Decentro, India’s leading Banking-As-A-Service startup, has launched its Penniless Bank Account Verification (BAV) API. Making it one of the first companies to launch such a product, it aims to help enterprises save over 5 – 10 man hours and close to Rs. 50 – 75 per onboarding of every new consumer or merchant.
The first method of Penniless BAV, in contrast to the penny drop BAV process, is a method that allows an enterprise to obtain the name of a bank account holder or the status of the account using only the bank account number without requiring any nominal financial transaction. While penny-drop BAV brought in significant efficiency and security gains compared to manual verification, it still leads to failures in many cases, such as a wrong IFSC code entered or if the bank has merged with another bank.
This is mainly because penny drop verification involves an actual Re. 1 (or penny) being sent from the source account to the destination for verification, and any issue during this entire flow leads to a failure. Moreover, for companies handling recurring payments and large-scale transactions, penny-drop verification increases the risk of sending funds to a fraudulent account unnecessarily. Penniless verification solves these pain points by eliminating the movement of money, ensuring a success rate of more than 99% (per the company’s benchmarks) and decreasing customer onboarding time even further.
The second product, called Reverse Penny Drop or Penny Pull Verification in other words, essentially as the name implies, asks the user to make a Re. 1 payment (via UPI) instead of asking for the full account details and then depositing the Re. 1 (penny) as per the old methods. The interesting part here is that for a user, it is just like making a regular UPI payment online, and he doesn’t need to remember any of his long bank account details at any time. Once he makes a successful payment of Re. 1 via UPI, the aggregator / financial entity can then receive his verified bank account details as well as the actual registered name from the banking ecosystem in the API response itself.
Commenting on the launch of these new flows, Rohit Taneja, Founder & CEO, Decentro said, “Since our inception in 2020, we have been driven by a singular goal of building a robust financial infrastructure for Indian fintechs and enterprises so that they can focus on innovation without having to spend their time sorting out the infrastructure. This has empowered us to find solutions and build products across the payments and banking value chain, giving us a significant advantage in having the most robust and safest data and financial flow ecosystem. This has helped us gain an airtight reputation in becoming one of the first banking infrastructure companies to launch a penniless verification module, which has a large potential to reduce costs for enterprises and make their financial flows safer.”
With only 30+ financial institutions using these new penniless & reverse penny drop-based verification processes in India, the potential for such a technology is significant. Decentro aims to capture the majority share of the market with its superior technology and end-to-end technology stack, which has the potential to deliver the fastest verification process most securely.
Notable players in the BFSI & fintech space have been building their platforms & journeys on top of the modular Decentro platform, such as Uni Cards, MoneyTap, CashE, Potlee, CreditFair, and many more. These 2 new & innovative offerings have already brought about the success rate of the overall bank account verification API suite of Decentro to more than 99.4% in the market.
An early user of the bank account verification module from Decentro – Bhavik Davda, VP of CreditWise Capital, said, “Decentro’s APIs helped CreditWise Capital’s Twin2 with KYC and banking prowess. This lets us get the job done for both ID collection & verification and Bank Account Validation seamlessly. The way Twin2 can now collect information seamlessly from the user is amazing. Hope to grow a long way with Decentro.”