Meet the IIT Roorkee grads who co-founded FamPay, the neobank for teens

The firm provides also financial literacy to teenagers, who have few options to open a bank account at their age; It crossed 2 mn users within eight months of launch

Teenagers today have many options to choose from in every aspect of life. As the world increasingly becomes more connected and online, fueled further by the pandemic, responsible online spending and investment options are an area that is increasingly becoming more lucrative for this age group.

But how do they go about understanding what their options are and how to get started? Enter FamPay, India’s first neo-bank for teens. 

FamPay was founded in 2019 by Indian Institute of Technology (IIT) Roorkee graduates, Kush Taneja and Sambhav Jain while still in college.  

"To begin with, we had thought since we’re making an app for kids, we should name it something that explained the idea and target audience easily like PayTeen etc but then we realised that though we’re entering this market through teenagers, we definitely don’t want to lose the user once they’re not a teen anymore ," explain the co-founders.

So they thought about how the name should reflect the evolution of the product as the user grows. "Additionally, since our target audience were parents as well since we  were getting them on board as well, we wanted a term that resonated with all of them, and the thing they had in common was that it was all family based, hence FamPay. And also that “Fam” is a lingo, it features across all our branding, website, socials, and signifies that we are a young brand," they add. 

The reason they set up FamPay was that there was no product available for teenagers in India. 

The company provides financial literacy to teenagers, who have limited options to open a bank account in India at a young age. "They are the underserved segment who always have had to rely on cash or using their parents credit/debit card for the last mile closure of the transaction. Through gamification, FamPay is also making lessons about money fun for youngsters," the co-founders add. 

While the company does a fair bit of influencer and digital marketing, referral networks and word of mouth are its primary acquisition channels.

In June, FamPay raised a Series A funding round of $38 million with Elevation Capital and Sequoia Capital as lead investors. In March 2020, it raised seed funding of $4.7 million from Y Combinator, Venture Highway, Sequoia India and Global Founders Capital (GFC). Neeraj Arora, former business head at WhatsApp, Twitch co-founder Kevin Lin, Robinhood cofounder Vladimir Tenev, CRED founder Kunal Shah, Pine Labs CEO Amrish Rau also participated in the round.

FamPay has a numberless prepaid card and app with which minors can successfully use to make online and offline payments without the need to set up a bank account. A marketing and distribution partner of IDFC FIRST Bank Prepaid Card, FamPay aims to raise a new, financially aware generation of Indians who understand the fundamentals of personal finance and are capable of making decisions in their best long term interest.

In July, it also launched India’s first Visa Prepaid Card for teenagers with personalized doodles on it. The card will allow teens to make NFC (near field communication)-enabled contactless payments on the Visa network in India. The card will be available in two different designs - the FamCard and FamCard Me. Teens will be able to design their own card to reflect their personality, playing with names, fonts and doodles.

Teens can select from a range of over 200 doodles and signature fonts to create unique designs on their FamCard Me. They can also choose to put any name on the card, making it their own card, their own design. Added benefits of the card include 4x rewards on every spend, complimentary subscriptions of teen popular brands and exclusive Visa specific offers. 

It is innovations like these which sets FamPay apart from some of its competitors. "Teenagers today are very aware and are big influencers in almost all the major buying decisions in the household. Also since they are pretty hands on with technology they are able to search for the best prices online," said Taneja and Jain. 

FamPay crossed 2 million registered users within eight months of its launch and claims to be growing 100 per cent month-on-month.

The longer term view, say the co-founders, is to grow with the customers. "We would like to grow with our users. We would not like to lose them once they turn 18. We plan to support them in their financial journey even when they become adults by expanding our product offerings," they add.