Context:
Business-to-business (B2B) fintechs in India are increasingly shifting towards the consumer payments market, using third-party UPI applications (TPAPs) as their entry points. The move is aimed at reducing customer acquisition costs (CAC) and monetising their already large user base.
Business-to-Business (B2B) Fintechs in India
- B2B fintechs are technology-driven financial service providers that serve businesses (MSMEs, corporates, startups, banks, NBFCs, etc.) rather than individual consumers.
- They help enterprises with payments, credit, compliance, accounting, lending, and digital infrastructure.
- Unlike B2C fintechs (like PhonePe or Paytm), B2B fintechs operate behind the scenes to power business transactions.
Third-Party UPI Applications (TPAPs)
- Third-Party UPI Application Providers (TPAPs) are apps that offer Unified Payments Interface (UPI) services to users, but are not banks themselves.
- They provide the front-end app/platform while actual payment processing is done through sponsor banks (called Payment Service Providers – PSP banks) connected to NPCI’s UPI system.
- Example: Google Pay, PhonePe, Paytm, Amazon Pay, BharatPe.
