This API Platform Got INR10 Crore Funding from CRED’s Founder, Kunal Shah and Others  

The Chennai-based API Platform company, YAP that powers the next generation of banking and payment products has lately proclaimed its first funding round.

A cohort of angel investors--Amrish Rau alongside Jitendra Gupta, founder at Jupiter, Kunal Shah, founder of CRED, Vikram Chachra, entrepreneur-cum-Venture Capitalist at 8i Ventures, Abhishant Pant, founder at FinTechMeetUp and Pei-Fu Hsieh of Karbon contributed to INR 10 Crore funding round, according to the company’s official statement. 

The startup decides to use the funds to accelerate growth and extend its team to develop new banking products. 

“We are at the centre of API based Banking and Payments in India and look forward to scaling our platform across Asia.  We pride ourselves as the platform of choice for fintech and businesses in India. The funding round by India's leading fintech entrepreneurs is a terrific validation of our mode,” Madhusudanan R, Co-founder at YAP, said.

Helping the Fintech Players 

The modular mobile API platform, YAP is supported by leading banking institutions--Yes Bank, DCB Bank, Equitas SFB, and SBM Bank, among others. The startup permits the companies to rapidly develop, examine, and repeat their own branded debit, credit, and prepaid accounts.

YAP says that many of the leading companies in India including Ola, Cred, Bank Open, Niyo, RedCarpet, and Slice, among others rely on its API to open new financial accounts, issue, and process payments and co-create new products. 

As of December 2019, the company processed over $2 billion in annual payments and more than 50 million transactions, a 300 per cent growth over the previous year. With over 200 fintech engagements, the funding allows the company to develop API Banking capabilities to attract new fintech players and build on the momentum.

“One of the most cumbersome parts for any Fintech journey is the bank platform integration and development of core payments and card technologies. YAP has already built the bank integration pipes and provided this in an easy to use microservices architecture, which can be consumed by any fintech,” Amrish Rau, who has joined YAP’s board, said.

The startup, which is based in Chennai, essentially utilizes the API standard for banking and payments products in India. The company’s API assists some of the leading fintech companies. Furthermore, its products are backed by prominent financial institutions. 

Rising Fintech Industry in India

India can have exponential growth in digital payments in the offing. According to a  KPMG report, “Fintech in India–Powering mobile payments” states that the mobile payment revolution with its evolving form factors has led to a boom in the number of merchants adopting digital payments. From close to 1.5 million digital payment acceptance locations in 2016-17, the number of merchants accepting digital payments modes has increased to over 10 million, in a short span of two to three years. The global digital payments market is expected to touch $10.07 trillion by 2026. This shift can be attributed to driving factors such as robust payment infrastructure, the evolution of form factors, availability of structured data, a shift in consumer behaviour and the government's vision of transforming India into a cashless economy.

The digital payments have evolved immensely in the country. Person-to-person transfers, voice banking, and camera-enabled QR code scanning are frequently used forms of digital payments.   

The research informs that this (growth of digital payments) can be attributed to an increase in smartphone user base (forecasted: 829 million by 2022 growing at a CAGR of 15.5 per cent). 

The Point of Sale (PoS) devices have also seen a mobile form factor with mPoS (Mobile PoS) devices accepting device-based payments. This segment has been forecasted to grow at a CAGR of 54.2 per cent in the period 2019-23. 

Are Investors Redirecting their Focus on Payment Solution Firms?

As digital payments are proving to be a thriving niche in the fintech industry, investors are eyeing on the payment solution firms and pumping money into them. The Bengaluru-based payments solution firm, Innoviti has lately raised $5 million in debt funding from FMO, the Dutch development bank. Another investment is recently made into a wealth management company, Paytm Money. The company has received INR 40 crore capital infusion from its parent firm, Paytm, which is administered by One97 Communications, reported Inc42. 

In January this year, the Noida-based payment solutions provider, Pine Labs Pvt. Ltd received funding from an American company. Multinational financial services corporation, Mastercard Inc planned to invest $300 million in the funding round, reported The Economic Times.

The bet is counted as the second investment by the American technology giant in India in the last six months.