How Grip Invest used Cashfree Payments to optimise online payments for bond investments

About Grip Invest:

Grip Invest is a high-yield investment platform that swears by the mantra “Small Investments, Big Returns”. It is a leading alternative investment platform that focuses on investments beyond stocks, fixed deposits and gold. This includes investment options like corporate bonds and SDI. 

Challenge:

For bond orders placed with Grip Invest or any other Online Bonds Platform (OBP), exchanges (NSE/BSE) require Third Party Verification (TPV) before approving the order. This is needed to verify that the bank account used by the investor for making the payment matches the KYC-submitted account. Later on, NSE enabled customers to make online payments via UPI or Net Banking in addition to offline Bank Transfers (NEFT/RTGS/IMPS). All the operations were handled by NSE itself. This gave rise to 2 key challenges for Grip: 

1. Issue resolution greater than settlement time of the order

In the event of downtime or any other issues with NSE’s service provider, the investors may face issues in completing the payment. The resolution of these issues was NSE’s responsibility, and Grip didn’t have visibility into it. The resolution time often exceeded the settlement time for the order, which would result in an incomplete order. Incomplete orders caused investors to be penalised and debarred from the debt market for 15 days, resulting in financial losses and low customer satisfaction for Grip Invest.

2. Lack of transparency for bond investors on Grip Invest

Grip Invest and its customers did not have real-time visibility into payment statuses and failure reasons. This lack of transparency leads to uncertainty, reduces trust in the platform, and complicates timely issue resolution, as Grip had to rely on updates from NSE.

Solution:

According to the new NSE circular, The members can make an arrangement with any payment aggregator who has been authorised by the RBI to initiate this payment mechanism.

Grip Invest has integrated with Cashfree Payments to process Online Bonds Platform (OBP) transactions seamlessly while still complying with regulatory guidelines. With built-in Third Party Validation (TPV), the transaction will only be processed from the customer’s registered bank account, ensuring enhanced security and compliance. After the transaction, Grip provides the necessary details to the National Stock Exchange (NSE) for further processing. Cashfree Payments also handles the settlement of funds to NSE on the specified date and sends an MIS file to NSE post-settlement.

Impact:

1. Faster issue resolution

By using Cashfree Payments, Grip Invest can quickly identify and resolve payment issues, reducing the turnaround time (TAT) for issue resolution significantly. This minimises the risk of investors being penalised or barred from the debt market due to delayed payments.

2. Complete Transparency 

Direct handling of transactions and settlements through Cashfree Payments streamlines the entire process, reducing dependency on external entities and providing complete transparency into all the payments and orders.

3. Security and Compliance

By ensuring that transactions are only processed from registered bank accounts through built-in TPV, the solution enhances the security and compliance of transactions, aligning with regulatory requirements and safeguarding investor interests.