artboard-1.webp" alt="M2P Fintech" title="" id="hc3yiy8pk" width="100%" height="1212"><img src="https://m2p-website-file.s3.ap-south-1.amazonaws.com/m2p-website-file/marketing-cms/m2p-blog/2022/05/Artboard-1-copy-2.webp" alt="M2P Fintech" title="" id="kszqc4ge3" width="100%" height="2066"><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.

M2P Blog