The world we live in is called digital for a reason, from Artificial Intelligence to social media; everything is possible because of Technological Advancement. These technologies have created such a way that there is hardly anyone who is not connected to them.
With new technologies getting invented every day, digital means of payment have become the new normal in this decade. Now, banking is a very significant part of our life. Thanks to banking we are enabled to have our money saved in a bank account and it provides safety to that amount. Plus we get our salary credited there. Not only that, banks also lent money to individuals and businesses.
A couple of years ago, using a virtual bank seemed like a scene from a sci-fi movie but now, it’s a reality. The definition of payment has changed; with the help of technology transferring money from one account to another is possible through the internet itself. Thus, the way of banking has also changed; we can get the facility of a bank without a requirement of one. In India, Fintech platforms are now setting their eyes on a certain industry and that is called the Neobanks.
“Banking is Necessary, Banks are Not.”
― Bill Gates
In this article we will find out about the Neobank industry in India and its future, So let’s dive in.
What Is Neobank?
Neobank is a bank that is digital and doesn’t have any branches physically. It is completely online and they entirely focus on providing every facility of a bank like money transfers, financial solutions, and money lending through mobile phones.
In India, Neobanks doesn’t own bank licenses and hence rely on bank partners for providing banking services to its customers.
With the increase in the process of online banking and the acceptance of digital payments, Neobank is becoming a new trend in the country. These new-age banks provide good customer service and are very much customer-centric. Neobanks strive to offer a personalized banking experience to their customers based on analysis of customer data and behavior.
Being fully digital, Neobanks saves the costs of maintaining physical branches which lets them invest more in enhancing customer experience, and helps them maintain better margins.
Not just retail customers, Neobanks also has a lot on offer for small and medium businesses. From payment gateways to billing software, Neo Banks helps businesses manage their finances better.
Advantages Of Neobanking
People prefer Neobanking for various reasons. Some significant advantages of neo bank are -
- Creating an account in neobank is much easier than creating a physical bank account. Just following some simple steps one can create their account from anywhere and anytime through their mobile.
- International payments are possible through neobank card, while a traditional bank debit card doesn’t provide that service initially, we have to request an international debit card for global transactions.
- Neobanks are user-friendly and are designed to fulfill the demands of the customers. Neobank apps are very easy to use for customers
- Every transaction made through Neobanks is updated immediately on the app.
Top 5 Neobanks In India
Covid-19 played a huge role in intensifying the digital banking methods amongst the customers. As per Statista, the number of users in the Indian Neobanking segment is expected to grow to 17.11 million by 2026. The increasing popularity has caused an increased number of neobanks in the country. Currently, there are around 27 neobanks in India. We have listed below the top 5 Neobanks of India.
It is considered one of the largest neo banking platforms. From small to big businesses and individuals enjoy Instantpay’s neobank service. Founded by Shailendra Agarwal, this neobank process millions of transaction per day. It is easy to use and can be operated from mobile and the web. Instantpay’s partners are ICICI Bank, Axis Bank, IndusInd Bank, and Yes Bank.
This neo banking app is specially made for teenagers. Of course, supervision from their guardians is to be done. Their main aim is to make teenagers empowered and independent by encouraging them to make decisions regarding their spending. Fampay offers a numberless prepaid card that lets teenagers and minors make payments both online and offline.
This neobank service was founded in the year 2019 by Jitendra Gupta and Vishnu Jerome. This neobank provides the customer with an option to monitor their money spending pattern and doesn’t have any hidden fees. It does have a calculator that lets the customers watch on their financial health. Plus it gives out lots of rewards as well. Jupiter’s banking partner is Federal Bank.
This neobank helps businesses say goodbye to all those hassles while opening a bank account. This was founded by Ajeesh Axhuthan, Anish Achuthan, Deena Jacon, and Mabel Chacko in the year 2017. Open helps startups and businesses with banking, payments, and accounting. It also gives out a business credit card.
Razorpay is the first neobank to enter the club of Unicorn. Razorpay is designed for businesses. It was founded in 2014 by Harshil Mathur and Shashank Kumar and has served over 10 thousand businesses.
Razorpay's product suite makes accepting, processing, and disbursing payments easy for businesses. Razorpay offers RazorpayX, a service through which registered businesses can not only easily open current accounts, but can also automate bank transfers, get quick access to capital, do payroll automation, share invoices with customers, and pay taxes and also view financial reports from a single dashboard. Razorpay's current account gives out features like chequebooks, debit cards, and account statements. Razorpay's banking partner is RBL Bank.
However, one can take the Razorpay advantage even if his business is unregistered. Razorpay lets its users access all the payment modes like credit and debit cards, net banking, UPI, and Mobile Wallet. Freelancers, small businesses, and individual service providers can easily collect payment via Razorpay by integrating Razorpay into their website or app. They can also create payment pages, payment links, payment buttons, QR codes, collect recurring payments, make vendor payments, generate invoices and do much more with Razorpay.
Future Of Neobank Industry In India
In 2019 Neobanks raised $90 million in India. People are getting more familiar with digital financial services and with all those facilities prefer them over others as well. Although RBI doesn’t provide licenses to virtual banks, they collaborate with physical banks and let the customers use their services. In the last three years, India witnessed a steep rise of neobanks and with the trend, it is only going to rise in the coming years.
The world is witnessing a change that is revolutionary, everything is turning digitalized. It wouldn’t be wrong to say that the entire world is being ruled by the devices that we carry in our pockets.
With almost every service available digitally, the tech-savvy generation is indulging themselves in it enthusiastically plus the older generation is being a part of this change.
Banking, which is one of the most important parts of our lives, is now available without physical branches, thus this boon of technological advancement is making life a lot easier.
What is neobank?
A neobank is a virtual bank that operates entirely online from customer onboarding, to availing the simplest banking services.
Which is the best neobank in India?
RazorpayX, Fampay, Jupiter and Instantpay are some of the top neobanks in India.
How many neobanks are available in India?
There are a total of 27 Neobanks in India.