Web 3.0 - The New Catch Word

13 May 2022

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Dear Reader, 

The latest buzzword in the techie world has been that of NFT, Metaverse and of course, Web 3.0. So, what is Web 3.0? Is it the new internet revolution or is it a door to the decentralized future? For this, first let’s understand what Web 1.0 and 2.0 has been.

Web 1.0 (1994-2004) - Read - only, was the first version of internet where there was no contribution but only access with the computer’s static HTML pages.

Web 2.0 (2004 – present) - Read – write, ushered in the era of tech giants such as Twitter, Instagram, Facebook, YouTube and many more where Internet became a twoway conversation with capabilities to share user generated content and engage in user-to-user interactions to contribute by generating own content. Web 3.0 has also become advertisement driven with digital marketing getting an upper hand in persona based application interactions.

Web 3.0 – Read- Write, was coined by Garwin Wood, the co-founder of Ethereum in 2014. With the rise in tech giants taking control of the internet, it was felt that a more trustworthy internet system was needed to protect the user’s interest. At its core, Web3 uses blockchains, cryptocurrencies, and NFTs to give power back to the users in the form of ownership.

Web3 would be working on few core principles for its creation:

  • Decentralization: As opposed to controlling and owning vast swaths of the internet, ownership is distributed among its builders and users.
  • No permissions: everyone has equal access to participate in Web3, and no one gets excluded
  • Cryptocurrency: it uses cryptocurrency for spending and sending money online
  • No trusting of 3rd parties: it operates using incentives and economic mechanisms instead of relying on trusted third-parties.

With Regards,

Akhil Handa
Chief Digital Officer
Bank of Baroda


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The humongous potential of Martech

Marketing technology (also known as martech) is a stack of software solutions used by marketing leaders to support mission-critical business objectives and drive innovation within their organizations. Martech solutions focus on content and customer experience, advertising, direct marketing, marketing management and data analytics.

Invisible Banking - Banking that you don't have to think about

Buy Now, Pay Later (BNPL) is a type of short-term financing that lets you pay in instalments by the end of the specified time period. There are quite a few online merchants and fintech companies in India offering BNPL as a convenient payment option and an excellent alternative to credit cards which includes ZestMoney, LazyPay, Simpl, Amazon Pay Later, Ola Money Postpaid, Paytm Postpaid, Flexmoney, EPayLater, Capital Float, etc. By offering no-cost EMIs and being accessible, and transparent, BNPL is all set to revolutionize the lending landscape, especially for young adults.

A new report released by financial technology company FIS says BNPL is India’s fastest-growing online payment method. By 2025, BNPL is expected to contribute 8.6% of e-commerce market value, up from just 3% in 2021.BNPL loans may be dispensed on pre-paid instruments, wallets or bank accounts, powering commerce across a large number of merchants who would have been acquired and enabled by banks and networks. The cost of actual delivery of credit cards into rural towns will be around Rs. 250-300, and also credit activation rate is 20% now, but in the case of BNPL, the cost is negligible.

Taking BNPL beyond the online channel could play an important role in its growth trajectory and opportunities for credit access which are particularly low for young people and new-to-credit customers, who struggle due to a lack of credit histories and track records for lenders to assess and manage risk. The physical card form factor allows customers to use the digital credit line across touch points.

Regulation is also driving collaborations between fintechs, traditional banks and NBFCs. The report of the RBI working group on digital lending, released in November 2021, recommended that BNPL financing should be treated as balance sheet lending. “Since these products do not meet the requirements of traditional credit facilities, a suitable notification may be issued by the Government of India in this regard,” the report said. As a result, new-age lenders are choosing to work with their tightly-regulated counterparts to grow the market.

Banks, NBFCs and card networks play a vital role in enabling fintechs to deliver BNPL solutions. A large number of fintechs have the ability to underwrite credit using AI/ML (artificial intelligence/machine learning) models. However, these loans may be based on capital from NBFC, banks or their own capital in some cases. With UPI credit, Buy Now Pay Later (BNPL), and branchless banking, the roadmap towards inclusion will be significantly accelerated.

With Regards,

Akhil Handa
Chief Digital Officer
Bank of Baroda

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