[Tech50] How FamPay Helps Educate Kids About Finances

As young engineering graduates, Sambhav Jain and Kush Taneja were often tasked by family members to book online – either plane or movie tickets, or grocery orders and take out on platforms such as Swiggy and BigBasket. They remember their parents sitting next to them during this process, their debit or credit cards in hand, or having to call them to get OTPs (one-time passwords).

After conversations with friends and teenagers, the duo soon realized that most parents had enlisted the to help of their children to help them transact online, even if they did not have their own online banking credentials. Also, as they reflected on this dichotomy, many of their friends were interviewing for jobs and when the topic of money was brought up they realized that young adults in India were not equipped to have conversations about money.

This helped them to arrive at the basic framework of FamPay – a fintech startup that gives teenagers under 18 the power to assert their own financial independence through an app and a debit card.

“Our goal was to help kids understand how money works and what financial planning means,” say the founders.

The FamPay product suite includes a application reserved for adolescents under the age of 18, which generates a physical and a virtual card which can be used like any other map on all platforms. Children do not have to depend on their parents for OTPs and can plan their purchases by saving for them.

The startup, which currently has around two million users, was selected within the framework of YourStory Tech50 cohort for the large market it caters to – nearly 40% of India are young adults under the age of 18, and its first-mover advantage in space.

How it works

Once the user has registered with the application, a virtual card is generated for them. This virtual card can be used like a regular debit card on all online retail platforms. For offline payments, a request can be issued for the physical counterpart of the virtual card.

Startup allows users to Personalize their cards to their liking – such as choosing a name to display on their card, or selecting an avatar from a range of options offered, and making it more individualized and more representative of their personality.

FamPay aims to leverage the community of children it has on the app to curated brands that specifically target this segment. He explored chords with brands for teenagers to activate e-commerce on its application platform.

Parents can transfer fixed amounts to their children using the FamPay app, instead of giving them unlimited access to their bank balance, as well as set a monthly budget and track their spending.

FamPay uses Native Android, iOS stack for the mobile application. Its front-end stack consists of React & Next.js using Typescript. The backend uses Django, Postgres, and Redis. For analysis, FamPay uses MixPanel and Metabase.

Revenue and funding

FamPay has so far increased $ 42.7 million in investor financing, including Elevation Capital, Venture Highway, Sequoia and Y Combinator. It currently has over two million users on the platform.

The startup’s turnover is between Rs 5 lakh and Rs 25 lakh.

Its competitors include neobanks such as epiFi, Junio, and Walrus, which are also aimed at adolescents and young adults.

Plan ahead

FamPay said Your story he is currently working on introduction of an e-commerce section on the application that can help teens discover brands that meet their specific needs, whether it’s a clean ingredient skin care business, a mental wellness platform that can help them to manage the stress of exams or an edtech platform.

He added that he will consider playful concepts such as investing, term deposits and other financial services on the app so that its users can understand finance holistically before becoming financially independent.

The global neobank market is expected to grow at a compound annual growth rate (CAGR) of around 46.5% between 2019 and 2026 to reach $ 394.6 billion, from $ 18.6 billion, according to Zion Market Research. With more fintech startups moving towards a full-stack financial services model, FamPay, having the first-mover advantage, is well positioned to capitalize on the opportunity.

Edited by Ramarko Sengupta

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