The pocket money app ditched a recognized bank in favour of a little-known non-bank entity to serve as its prepaid wallet partner. It has lost customers and credibility as a result.
On 24 February, R (name changed to protect identity), a 14-year-old from New Delhi, got a curious SMS from IDFC First Bank: “Zeta, a service provider to FamPay in the FamPay IDFC wallet program, is discontinuing operations. Hence to avoid inconvenience, we will discontinue credits w.e.f. 28.02.23. Kindly utilise the credit balance by 31.03.23. Thank you.”
In panic, R opened the FamPay app to check the status of the pocket money he had saved over the past several months. He wanted to immediately transfer it to his parents’ bank account. The app suggested another option: To re-verify his credentials to …
Ashwin covered fintech and banking at The Morning Context. Previously, he was at The Economic Times, where he worked across the finance, tech and startup verticals, breaking stories related to India’s banking system, startups in the new economy, digital payments, insurance and cryptocurrencies.
Writer
ashwin@mailtmc.com
Delhi