Open Finance Community payment challenge: M2P

Qorus and Capgemini have identified the leading fintech companies for the payment challenges they organize for the Open Finance Community. One of them is M2P and they tell us more about it.

About M2P 
Based in India, M2P has a solid presence in Asia Pacific, the Middle East and also in Africa. M2P embeds fintech in core business offerings, acting as a reliable tech layer between banks, fintechs, and financial institutions.

Can you briefly describe your product or solution and in which countries do you operate?

M2P Fintech, founded in the year 2014 and headquartered in Chennai, is Asia’s largest API infrastructure company offering a wide gamut of services that enable businesses of any scale to embed financial services. M2P Fintech is an omnichannel platform that operates in over 20 markets across the Asia Pacific, MENA, and Oceania regions. M2P works with over 100 banks and 100 NBFCs, and has clocked over 600 fintech engagements across various industries serving more than 35 million end users.

M2P Fintech is well-positioned with a secure and highly customizable tech stack that helps businesses launch their products with efficacy and speed at its core. The banking and fintech infrastructure offers solutions that enable banks, lenders and fintechs to operate and serve their customers in a truly digital manner. On one end, M2P’s platform allows businesses to quickly create and deploy customized fintech products by customizing all relevant workflows through their plug-and-play solutions. On the other end, M2P simplifies the ability of banks, licensed and regulated entities to support these products at the back end by facilitating technology integration as well as settlement and operational support. 

What business problem do you solve? Why is it important to your clients?

We empower fintechs, banks and businesses with custom APIs for a wide range of financial services, core banking systems, card management system and comprehensive lending suite. 

• Scalability: We don’t just build. We co-create products. Our team understands the long-term goals of our partners and customizes products that are secure, scalable, and aligned to their business objectives.

• 5X faster time to market: Our solutions are end-to-end, meaning we do all the heavy lifting, enabling our partners to launch cards, programs, or any fintech product in no time at all.

• 100% customizable: One size does not fit all! Our APIs are flexible, giving us the capability to build configurable products that meet different market requirements.

• Secure & Compliant: All products we build are benchmarked with the highest industry standards. Our products are up-to-date with the latest in security and compliance. If it is from us, it’s good to go.

What is your core value proposition? What are the unique features you offer to your customers? 

Our platform productizes the capability to offer digital payments, digital lending and digital banking while simplifying all integrations and offering robust security. This enables quick deployment and scaling-at-will of fintech programs, with a high degree of customization.

On the front end our customers are able to quickly set up fintech layers on their offerings, and on the back end our platform integrates seamlessly with banks, other PPI license holders and card networks (Mastercard, VISA, RuPay) to facilitate seamless movement of money.

M2P has a suite of products that is a required component to enable a bank to become digital, for a lender to begin digital lending, and for a fintech to embed financial services. We build credit stacks to accelerate global expansion.

• Fully packaged one-stop solutions to solve large end-use cases

• Faster and nimbler GTM for fintech use-cases

• Deeper ownership of end-customer

• SaaS-like capabilities that can be offered as micro services or as part of a broader product suite

• Unlocking legacy bank systems – creating a cloud-friendly, easy-to-integrate environment to fintech layer

• SaaS-like offerings to reduce overheads to run a digital business for the bank

M2P’s suite of products includes every component required for a fintech or any business entity to embed financial service as a part of their world-class offering. 

M2P also provides the core engine for regulated entities. For banks, M2P powers their CBS to digitize their core; for lenders we offer LOS and LMS offerings, and for cards we provide them with the CMS. M2P has invested in FinVu, a firm with an Account Aggregator license. 

We also provide other tech infrastructure to further deploy services based on the requirement. 

Providing that your solution has already been implemented in financial institutions, which companies have already adopted this solution?

M2P has 100+ bank partnerships and 100+ NBFC Partnerships with over 35 million end customers and $9 billion active loan portfolio (Core Lending Suite) that use the platform. We have powered over 600 fintech engagements on our platform across multiple segments such as travel & forex, Fleet & FasTag, digital lenders, neobanking, NBFCs, gig economy players, and traditional bank programs.

We have partnered with some of the industry leading names to launch innovative payment solutions, such as: 

• Finin (India’s first neobank)

• CRED in launching an innovative instant bill payment solution

• OLA Money Postpaid in launching an easy-to-use OLA-Pay for ride customers, 

• And several other innovations built on the Prepaid card platform

Out of the top 10 banks in India, M2P’s platform powers a significant part of their businesses.

Can you describe in a few words one of these collaborations (What was the objective? What were the main challenges? What results did your client obtain thanks to the implementation of your solution?)

Implementation of Aadhaar Enabled Payment System (AePS) for Gayatri Bank:

Gayatri Bank is a co-operative urban bank in the Jagtial district of Telangana. They are the second largest cooperative urban bank in Telangana with over 23 branches. They deliver economic support and hassle-free digitized financial services to the underbanked and unbanked population in India.

Challenge: 

Digital payment modes such as UPI, mobile wallets, contactless, and QR codes require the customer to either carry a smartphone or a card, or remember a passcode or PIN. Only then can a transaction be successful. In scenarios where the customer is a senior citizen, disabled or illiterate from remote unbanked corners, possessing a smartphone or remembering PINs is a huge challenge. Gayatri Co-operative Bank wanted support in fixing this issue.

Resolution: Aadhaar Enabled Payment Systems (AePS)

Requiring nothing more than an Aadhaar number (unique national ID number of all residents in India) and biometric identification (thumbprint), the mandate of the Aadhaar enabled payment system is to make financial services accessible to everyone. 

AePS is a key initiative taken by the National Payments Corporation of India (NPCI) in association with the Unique Identification Authority of India (UIDAI) to encourage cashless transactions and financial inclusion in India. People can access their money, open bank accounts, and make money transfers and payments without carrying any document or smartphone. 

How we powered AePS for Gayatri Bank

Gayatri Bank needed a fintech partner to enable AePS implementation and manage UIDAI authentication across their branches and business correspondent network. This was a strategic move for Gayatri Bank to drive inclusion, digitalize retail payments, achieve interoperability, reach more customers, and cut costs. 

We powered the AePS switch and helped customers use their Aadhaar number and fingerprint as proof of identity to perform the following transactions through business correspondents:

• Cash deposits

• Cash withdrawals

• Intrabank or interbank fund transfers

• Balance enquiries 

• Mini statement printing

We securely routed Aadhaar-initiated interbank transactions through a central switching and clearing agency, and enabled disbursements of Government entitlements under the National Rural Employment Guarantee Act (NREGA), social security pension, and handicapped old age pension schemes. 

Results achieved

Gayatri Bank experienced a significant boost in revenue and transaction volumes, as they were able to service more customers with greater convenience without incurring the costs of opening bank branches or ATM machines. We enabled Gayatri Bank to deliver the following benefits to customers. 

• Facilitate secure transactions using UIDAI biometric authentication

• Deliver 6X improvement in transaction efficiency 

• Cut down execution time by 1/5th of the usual timing

• Financially empower senior citizens, and the differently abled 

• Eliminate the need to carry smartphones or cards 

• Eliminate the need to remember passcodes, PINs or CVV numbers 

• Enable secure transactions at remote locations without bank branches or ATMs

What is your business model and how easy is it to duplicate to additional geographies?

M2P Fintech is a fintech infrastructure company facilitating firms of any size to be digital finance solution providers. We are backed with a safe and adaptable cloud platform that enables businesses to create tools with efficiency and agility at the center, thereby powering the payments, banking and lending capabilities of banks, NBFCs and fintechs. Our software platform has undergone multiple regulatory assessments and is validated by industry-leading credentials. Our system helps firms to swiftly design and launch fintech products by allowing them to customize all key operations using our plug-and-play alternatives. Our system also makes it easier for banks/PPI licensees/regulated firms to handle these solutions in the back end by enabling technological interface, settlement, and technical assistance.

Additionally, we also have all the required industry certifications including ISO 9000, ISO 22301, ISO 27001, PCI-DSS, PCI-3DS, VISA PIN Security Audit, and appropriate certification for supporting VISA, MasterCard and RuPay card issuance.

API infrastructure platforms are thriving in the fintech arena, and this includes everything from bitcoin digital wallets to cross-border payments and the creative ecommerce solutions that have altered the business. Indeed, in the last decade, new developments have not only revolutionized the sector but the whole lending and payments culture itself, allowing online shopping and ecommerce to genuinely flourish and bringing new possibilities to small companies and consumers.

Indian fintechs have been eyeing the MENA and SEA markets as these regions play a significant role in innovation and are ideal for a financial transformation. 

These markets have all the relevant factors, such as a rapidly expanding young and mobile-first population, accommodating government policies, tax benefits, rapid growth in venture capital investments, favorable demographics, and low financial penetration. These markets make it easy for us to replicate the Indian fintech and payments solutions with minor modifications to meet their needs.

Where do you see your fintech company in five years? What impact or difference are you trying to achieve for financial institutions in your portfolio?

Back in 2014, the circumstances worked out well for us. We saw the whitespaces that existed in the payments space, and we set about to fill them all one by one at a time when ‘fintech’ as a term was just being coined. We predicted a long time ago that payment integration would become the key area of focus of many companies.

And thus, we embarked on a mission to create an infrastructure that is simpler to use and comprehend, allowing businesses to use and provide seamless financial solutions. With extensive market knowledge, we create products tailored to the demands of end-users. We engage and connect with a range of companies, including developing startups, financial firms and banks, to co-create and deliver customer-centric products that are consistent with industry norms.

India's fintech industry is anticipated to continue its rapid expansion over the next five years. Over 2,100 fintech companies comprise India's flourishing fintech sector. About two-thirds of these fintechs were founded during the past five years, providing a substantial impetus for advancement in this sector.

Fintech will continue to evolve as innovations flourish. As a result, customers will continue to enjoy faster services and lower costs, as the bulk of transactions will be automated. Fintechs will also have to work on creating trust and consumer engagement as more consumers join the digital board. Embedded finance is here to stay, and we will see more embedded experiences across products to integrate payments for loans, insurance, debit cards and investment instruments with almost any non-financial platform. M2P will continue to be at the forefront of the embedded finance revolution, co-creating and launching new products with innovative and disruptive entrepreneurs and financial institutions.