UPI is no less than a revolution in the digital monetary system of India. This quaint feature is the kingpin of “Cashless” transactions. Nobody wants to be omitted from it. However, you can use UPI only if you are above 15 years old with a single bank account. What about teenagers below 15? Although Indian banks have their own reasons to leave these teens out, still they long for UPI/digital transactions too. So here comes “FamPay” which enthralled the public with its electronic payment methods for teenagers.
Doesn’t it sound too good to be true? Your mind must be hovering with questions like- What is FamPay? How can it provide a feature that even Indian banks can’t? How does it make money? Etc.
You will get a detailed breakdown of the “FamPay Business Model” in this article. Keep reading!
What Is FamPay? : A Brief Overview
FamPay is an Indian fintech startup that aims to provide digital payment services to adolescents. The app enables teens to make online and offline payments, manage their finances, and learn financial literacy skills. FamPay aims to empower teenagers to become financially independent. It also makes them financially responsible by providing them with a safe and secure platform to manage their money. But what if they misuse the app? Worry not! FamPay developers are astute enough to put a smart feature in it. This app allows you to track, monitor, and control your children’s spending. This app is not only easy to use but also provides rewards and cashback incentives.
Before diving deep into the FamPay business model, let’s have a quick overview of the company.
|Type of Industry||Fintech company|
|Founders||Sambhav Jain (CEO), Kush Taneja|
|Headquarters||Bengaluru (Karnataka, India)|
|Operating Space||B2C (Business to Customer)|
|Market Valuation (FY22)||Rs.350 crore|
|Revenue (FY22)||Rs.3.06 crore|
|Expenses (FY22)||Rs.50.62 crore|
|Net Profit/Loss (FY22)||Loss of Rs.43.36 crore|
|Competitors||Walrus, Prepaid Ventures, Greenlight, UnionPay International, DANA, BillGo, etc.|
Working Strategy: How does FamPay work?
FamPay is a teen-focused fintech startup that enables those under 18 to make digital payments.
Key Working Strategies
- Providing a safe and secure platform: This is the foremost part of FamPay’s working strategy. FamPay ensures that its app is secure and easy to use for teenagers. It also provides features such as parental controls and transaction limits to ensure that parents can monitor and control their children’s spending.
- Building financial literacy: FamPay aims to promote financial literacy among teenagers by providing them with educational resources and tools. The app offers a gamified interface to teach financial literacy skills and rewards users for learning and practicing good financial habits.
Offering rewards and incentives: It offers various rewards and incentives, such as cashback on transactions and referrals, to encourage teenagers to use the app and make responsible financial decisions.
- Partnering with merchants: FamPay partners with various merchants to offer discounts and cashback to its users. This partnership also helps FamPay increase its user base and generate revenue. Its prominent partners are-
For instance, FamPay successfully drove new leads for its partner “Unacademy.” The ed-tech platform witnessed a massive surge in enrollments for their scholarship tests. Children paid for it through FamPay.
Significant Features of the App
FamPay is filled with the following lucrative features-
- Numberless Card: Unlike ordinary cards, FamPay cards are numberless. Meaning the physical card lacks the 16-digit card number and CVV. But the number is available in the app. This feature makes the card safe and prevents any kind of misuse in case you lose the card.
- Sign up: Teenagers can download the FamPay app from the app store and sign up using their phone numbers. Once signed up, they can create a profile and link their bank account to the app.
- Add money: Adults can add money to their FamPay wallet using their bank account or UPI ID. The added money can be used for online and offline payments by their children.
- Make payments: It allows you to make payments to merchants, friends, and family members through the app. They can also use the app to pay bills, recharge mobile phones, and buy gift cards.
- Monitor transactions: Parents can monitor their children’s spending on the app and set transaction limits and controls to ensure responsible spending.
- Earn rewards: Users can earn cashback, rewards, and discounts for using the app and making responsible financial decisions. With every payment through FamPay, you can earn a chance to earn FamCoins. It provides lucrative offers that are beneficial for the user.
How does FamPay work?
You can send money to your children (teens) via the FamPay app. Once you add money to your kid’s FamPay account, they can spend it safely under your supervision. This payment app provides numerous services such as-
- Digital payment services
- Payment of bills
- Sharing the expenses
- Tracking the expenses
To use this app, you need to download it first from an authentic source (Google Play Store or iOS app store). Then you need to complete the registration process and link your bank account. Thereafter, you can add funds to the FamPay account from which your child can access the payment by login.
Also, you will receive a FamCard which is a prepaid card. It works like a regular debit card. You can swipe it at offline merchants after putting money into it. Never confuse it with a credit card. Because you won’t be able to use it once your payment amount exceeds your bank balance.
Revenue Sources: How does FamPay make money?
In FY22, FamPay earned a total revenue of Rs. 3.06 crore. Basically, it has a commission-based revenue model. Its prime revenue sources are-
- Commission-based revenue model: As you know, FamPay charges a fee for every transaction processed on its platform. FamPay makes money from the commissions that it receives for every transaction made on its platform. This is a sustainable revenue model with which the company has grown its user base. In FY22, it earned a revenue of Rs.1.74 crore from the sale of services.
- Interchange Fees: it refers to the fee deducted from the merchant’s bank whenever a customer makes a purchase through a card. FamPay could charge merchants a fee for accepting payments through their platform. This could be a percentage of the transaction amount or a flat fee per transaction. In the fiscal year 2022, it earned a revenue of Rs.1.2 crore from the interchange fees.
- Premium Services: It provides numerous premium services like FamPay Classic, Plus, and Ultra. All these provide an additional source of revenue.
- FamPay Classic: You can ensure faster payments with a virtual FamX card and UPI ID.
- FamPay Plus: You can upgrade your payments with higher limits, rewards, and special benefits.
- FamPay Ultra: It is the highest premium membership. It offers a free FamX card, ATM withdrawals, and priority customer support.
FamPay uses the following marketing strategies to promote its services-
- Video Ads: Short videos are one of the most effective ways to influence the audience. The key highlight of these ads is “Numberless Card for Teens.” This tagline automatically catches the eyes of teenagers as well as parents who want a digital payment solution for minors.
- Social media marketing: Teenagers are highly active on Social Media platforms. Hence, FamPay uses Instagram, TikTok, and Snapchat to reach out to their target audience i.e., teenagers. It creates engaging content that resonates with teenagers and showcases the benefits of using this app. Social media influencers can also be used to promote the platform.
- Partnership marketing: FamPay undergoes partnerships with schools, colleges, and other educational institutions to promote the services to teenagers and their families. It also partners with brands that appeal to the teenagers, such as fashion or gaming brands, to create co-branded marketing campaigns.
- Content marketing: FamPay creates educational and informative content on its platform in the form of blogs. It explains the benefits of digital payments to teenagers and their families. For example- Study habits that are simple and effective, how to save extra bucks while shopping, etc.
- Other modes of Marketing: Apart from the above marketing strategies, it also uses traditional marketing methods. Such as print ads, billboards, radio ads, etc. It helps to reach out to teenagers and their families who may not be active on social media.
Since FamPay’s target audience is teenagers. Therefore, it needs to prioritize users’ trust and safety. Hence, it uses advanced security features and data encryption in its working strategies to secure the customer’s information. It has diversified its revenue streams to earn a higher income. Also, it expanded its user base with effective marketing strategies. Thus, with the efficient business model, FamPay became one of the most successful fintech companies in India.