Walrus is among a new generation of challengers ready to tap into India’s young adult digital payments market. But, according to CEO, it’s not all about spending
Last year, Pooja Bhandary (43), a pathologist in Kolkata, opened an account for her 13-year-old daughter at the bank where Bhandary has her savings.
Her daughter, who loves to paint and is a voracious reader, gets a fixed amount transferred from her mother’s account at the start of each month. She uses her physical debit card and net banking facilities for online purchases of books and stationery, and the occasional treat from Burger King. Last month, she took her mum and grandmother to dine out on the latter’s birthday. She has learned to issue cheques for larger amounts and is now planning to get a recurring deposit fund – a way to earn interest at very attractive rates by committing to regular monthly investments.
Bhandary wanted to teach her daughter to value money and plan her expenditure and savings when she got her the child’s account, but she’s now amazed at her offspring’s growing interest in investing in stock markets and mutual funds.
As far back as 2014, the Reserve Bank of India, the central bank, allowed children to open savings, fixed and recurring deposit accounts through a guardian, and a child over 10 could operate these accounts independently. This means banks, at their individual discretion, may allow them to use additional facilities like debit and ATM cards, net banking, cheque books, etc, but, in order to manage the associated risks, may impose an upper limit on the transactions, and a minimum positive balance.
The Indian banks have a lot going for young users – they’ve freed Bhandary, for example, from micro-managing her daughter’s expenses while making the teenager feel independent and important – but they don’t give them access to digital wallets. Similarly, Google Pay and Amazon Pay don’t allow children to set up accounts because of know-your-customer (KYC) issues.
But India’s neobanks and payment apps for teenagers are now beginning to expand their financial horizons.
FamPay, for example, which is designed for users between 10 and 18 years of age, lives on the users’ smartphones and connects them to a social feed where they can share their expenditure and updates. In July, founders Kush Taneja and Sambhav Jain launched a stylishly black, Rupay-enabled, numberless debit card called the FamCard that can be used to make both offline and online payments through India’s realtime payments network UPI (Unified Payments Interface), peer-to-peer, without setting up a bank account.
The card doesn’t carry a number, all details are saved in the app. To order a card, a parent and child have to first set up an account on the app and complete their respective KYCs. The app uniquely allows the family to set up a FamPool account via which not only allows the parent to send money to the child’s digi wallet, but also lets them keep tabs on expenses in the background while the child uses the wallet, independently and intrusion-free.
And then there is Walrus. Currently in beta mode, it focusses more on the community aspect of the banking app for upwardly-mobile, urban teen groups in India that are tech savvy, brand-conscious and active on social media channels like Instagram. Founded in 2019 by a young-but-experienced trio of entrepreneurs – Bhagaban Behera (CEO), Sriharsha Setty (CTO), and Nakul Kelkar (COO) – Walrus offers users, aged between 13 and 22, a free bank account, a glitzy debit card, UPI payment options and easy money transfer avenues. It comes with the explicit intention of teaching money handling to young users, who need invitation codes to activate their account or upload a scanned identity card image.
Crucially, both FamPay and Walrus link teen accounts with their parents, safely overcoming KYC in order to allow kids to pay digitally through their wallets.
“We target the aspirational teenager,” says CEO Behera. “ The new generation are more independent, more ambitious and want things their own way. They prefer to use Instagram over Facebook. They want apps that are cool, that understand them, and are tailor-made for them.”
The founders conceived Walrus as ‘like an Instagram version of a bank account for the Instagram generation in India’. It aims to embrace cash-using, high-spending young adults and convert them into digital payment users.
Behera says: “In the metros, the children are outgoing. They go out with friends, they spend on gaming credits like Google Play credits, they play PUBG (PlayerUnknown’s Battlegrounds) and Fortnite, they buy from ecommerce sites like Flipkart and Amazon. They frequently order food from Domino’s or McDonald’s, or via Zomato and Swiggy [Indian delivery companies]. We allow them to use their own card for this expenditure.”
Walrus also targets a second set of users who are in the tier two cities of India, and whose parents are likely to be less digitally savvy than their kids. Behera cites evidence of these young people using their cards to pay taxes and bills digitally for adults in their household. He believes that launching Walrus accounts for these users would help digitise a much larger part of India’s semi-urban population. “We didn’t see them as a use case initially, but the data pointed them out for us,” he says.
Huge and lucrative market
Globally, the teen market has huge potential, and very little of it has been tapped, given this group of users are among the most tech-savvy and brand-conscious.
Nielsen has ranked the Indian teenage market the third most brand-conscious in the world, while Indian industry body ASSOCHAM also concluded from research that upper-middle class teens in the metros spend an average of Rs4,000-Rs5,000 (€46-58) every month on their wardrobes and following their favourite movie stars, models and sportsmen and women for fresh fashion ideas. So, we know they can spend it, but can they handle money responsibly?
That’s where neobanks like Walrus in India, and Zelf, Starling and others in Europe, are hoping to fill the knowledge gap.
“Children don’t learn basic financial management, they don’t know how to budget and invest money. Introducing them to money when they are young, means they are already disciplined when they start earning,” says Behera.
The Walrus app makes the learning experience fun, practical, and secure.
“Parents can give money to children without having to use cash, and children get the Instagram and Snapchat experience. They have fun dealing with money, saving, investing, creating goals and budgets,” he adds.
Like FamPay, Walrus offers zero balance, free accounts with no hidden charges. The plan is to work with retailers, devise a reward-based system for users and also function as an aggregator.
“We work with merchants focussed on teenagers and other services we can provide to the age group. We don’t want to restrict ourselves to payments. We can tie up with other entrepreneurs, other companies, and curate a lot of products and services that this segment can use. It could be health and fitness, education or co curricular activities. We want to become a one-stop-shop that has everything for a 15-year-old,” says Behera.
While Indian kids have been ready for their own digital wallets and payment apps for some time, what happens when they grow up and out of them?
Behera says Walrus will mature with its users, with whom it already has a great feedback loop that informs its developers. The split your bill facility was an on-demand case in point.
“Say five of you go to a restaurant together, you can split your bill easily,” says Behera. “Or your friend’s birthday is coming up and 10 of you are going to celebrate it together; you can use Walrus to all save money towards it. We have talked with users and built in features that they want and which a [mainstream] bank will never want to build,” he adds.
While these banks’ adult account holders are concerned with loans, EMIs, investments, insurance and retirement options, Walrus’ are more interested in buying books, going to a restaurant or watching a movie. It’s focussing on building perks and rewards around these.
So, would Bhandary allow her daughter to use the Walrus app? She admits that digital payment is useful – not just because it’s cashless and therefore safer.
“It encourages her to do her own maths at the beginning or end of the month, and, as a parent, I want to instil those values in her,” Bhandary says. “Setting goals is great, chasing them is good too. It’s also important for children to understand that money is a great enabler. Its not everything, though. And that’s where we parents still need to keep a check.”