Card fintech company Slice to receive prepaid pay licence from RBI

By Team Startupcity  |  Friday, 16 December 2022, 09:08 IST

Card fintech company Slice to receive prepaid pay licence from RBI
Card-fintech platform Slice is about to receive a prepaid payment instrument (PPI) licence from the Reserve Bank of India, multiple people aware of the matter. This comes after the fintech firm came under pressure earlier this year after the banking regulator barred prepaid cards from being loaded with credit lines. According to sources, Slice plans to open minimum know your customer (KYC) PPI accounts for teenagers as it looks to widen its user base and target a newer cohort of users.
The licence is also in line to double down on offerings for its waitlisted customers. Previously, Slice was issuing prepaid cards through a partnership with SBM Bank in India and riding on the latter’s PPI licence.
RBI guidelines currently allow small PPIs or minimum-detail PPIs to load up to Rs 10,000 per month and not exceed Rs 1.2 lakh during the financial year. Sources said Slice would tap the teenage segment with these small PPI accounts requiring minimum KYC requirements. “This will be via minimum KYC which will allow these users to spend up to Rs 10,000 a month as per banking rules. That’s also typically the amount they spend in a month,” the source quoted earlier added.
Slice will also issue PPI cards to this new cohort of users, people aware of the company’s plan said. According to RBI rules, small PPIs can be used only for purchase of goods and services, with cash withdrawal or funds transfer not permitted from the instrument. In May, Slice said that it was adding the Unified Payments Interface (UPI) offering to its product portfolio, as it looked to cater to waitlisted customers through newer products.
The fintech firm said it had 10 million waitlisted customers in May. It was also looking to enable Near Field Communication (NFC)-based payments (contactless payments) on its app. This was before the RBI released a note to fintech firms in June, stopping them from loading PPIs with credit lines. During its peak last year, Slice had been issuing 200,000 new cards each month to its user base.
Slice’s plan to target a new cohort of teenagers brings it in direct competition with several other startups already operating in the segment, including General Catalyst and Sequoia-backed Fampay; former Paytm-executives Shankar Nath and Ankit Gera led startup Junio; and Gurugram-based Fyp Money, among others.

CURRENT ISSUE

BEST STARTUPS TO WORK FOR

siliconindia