ICICI Bank is reportedly acquiring a minority stake in early stage fintech startup Tapits Technologies. The startup helps merchants accept digital payments through Aadhar biometrics – with the objective of promoting Aadhaar-based payments.
The bank is said to invest Rs. 99 lakh in return for 9.9% stake in the company. Tapits Technologies was incorporated in April 2016 and had revenues of less than a lakh for financial year 2016-17. The transaction with ICICI for minority stake is expected to be done by the end of February 2018.
Tapits Technologies’ website says the startup is working on innovative ideas and products including disruptive Point of Sale (PoS) device, FingPay. Not only does FingPay enables payments to be cashless but it also makes it cardless and mobile-less. The fintech startup provides biometric POS devices and solutions to accept payments in a more convenient, fast, simple and secure manner – as per the website.
Tapits also does technology consulting in the Fintech domain providing banks and insurance companies with innovative solutions including custom ones based on industry needs.
Banks and fintech startups have increasingly been partnering and collaborating in the recent past. Last year, the country’s largest bansk, State Bank of India (SBI), had invested 20 crores in Gurgaon-based fintech startup Aye Finance. With the promotion and growth of ‘digital’, even traditional banks are faced with the choice of either adapting or losing out on market share.
Another major reason that banks and fintech startups are collaborating is due to the revolution of ‘data-driven’ products and services. Traditionally, banks rely on human decision-making wherein startups have turned to artificial intelligence (AI) and machine learning, using algorithms. Both have their pros and cons but the latter is perceived to be more accurate, fair and without prejudice.
Fintech startups, as opposed to banks, are also looking to solve specific problems and are therefore developing solutions accordingly.