Walnut, a personal finance management app, on Wednesday announced that it had tied up with Visa and ICICI Bank, to facilitate real-time P2P (Peer to Peer) money transfer to bank accounts using only debit cards – eliminating the need to remember and exchange account numbers and IFSC codes. The founders disclosed to YourStory that Walnut had earlier raised a seed round of $1 million from Sequoia Capital to boost growth.
Story so far
Walnut was founded in July 2014 by Amit Bhor and Patanjali Somayaji, who had been friends for 14 years at the time, and had also worked together at Codito, a Linux-based services company that Patanjali had started. Walnut started out as a personal finance app that analysed the SMS inboxes of users to surface important and critical information, including expenses, bills, and tickets. The team currently consists of 27 people.
Related read from 2014: Two startups, three acquisitions and a 14-year-old friendship – Amit Bhor’s journey
With multiple iterations over the last two years, Walnut's Android app can now be used to automatically track spends, bank and card balances, bill payments and split expenses within a group, without the need of bank passwords. The app generates visualisations and 'smart insights' of monthly expenditure, and allows the user to keep a tab on their money.
With its latest update, Walnut also facilitates debit card-to-debit card P2P payments without the need of bank account numbers and IFSC codes, and Visa credit card bill payments.Walnut claims that this makes it India’s first app to enable any bank-to-any bank money transfers. The iOS version of the app, called WalnutPay, enables users to split bills and send or receive money from friends, using only debit cards. However, because of the limitations Apple poses, the iOS version of the app doesn't have the other feature (personal finance) that is available on Android. Based on user feedback and market research, Walnut saw the need for features to manage shared expenses. Amit, CEO of Walnut, added,
Young professionals and college students travel to different cities and live with roommates and friends. Managing shared expenses and quick money transfer is a task critical for them, but it is time consuming. The new bill split and pay features eliminate the friction around paying friends. As part of this collaboration with Visa and ICICI Bank, we have also innovated on a simple and secure way to pay credit card bills. By partnering with key players in the financial ecosystem such as Visa and ICICI Bank, we plan to bring more useful innovations to our 1.5 milllion users.
How Walnut works
Amit claims that while Walnut analyses a user's SMS inbox to generate bills and tickets, it doesn't analyse personal messages coming from 10-digit mobile numbers, and is designed to view only the messages coming from businesses. Users can also backup their data on the cloud and delete their SMSs if they wish.
To split an expense with friends, users need to select the expense that is automatically tracked by Walnut, and choose friends to split with. In order to settle an expense or make a P2P money transfer, a user needs to enter his or her own debit card. The funds are transferred securely between Visa accounts, without the need to share personal details such as bank account numbers or IFSC codes, and with no mobile wallets in between.
Users without Visa debit cards can also use the bill split and money transfer feature on Walnut. To facilitate P2P money transfer to eligible Visa accounts, Walnut uses Visa APIs and the ICICI Bank payment gateway. While all transactions are processed through ICICI Bank, the facility allows customers to transfer funds using any bank's Visa debit cards.
Revenue model and marketing
Walnut is currently a pre-revenue company, but aims to start monetising through different channels in the future once they achieve sufficient traction. They are currently running pilot programmes to explore different revenue streams. Amit noted that they are a 'made in India, for India' app and their most active user base consists of youngsters in the age group of 21 to 30. Walnut is currently free to download and use for end consumers, and is trying to gain the convenience of wallets and merge it with the utility of bank accounts. He said,
We enable direct money transfer between two bank accounts. There is no prepaid instrument in between, so money can't get stuck anywhere. Most banks will charge for a transfer, but we are providing the service for free at this stage.
Amit said that Walnut has been working with Visa for the past six months to bring Visa Direct, which is popular abroad, to India. T.R. Ramachandran, Group Country Manager, India and South Asia, Visa, said, “Visa has launched Visa Developer, an open platform to enable and support our clients and partners to create innovative commerce experiences faster, and with greater flexibly. The platform provides access to Visa’s APIs for a suite of Visa’s payment products and services.”
As their Android app is more feature rich, and India is mainly an Android market, Walnut considers it to be one of the primary channels. But Amit noted that most iOS users make a lot of high volume transactions, and hence they are an important target market too.
Sector overview and future plans
As more of India joins the digital economy, making more transactions online, the need for finance management apps will continue increasing. Time's Internet-backed Smartspends, Moneyview and Slonkit are some of the interesting players in the money management space. When it comes to shared expenses, the market plays host to both global players like Splitwise, and Indian entities like KnoDues and Happay, a business expense management solution for SMEs.
Kusal Roy, Senior General Manager, ICICI Bank said, “At ICICI Bank, we have always leveraged technology to introduce digital innovations and provide a world-class banking experience to our customers. India is among the top three internet users in the world (and internet is being accessed on phones), which is resulting in exponential growth in mobile banking. It is also bringing about a shift in consumer preference, wherein customers want innovative solutions on the go, which is evident from the popularity of apps like Walnut.”
Related read: 11 financial apps that can do wonders for your wallet
Amit noted that their plans for the next few months is to reach a sizable user base, drive transactions, and then start monetising. Walnut aims to expand to a team size of 35-40 people in the next few months to sustain growth. The startup also claimed that they had already closed a series A round of funding prior to this, but declined to share more details at this stage.
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- Sequoia Capital
- ICICI Bank
- Mobile banking
- Amit Bhor
- Walnut app
- Patanjali Somayaji
- personal finance app
- bank-to-any bank money transfers