Fintech ventures heavily depend on machine learning (ML), artificial intelligence (AI), data science, and predictive analytics to assist in decision-making and problem-solving processes. Robo advisers, fraud detection, risk analysis, and customer retention and acquisition are a few examples of how data science and ML are applied to fintech companies to amplify and upgrade their offerings.
From facial recognition to voice-enabled payments, AI and ML have the potential to take fintech to the next level. According to reports, the AI in fintech market size is expected to grow from $959.3 million in 2016 to $7,305.6 million by 2022, at a Compound Annual Growth Rate (CAGR) of 40.4%.
However, there has been an issue of unaddressed payment challenges for businesses, in both bulk payments and disbursal. To mitigate such issues, Bangalore-based Cashfree is utilizing AI and ML to help both startups, as well as established companies, make digital payments work for them. In April 2019, Cashfree raised $5.5 million in a Series A round of funding.
Founded in September 2015 by Akash Sinha and Reeju Datta, Cashfree is a payment platform that automates inbound and outbound bank transfers. The company allows Indian businesses to automate bank transfers and accept card payments. Additionally, Cashfree also allows marketplace and fintech businesses to build payment flows around receiving and disbursing money.
Cashfree launched an industry-first product called Cashgram that makes e-commerce refunds fast and simple. Using this product, companies can send a web link to their users requesting bank account information.
Apart from Cashgram, Cashfree has also launched nine products, including six industry-first fintech innovations, which are Payouts, Instant refunds, Pre-authorization, Subscriptions, Same Day Settlements, and Instant Settlements. Also, as a part of the introduction of the ‘Instant Settlement’ feature, the company will soon extend the facility to other collection products, including auto-collect and marketplace settlement, besides Cashfree payment gateway users.
How It Is Different From Others In The Market
Cashfree is working with India’s leading banks to reshape the digital payments and banking space. The company is also helping these banks scale up their digital offerings by assisting rural, coop, and scheduled banks in setting up digital banking arms.
Products like Pre-Authorization help experience better customer experience by omitting the long refund processes. Akash stated, “We have seen merchants adopt Pre-Authorisations for different kinds of use cases, and it has helped make their digital payments process seamless and faster for their customers.”
How Cashfree Uses AI & ML
According to Akash, to safeguard its user-base in advance, Cashfree is focusing on building proprietary AI tech for fraud detection and cybersecurity within the banking infrastructure.
He said, “We are focusing on building a specialized team of experts who work in the field of AI, fraud mitigation and cybersecurity in banking.”
As part of the AI-driven risk and fraud prevention system, the company analyzes 100+ payment parameters, such as frequency of payment instrument at Cashfree, location, time of day, history of the payer, etc. within a few seconds, and gets a risk score for that transaction. Based on that risk score, Cashfree decides whether to proceed with the transaction or not.
Core Tech Stack
The core tech stack of Cashree systems is built using multiple programming languages. At the backend, the company uses Java, GoLang, Node.js, and PHP, and at the frontend, Cashfree uses a modern frontend framework to ensure optimal delivery of content to devices. The systems of Cashfree are hosted on the Cloud and are capable of scaling up and down by analyzing traffic growth.
Tackling Hiring Phase
Apart from the headquarters in Bangalore, last year, Cashfree launched operations in 3 more cities, Mumbai, Delhi, and Chennai, with a headcount of more than 100 employees. For hiring employees, this company looks out for great talents and the right market fit. While recruiting, Cashfree looks for fresh minds, specialized skill-sets, teeming with energy, and individuals who are willing to ‘work smart.’
To this question, Akash said, “Having created a robust platform that solves payment problems for the banking and payments industry, our next challenge is to rebuild and upgrade the payments and banking infrastructure of the country. ”
Currently, Cashfree processes more than $10 billion transactions at an annualized run rate, growing 25% month-on-month, looking to process transactions worth $30 billion in FY20. The company is focusing on working with India’s leading banks to reshape the digital payments and banking space for the entire industry.