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How Pencilton aims to disrupt the kids’ fintech space with contactless smart cards

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In today’s digital world, financial literacy has become equally important as other skills for children to learn at a young age.

While it is still not part of the traditional educational system’s curriculum, new-age neo-banks and fintech apps are teaching children below the age of 18 important financial skills, such as savings, compound interest rates, along with ways to track their pocket money and expenditures.

One such startup is Pencilton. Founded in 2020 by BITS Pilani alumni Vishwajit Pureti, Ashish Singh, Pallavi Tipparaju, and Viraj Gadde, this Hyderabad-based startup aspires to educate the younger generation on financial literacy and management, and aims to be the most innovative and prominent player in this space.

Operating in beta since April 2021 with more than 17,000 users, the startup has launched an NCMC-compliant (National Common Mobility Card) prepaid RuPay smart card — the PencilCard — on January 27, 2022, which works with the Pencilton App on iOS and Android devices. The card is can be used without the app too, once the KYC is done by the parent/guardian.

Vishwajit tells YourStory, “Pencilton app allows for gamified learning around pocket money, facilitated by interactive community involvement, making it more than just a payment app. Quizzes and exercises at various levels are included in this type of learning, and youngsters can earn PencilPoints while learning about money.”

PencilCard

How it began

Pencilton’s origin lies in a project Vishwajit and his co-founders (then classmates) executed in 2018 with a school in Calicut during their time at IIM Kozhikode. 

Aimed at teaching kids about money via presentations and curriculum building, they built a small boardgame to demonstrate various concepts of money using currency denominations, letting them buy a house against a loan, buying insurance for a house, storing money in the bank to get more money (interest), etc.

“The response was fascinating. We ended up building a simulation using virtual currency and gamified learning, essentially like a ‘Farmville meets Monopoly’,” recalls Vishwajit.

This led the team to build Kubero, where they worked with multiple schools across Bengaluru, Kerala, and Hyderabad

“Based on increasing feedback from parents that they wanted to link real pocket money to the gamified learning in the simulation and also based on our own observation that kids wanted to have access to various financial tools (such as a debit card) easily, we pivoted in 2020 to start Pencilton,” he adds.

While Kubero is not functional anymore, the simulation, algorithms, and backend remain in Pencilton.

Founding team of Pencilton

An all-encompassing fintech product

Essentially, teenage users can use Pencilton’s smart card without a bank account and use the app to view and manage their balance and spending.

To start using Pencilton, users need to sign up on the app and add their parent/guardian. Once the parent/guardian’s KYC is completed (virtually), the child’s virtual card is activated instantly. 

The parent/guardian will have to use the app to send pocket money to their kids. They can also approve money requests, set spending limits, track the expenses of their child, avail spending reports, and use additional gamified features like badges, levels and points, and more.

Pencilton Smart Card

The Pencilton app allows teenagers to learn more about savings by setting savings goals, and also has a ‘digital piggy bank’ to save money. They can also finish chores assigned by parents on the app for bonus pocket money. 

“Parents can give pocket money with ease at the tap of a button on the app, have an overview of the spend (not detailed transaction-wise details) of the spend, give savings challenges, give reward-based chores, and teach kids the basics of money,” says Vishwajit.

Apart from the virtual card, Pencilton has also launched a physical card. While the digital card is free of cost, the physical PencilCard is priced at Rs 199. However, right now, as part of the launch promotion, users can buy this at Rs 99.

If a parent/guardian doesn’t want their child to use a smartphone, they can still buy a physical card for the child and themselves use the app to add money and track expenses on their phones.

The startup claims that the PencilCard is a Platinum RuPay card, which has additional benefits like free access to lounges at all airports in India.

An all-in-one card

“The fintech for teens space has grown rapidly in recent years, highlighting the need for innovation and technology adoption to make financial literacy more accessible to teens. Therefore, Pencilton chose to bridge the market gap,” says Vishwajit.

For teenagers, a single PencilCard can serve multiple needs as it works online and offline just like any other debit card and can also doubles up as a metro card, and bus card.

The smart card is already compatible with Delhi Metro (Airport Line) and as a bus card in Goa (across KTC buses). It is also scheduled to be accepted for metro travel in Pune, Chennai, and Mumbai, as well as a bus card for BEST buses (Mumbai). 

YS Design Team

Vishwajit explains, “PencilCard aims to transform the entire debit card experience as it is equipped with NCMC’s unique features. This card is a part of the most advanced generation of contactless prepaid debit cards that can be used for payments across various channels, including retail shopping offline, online shopping, travel and in the future — tolls and parking, among others.”

It also comes with the capability to store seasonal tickets and monthly passes, using which Mumbai Local authorities are planning to let season ticket holders top up the ticket via the card and purchase tickets. 

The card is designed and packaged keeping minimum wastage during manufacture and unboxing in mind. 

Market, funding, and future

The teen/pre-teen banking segment is nascent and growing rapidly. Vishwajit says there are 250 million teens and students in India, the largest percentage of teen and student population for any country in the world.

Neobanks such as FamPay and Junio are also focusing on building fintech products for teens and young adults.

The startup’s initial focus will be on acquiring customers to expand its user base.

“We plan to build a user base of teens and their parents. This will give us two of the most valuable user sets which we can monetise via cross selling and upselling (using fintech and financial education tools) as we scale up. We will also earn interchange on the money transacted on our cards platform,” Vishwajit says.

Last July, Pencilton raised $330,000 in a Pre-Seed round led by Jupiter (registered as Amica Financial Technologies Pvt Ltd). 

The round also saw participation from prominent founders including Nilesh Patel and Prashant Singh (Founders of LeadSquared), Ashish Sharma (MD, Innoven Capital), Abhishek Goyal (Founder of Tracxn), Himanshu Sharma (Founder, Aspiring Minds), Kunal Sinha (Founder, GlowRoad), Vignesh Ramanujam (Partner at Spoonfeed), and angel investor Tirumalareddy Karri.

Speaking about its future plans, Vishwajit says, “We are looking forward to scaling up and working with stakeholders across the fintech ecosystem to introduce extensive features to help bring the fintech revolution to the fingertips of the next generation.”

Edited by Saheli Sen Gupta

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Cyber Monday shopping expected to set record but annual growth has slowed | Adobe

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Cyber Monday shopping sales hit at least $6.3 billion through part of the day in the U.S. today, according to the latest online shopping data from Adobe Analytics.

It’s not unusual for Cyber Monday and Black Friday online shopping results to break records, but it this economic climate it’s encouraging to see it happen. Still, growth has slowed from 2021 and 2020 holiday seasons.

Consumers spent $6.3 billion up through 3:00 pm Pacific time for Cyber Monday. Adobe expects that when the final tally is in, consumers will spend between $11.2 billion and $11.6 billion for the day, making Cyber Monday the biggest online shopping day of the year (and of all time).

Today, the top 15 hot sellers (not in ranked order) have included Legos, Hatchimals, Disney Encanto, Pokémon cards, Bluey, Dyson products, strollers, Apple Watches, drones, and digital cameras. Gaming consoles also remain popular, along with games including Mario Party, FIFA 23, Madden 23 and Call of Duty: Modern Warfare II.

Over the past weekend, the top sellers were included Hot Wheels, Cocomelon, Bluey, Disney Encanto, L.O.L. Surprise dolls, Roblox, and Fortnite in the toys category. Nintendo Switch, Xbox Series X and PlayStation 5 remain the top selling gaming consoles, with popular games including FIFA 23, God of War Ragnarök, Call of Duty: Modern Warfare II, Madden 23, and NBA 2k23. Other hot sellers included Apple iPads, Apple MacBooks, digital cameras, Roku devices, drones, gift cards and Instapots.

Black Friday online shopping sales were $9.12 billion, up 2.3% from a year ago, and Thanksgiving itself came in at $5.29 billion, up 2.9% from a year ago. Those were above Adobe’s projections. Last year, consumers spent $10.7 billion on Cyber Monday.

Strong consumer spend has been driven by net-new demand, and not just higher prices. The Adobe Digital Price Index, which tracks online prices across 18 product categories (complements the Bureau of Labor Statistics’ Consumer Price Index, which also includes prices for offline only products and services like gasoline and rent) shows that prices online have been nearly flat in recent months (down 0.7% YoY in October 2022).

Adobe Analytics says Cyber Monday will set a record.

Adobe’s numbers are not adjusted for inflation, but if online inflation were factored in, there would still be growth in underlying consumer demand, the company said.

On a category basis, toys were a major growth driver in the days leading up to Cyber Monday, with online sales up 452% over the average day in October 2022. Appliances (up 305%) and baby/toddler products (up 289%) also saw strong demand, in addition to electronics (up 276%) and apparel (up 258%).

Shoppers will find record discounts today for computers (peaking at 27% off listed price). Deals will also be found in nearly all categories tracked, including apparel (19%), toys (33%), electronics (25%), sporting goods (16%), televisions (15%), and furniture (11%). Those looking to buy an appliance should consider waiting until Thursday (December 1), when discounts are set to peak at 18% on average.

Weekend spending remained strong

Consumers spent over a Black Friday’s worth of ecommerce over the weekend at $9.55 billion, up 4.4% YoY ($4.59 billion on November 26, up 2.6% YoY / $4.96 billion on November, up 6.1% YoY). Season-to-date (November 1 to November 27), consumers have spent a total of $96.42 billion online, up 2.1% YoY.

And while the big days (Thanksgiving Day, Black Friday) have reached new heights, consumers spent at record levels all season. Since November 1, shoppers spent over $2 billion every single day, with 19 days above $3 billion in online spend. Broad, early discounts were the main drivers for the shift in consumer spending.

“Shoppers have seen massive discounts this past week, which is the exact opposite situation from last season when supply chain constraints kept prices elevated,” said Vivek Pandya, lead analyst at Adobe Digital Insights, in a statement. “While discounting will have an impact on margins for retailers, it is also driving a level of demand that can help brands build long-term loyalty and net some short-term gains.”

Additional Adobe Analytics Insights

Over the weekend, online sales of toys were up 383% (compared to average daily sales for the category in October 2022), with baby toys seeing strong demand (up 252%). Other categories that surged over the weekend include jewelry (up 230%), sporting goods (up 239%), and apparel (up 217%).

With online spending hitting new records and inflation impacting consumers, flexible payments have become a big story this season. In the last week (November 21 to November 27), “buy now, pay later” orders have risen 68% and revenue has increased 72%, when compared to the week prior.

Over the weekend, smartphones drove over half of online sales for the first time (52%, up from 48% last year). Adobe expects mobile shopping to dip on Cyber Monday however, based on historical trends. Many people are back at work and using laptops, which will be the preferred device for shopping online.

Forecast for Cyber Week

Adobe expects Cyber Week (the five days from Thanksgiving Day through Cyber Monday) to generate $34.8 billion in online spend, up 2.8% YoY, and represent 16.3% share of the full November through December holiday season.

Cyber Monday is expected to remain the season’s and year’s biggest online shopping day, bringing in between $11.2 billion and $11.6 billion. Black Friday generated a record $9.12 billion in online spend, up 2.3% YoY, while Thanksgiving brought $5.29 billion in online spend, up 2.9% YoY.

Adobe analyzes direct consumer transactions online. The analysis covers over one trillion visits to U.S. retail sites, 100 million SKUs, and 18 product categories.

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Snowflake 101: 5 ways to build a secure data cloud 

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Today, Snowflake is the favorite for all things data. The company started as a simple data warehouse platform a decade ago but has since evolved into an all-encompassing data cloud supporting a wide range of workloads, including that of a data lake

More than 6,000 enterprises currently trust Snowflake to handle their data workloads and produce insights and applications for business growth. They jointly have more than 250 petabytes of data on the data cloud, with more than 515 million data workloads running each day.

Now, when the scale is this big, cybersecurity concerns are bound to come across. Snowflake recognizes this and offers scalable security and access control features that ensure the highest levels of security for not only accounts and users but also the data they store. However, organizations can miss out on certain basics, leaving data clouds partially secure. 

Here are some quick tips to fill these gaps and build a secure enterprise data cloud.

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1. Make your connection secure

First of all, all organizations using Snowflake, regardless of size, should focus on using secured networks and SSL/TLS protocols to prevent network-level threats. According to Matt Vogt, VP for global solution architecture at Immuta, a good way to start would be connecting to Snowflake over a private IP address using cloud service providers’ private connectivity such as AWS PrivateLink or Azure Private Link. This will create private VPC endpoints that allow direct, secure connectivity between your AWS/Azure VPCs and the Snowflake VPC without traversing the public Internet. In addition to this, network access controls, such as IP filtering, can also be used for third-party integrations, further strengthening security.

2. Protect source data

While Snowflake offers multiple layers of protection – like time travel and fail-safe – for data that has already been ingested, these tools cannot help if the source data itself is missing, corrupted or compromised (like malicious encrypted for ransom) in any way. This kind of issue, as Clumio’s VP of product Chadd Kenney suggests, can only be addressed by adopting measures to protect the data when it is resident in an object storage repository such as Amazon S3 – before ingest. Further, to protect against logical deletes, it is advisable to maintain continuous, immutable, and preferably air-gapped backups that are instantly recoverable into Snowpipe.

3. Consider SCIM with multi-factor authentication

Enterprises should use SCIM (system for cross-domain identity management) to help facilitate automated provisioning and management of user identities and groups (i.e. roles used for authorizing access to objects like tables, views, and functions) in Snowflake. This makes user data more secure and simplifies the user experience by reducing the role of local system accounts. Plus, by using SCIM where possible, enterprises will also get the option to configure SCIM providers to synchronize users and roles with active directory users and groups.

On top of this, enterprises also should use multi-factor authentication to set up an additional layer of security. Depending on the interface used, such as client applications using drivers, Snowflake UI, or Snowpipe, the platform can support multiple authentication methods, including username/password, OAuth, keypair, external browser, federated authentication using SAML and Okta native authentication. If there’s support for multiple methods, the company recommends giving top preference to OAuth (either snowflake OAuth or external OAuth) followed by external browser authentication and Okta native authentication and key pair authentication.

4. Column-level access control

Organizations should use Snowflake’s dynamic data masking and external tokenization capabilities to restrict certain users’ access to sensitive information in certain columns. For instance, dynamic data masking, which can dynamically obfuscate column data based on who’s querying it, can be used to restrict the visibility of columns based on the user’s country, like a U.S. employee can only view the U.S. order data, while French employees can only view order data from France.

Both features are pretty effective, but they use masking policies to work. To make the most of it, organizations should first determine whether they want to centralize masking policy management or decentralize it to individual database-owning teams, depending on their needs. Plus, they would also have to use invoker_role() in policy conditions to enable unauthorized users to view aggregate data on protected columns while keeping individual data hidden.

5. Implement a unified audit model

Finally, organizations should not forget to implement a unified audit model to ensure transparency of the policies being implemented. This will help them actively monitor policy changes, like who created what policy that granted user X or group Y access to certain data, and is as critical as monitoring query and data access patterns. 

To view account usage patterns, use system-defined, read-only shared database named SNOWFLAKE. It has a schema named ACCOUNT_USAGE containing views that provide access to one year of audit logs.

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WhatsApp rolls out new ‘Message Yourself’ feature globally • TechCrunch

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To get a roundup of TechCrunch’s biggest and most important stories delivered to your inbox every day at 3 p.m. PDT, subscribe here.

We’re joining the Cyber Monday fun with 25% off annual subscriptions to TechCrunch+ content and analysis starting today until Wednesday, November 30. Plus, today only, get 50% off tickets to discover the vast unknown and attend TechCrunch Sessions: Space in Los Angeles!

Okay, we haven’t done a newsletter since Wednesday, and while the U.S. team was chillin’ like villains, the rest of the team was hard at work, so here’s some of the highlights from the last half-week of TechCrunchy goodness! — Christine and Haje

The TechCrunch Top 3

  • Talking to yourself just went digital: Instead of having that internal monologue stay in your head, now you can play out all of your thoughts to yourself in WhatsApp, Jagmeet writes. The messaging platform began rolling out an easier way to talk to yourself today after completing beta testing.
  • Great Wall of porn: That’s how Rita and Catherine describe the bot surge in China that is making it difficult to get any legitimate Twitter search results when trying to find out something about Chinese cities. Why, you ask? Rita writes that “the surge in such bot content coincides with an unprecedented wave of (COVID) protests that have swept across major Chinese cities and universities over the weekend.”
  • Your calendar, only more productive: Get ready for your calendar to be more than just a place to record things you have to do that day. Romain writes about Amie, a startup that grabbed $7 million to link your unscheduled to-do list with your calendar. The app also enables users to be social with coworkers.

Startups and VC

Dubai-based mass transit and shared mobility services provider SWVL has carried out its second round of layoffs, affecting 50% of its remaining headcount, Tage reports. The news is coming six months after SWVL laid off 32% (over 400 employees) of its workforce in a “portfolio optimization program” effort geared toward achieving positive cash flow next year.

There’s a couple of new funds in town, too! Harri reports that Early Light Ventures plots a second, $15 million fund for software ‘underdogs,’ while Mike writes that BackingMinds raises a new €50 million fund to fund normally overlooked entrepreneurs. He also writes about Pact, an all-women led VC for mission-driven startups, backed by Anne Hathaway.

And we have five more for you:

Lessons for raising $10M without giving up a board seat

Blackboard showing soccer strategy

Image Credits: Ihor Reshetniak (opens in a new window) / Getty Images

Over the last two years, intelligent calendar platform Reclaim.ai raised $10 million “using a more incremental approach,” writes co-founder Henry Shapiro.

“We’ve done all this without giving up a single board seat, and Reclaim employees continue to own over two-thirds of the company’s equity,” rejecting conventional wisdom that founders should “raise as much as you can as fast as you can.”

In a TC+ post, Shapiro reviews the process they used to identify follow-on investors, shares the email template used to pitch the SAFE, and explains why “a larger cap table means more founder control.”

Three more from the TC+ team:

TechCrunch+ is our membership program that helps founders and startup teams get ahead of the pack. You can sign up here. Use code “DC” for a 15% discount on an annual subscription!

Big Tech Inc.

Amazon’s recent cost-cutting measures seem to be affecting more than just its delivery business. Manish writes that the company is shutting down its wholesale distribution business, called Amazon Distribution, in India. Amazon had started this unit to help neighborhood stores secure inventory. The company didn’t say why it was closing this particular business down, but Manish notes that this is the third such Amazon unit to be shuttered in India.

Meanwhile, Natasha L reports that Meta has gotten itself into trouble again with the European Union’s General Data Protection Regulation (aka, the agency that regulates data protection). Facebook’s parent company is being hit with $275 million in penalties for what the agency said was breaches in data protection that resulted in some 530 million users’ personal information being leaked.

Now enjoy six more:



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