Mar 16, 2018 02:14 PM IST | Source:

Blockchain-based P2P payments company Cashaa aims to be a mobile-only digital bank in India

The company is targeting to cash in on the millennial generation which seeks automated functions for critical procedures also, such as loan disbursement, card blocking and issuance, and so on.

Durba Ghosh @durba1985

London-based Cashaa, a peer-to-peer payments, and remittances startup, is in talks with banking institutions to launch a white label mobile-first product based on blockchain to digitise several manual functions in the banking system.

“We will launch the product with a bank soon. In Europe we are completely an independent entity. But in India we are partnering for regulatory and compliance issues. The bank will mount its own functionalities on the properties offered by us to make transfers easier,” Founder and CEO of Cashaa, Kumar Gaurav told Moneycontrol.

The company, which is ranked among the 100 top rated blockchain companies globally, will go live with the white label app in India in a month and will start customer on-boarding by the fourth quarter. Gaurav declined to reveal the entity they are set to launch with. However, a source close to the company said the company is partnering with Yes Bank.

The company is also in talks with payments companies such as Mobikwik and Paytm to enable international payments for them. With Paytm’s Payments Bank and Paytm Money - the wealth management vertical, Cashaa will have additional leverage in the market.

Cashaa, seed-funded and founded in 2016, uses artificial intelligence and biometric systems to empower mainstream adoption of payment and financial products. The open platform will allow traditional financial institutions, banks, and payment processors to reinvent and connect their products and services on the Blockchain, making procedures more efficient, transparent, and convenient.

Cashaa, however, is not keen to take the partnership route to offer white label products in the country. The company plans to use over USD 33 million it raised via an ICO, to instead get licences in more countries like India to expand its remittance channels.

Cashaa is not limited to just remittances and plans to expand and use its blockchain platform to implement financial services such as lending, cross-border investments, and more.

The company uses cryptocurrency transactions in the background for cheaper money transfers across the border. It is currently working towards acquiring an NBFC license in India to become a full-fledged digital bank.

One of the biggest players in peer-to-peer payments and remittances in Europe, Cashaa is not essentially a crypto exchange. The users who use Cashaa for money transfers do not require to know anything about cryptocurrency. The remittances behave like a typical money transfer.

How does it work?

A trader on the platform will sell bitcoins in exchange for a fiat currency in the country where the transfer has originated. Another trader in the receiving country will buy those bitcoins, paying for it in the local currency there. This conversion is pushed to the recipient of money transfer. On the consumer front, the process is seamless, such that the sender or the receiver need not dabble into cryptocurrency at all. What it does, in fact, is to make money transfers through international boundaries cheaper and more accessible.

“Remittances usually take a lot of time. With Cashaa, money will be received by the beneficiary account within 30 minutes. It reduces the cost and time taken for remittances by banks. That’s huge for countries like India and Indonesia with a large diaspora across the world sending money home,” Gaurav says.

Cashaa has also implemented several functions in the European market that are typical to a traditional bank, such as card issuance, forex exchange, e-commerce payments and so on. The company has a global tie-up with Mastercard, which allows its card to be used internationally. In remittances, Cashaa processes about USD 15 million worth transfers, primarily for international education institutions, Gaurav said.

The company is targeting to cash in on the millennial generation which seeks automated functions for critical procedures also, such as loan disbursement, card blocking and issuance, and so on.

“Currently, if you block a card, your banking functions are as good as suspended. One will have to physically go to a branch to collect the re-issued card. Such prolongations can be cut down through our platform,” he says.

Cashaa is also looking at offering additional functions such as control card, which essentially means that a user can willingly block certain transactions through the Cashaa card, while allowing others.

India’s financial system has over 233 million people who are unbanked or under-banked, while there are scores of other people in urban areas also who find remittances or money lending across international borders complicated, time-consuming, and expensive.

“We will also look at foraying into the rural areas, but that is some time away still. The market is there, but clarity on policies regarding blockchain, crypto assets, and banking is needed before we go there,” Gaurav says.

Other companies like Ripple, which connects banks with its private blockchain network, are also trying to use cryptocurrency to reduce the cost of money transfer. However, Cashaa unlike Ripple is not restricted to its own token, but transacts through all cryptocurrencies available today. Ripple largely works with its XRP token.

Cashaa runs on Auxledger, an enterprise-grade blockchain infrastructure that currently powers over a dozen applications across different state governments of India. Auxledger enables organisations to quickly deploy a blockchain network and build their business logic on top of it.
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