NiYO partners with banks such as YES Bank and DCB Bank to offer salary accounts and issue a debit card or a prepaid card to employees of a company. The banks make money on the float, and Niyo makes Rs 200 per account in annual fees. In the back-end, the NiYO app integrates with HR management systems of companies, helping them track benefits and claim reimbursements.
Recently, it launched a forex travel card, which is 4-5 per cent cheaper than other cards in the market. ‘‘Both blue-collar and global traveller businesses are individually large opportunities. The company has a great start and an opportunity to be the leading neo bank in these segments,’’ says Sanjay Swamy, co-founder, Priven Advisors, the investment advisor to Prime Venture Parnters, an early investor in Niyo.
There are close to 100 million salaried people in India who are earning less than Rs 15,000 across MSMEs, organised and semi-organised sectors. NiYO currently serves around one million users, and aims to open five million more accounts for employees of small enterprises in the next two years.
Neo banks globally operate in two models: On digital licences in countries where such licenses are issued, and in partnership with existing banks. There are two differences with conventional banks. It is branch-less, mobile-first banking. Two, the major banking experience is on the mobile app, which combines banking with travel, savings or other experiences. Typically, they offer low transparent charges to the customers. Examples of large global neo banks are Revolut, NuBank, N26, Monzo, which are valued between $1 billion and $5 billion.
NiYO Bharat and NiYO Global are the two major businesses that NiYO Solutions operates. People can open zero-balance accounts with NiYO Bharat app, which provides facilities like locking and unlocking the NiYO Bharat Payroll Card, has no minimum balance requirements and enables users to manage their income, benefits, payments, and investments.
NiYO’s second offering is NiYO Global Travel Card, where users don’t have to pay any currency exchange premium and international transaction fees, unlike in a regular forex card or credit and debit card. Essentially, it is a rupee card and is converted at the VISA exchange rate, resulting in a savings of 4-5 per cent on the transaction amount. The card can be charged digitally using a bank account.
Revenue & road ahead
NiYO makes money from annual fees and merchant discount rate (MDR) charges levied on transactions made at POS terminals, which is also the source of revenue on its forex card. NiYO aims to achieve four-fold growth in revenue by the end of FY20 and roll out products in Southeast Asia.
By 2021, NiYO intends to achieve cash break-even and a 5 per cent market share of the neo-banking sector.