The rapidly growing middle class with diverse needs of finances now have a new product- a credit line by MoneyTap. Bala Parthasarathy, Co-founder & CEO, MoneyTap shares his concept and its unique points.
Q: How is MoneyTap unique and what section of the Indian diaspora does it cater to?
A: Our target audience is the middle class working Indian, which is a huge community. Currently, banks offer them a credit card or a loan. MoneyTap is kind of a cross between the card and the loan. It offers them the credit line on an app. The key insight was that when you are looking for a loan you do not get one easily. We have realized that getting a personal loan takes a lot of trouble. So we invented the concept called credit line. Through our credit line app customers can get an approved loan, and avail it whenever they want, however they want and in whatever denominations they need.
Q: How is it distinct from other credit instruments?
A: MoneyTap has a one-time approval process. Fundamentally the credit cards and personal loans are two kinds of flavors for lending. We have invented the third flavor MoneyTap, which is really ‘money on tap’. Once the loan is approved you can tap the money bit by bit, short term or long term and take the money on account, wallet or card.
The tab line is responsible credit, it allows you to take as much as you need. Most of Indians are insecure but that is the psychological insight that drives people to take as much as they can, which is not a good credit behavior because you have to repay it at the end of the day.
There is no shortage of needs, so we give them a product where money is approved and is there for them, but they do not have to use it. The interest and tenure can be worked around as per the withdrawal from the MoneyTap. Once you qualify you just don’t get a loan but a credit line, wherein you withdraw small amounts for as low as 2 months and as long as 3 years, as little as Rs. 3,000 and as much as your eligibility. The upper limit is up to 5 lakhs. Basically, it is the ultimate flexible line of credit.
Q: How do you differentiate MoneyTap from other lending platforms present in India today?
A: The biggest differentiation is that we are India’s first line of credit. This form of a lending product is unique. We are also India’s first chat-based lending. You can configure the product inside Whatsapp without downloading the app. One of our several innovations is the lending application process itself. It is a mobile app with a Chatbot, and technology is primarily for regulation compliance. For the source of lending, we have partnered with both banks and NBFCs. So, think of us as a technology provider, and that is why our biggest technology innovation is for compliance and regulation, especially in the banks and NBFCs.
Q: What is your offering to the banks to be able to raise funds from them?
A: What we bring to the consumer is the flexible credit line. We looked for a bank that was not too big but customer friendly. We could partner with them, and it would be a win-win situation for both of us. So we are partnered with RBL, which is a smaller bank and has a comparatively smaller presence and customers. In this collaboration, we bring them three things – customers, technology and innovation by mobility app.
Banks have certain technology and innovation, but they cannot innovate on user experience and build a mobile app, as we have done. So, the innovation itself is the novelty. Since they are comparatively smaller and looking to compete with big banks like HDFC and ICICI, they can use this product as a tool to increase the customer base, leveraging technology.
Q: Which technologies would you attribute the success of MoneyTap to?
A: AI is obviously the underlined pillar in there. Mobile app technologies, payment gateways that we integrate with, are already established tools. A cloud-based credit line is our innovation on the technology side. It comes with analytics, AI, ML and networks to run all of those. We use UPI and of course, have all the security audits in place. We comply with all GDPR and privacy laws; security is a constant focus for us with regular audits. Right now, we are going through ISO certification since it is needed to be one step ahead.
Q: This is the first time the product is developed in India. What challenges did you see in terms of technology, regulations, security or anything else?
A: I don’t see technology as a challenge. The challenge for us is customer education. It’s never easy to mass communicate. So, all our energies are spent on that. The app is very user-friendly, but based on customer feedback, we are constantly updating it. Secondly, since banks are regulated business, compliance is on top of all our minds all the time.
Q: What is next on the roadmap for MoneyTap?A:
Next thing for us is to scale. Currently, we are in 40 cities, we need to be in 400 cities. Also, we are planning to take out of India as well, because we find that any middle-income countries like India have a similar need with no credit card with a smartphone. As tier-2 towns become smaller cities, there is upward mobility with the population getting younger. It is both geographic as well as financial, so this product has a clear market set for it.