Our aim is to push cashless payments among teenagers: FamPay co-founders

FamPay, a neo-bank for teenagers aims to bring cashless convenience to teens and their parents. Last week it launched a numberless card – FamCard. It’s like a debit card that teenagers can use to make payments. The 2019 founded FamPay was started by IIT Roorkee graduates Kush Taneja and Sambhav Jain.

In March 2020 FamPay raised $4.7 million in seed funding from Y Combinator, Venture Highway, Sequoia India, Global Founders Capital and angel investors including Kunal Shah, founder of CRED. In an e-mail interview FamPay co-founders Kush Taneja and Sambhav Jain discuss the FamPay model, its relevance for teenagers and more. Edited excerpts:

Your target audience is teenagers. Why so? What is the problem you are trying to solve?

Sambhav Jain: Today’s teens are digitally savvy, having grown up with technology as a mainstay in their day-to-day lives but so far have not had a digital payments solution to go cashless. A recent RBI report quoted a 23 percent rise in transactions per person and 87 digital payments apps in play. None of these apps, however, include the pre-banked segment of teenagers in the digital payments ecosystem.

There are an estimated 250 million+ teenagers in India in the 12-18 years age group of which 20 million have smartphones. They are still reliant on getting cash for their expenses from their parents.

Another problem with cash use is that parents do not have any visibility into the expenses made by their child. With FamPay and its numberless card, minors can finally make online (UPI & P2P) and offline payments without the need to set up a bank account. Parents can send money to their kids on the app, with control and supervision over the amount of money the teens spend. In addition to the card, teens get their own unique UPI ID with which they get first-hand access to the growing UPI Payments network.

How exactly does FamPay work. Do parents transfer money into their teenage children’s FamPay app and then they can use that to transact?
Kush Taneja:
FamPay offers a combination of parental control and independence for teens. It allows a parent to create a FamPool account which is a group account for the family. Parents will be able to track where the money is spent from this account. Additionally, teens get their own wallet as well. This is their personal account on the app from where the child can spend independently without having to ask their parents each time. Users can maintain a zero balance and there are no hidden charges or costs attached to any transactions.

The app also sports a social feed where friends can share their recent spends and react to updates. The app uses gamification to make money management fun. Teens are rewarded with a cashback on achieving a certain amount of savings for example and winners get a chance to double their savings as well.

What exactly is the numberless card and where will it be accepted?

Kush Taneja: FamCard is the numberless card that teenagers can now use to make payments online and offline independently, relieving parents of the trouble of giving them cash or their credit/debit card. FamCard has no numbers on the physical card. The card number and other details (expiry date, CVV) are stored within the FamPay app instead of being printed on the physical card. There’s no fear of card information getting disclosed in case it gets stolen or lost and the card can be paused, blocked and managed at fingertips on the app. Additionally, the card details within the app can be accessed only with device lock like fingerprint, face ID, pattern lock or PIN.

It also has a special feature of “Flash PIN”, which is dynamic and is generated for every transaction. Teens can just flash this PIN to the cashier for offline payments, without the need of entering the PIN by themselves on the POS machines, allowing for contactless payments amidst COVID-19.

FamPay worked with NPCI to make this numberless card. They collaborated to solve the backend supply chain which had to be reimagined and reconfigured to realise this effort. This card has been launched in partnership with IDFC First Bank and is accepted across the RuPay payment network of merchants.

Will you be doing Know Your Customer (KYC) among potential users? If so, what all is required to start using FamPay?

Kush Taneja: We have the required licenses from RBI to operate the business and have partnered with IDFC First bank and RuPay. We will be taking care of the KYC which is a simple process online on the app itself. The parent and their child would both be required to do the KYC since the child will also get their own unique UPI ID post which they can begin to transact.

What’s the revenue model?

Sambhav Jain: Our revenue model is based around the interchange fee that we would earn on every card transaction. We are also focusing on building partnerships with brands that are relevant and attractive for the GenZ teens with an aim to creating an in-app marketplace for teens and their families, amongst exploring further revenue streams.

Where do you see FamPay in the next 3 to 5 years?

Sambhav Jain: FamPay would like to grow as our teen users grow. We intend to begin and define their journey in payments and finance; starting out with FamCard and then growing to become their go-to brand for all their requirements.

Our aim is to push cashless payments among teenagers: FamPay co-founders Our aim is to push cashless payments among teenagers: FamPay co-founders Reviewed by TechCO on 7/21/2020 Rating: 5

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