-Ashutosh Dubey, Lead Business Analytics NPCI
From last decade, India is increasingly considered as a leading global innovation hub in the financial technology space. There is a great interest shown from governments, investors and global enterprises to not only invest in this sector but also mingle with ecosystem for collaboration and creation of Fintech enabled India.
Many times while trying to make payments using a credit or debit card, one finds that the payment has failed. This could be due to any reason, one of which is lack of internet connectivity. Unable to establish connection with the payments platform could also be a reason. However, soon, users could be making offline payments using cards and mobile devices.
The RBI has proposed to allow a pilot scheme for small value payments in offline mode with built-in features for safeguarding the interest of users, liability protection, etc. Under the pilot scheme, authorised Payment System Operators (PSOs) – banks and non-banks – will be able to provide offline payment solutions using cards, wallets or mobile devices for remote or proximity payments.
India’s evolution as a progressive FinTech nation is not a miracle and during the COVID times the investment done by Government, Regulators and Industry reap its benefits and lead to the emergence of next level Fintech environment in India.
In a recent report, by Research and Markets, as of March 2020, India, alongside China, accounted for the highest fintech adoption rate (87 percent), out of all the emerging markets in the world. So why Fintech are speculated as driver of next level Digital growth of India?
The answer to the question lies in 5 major trends which will not only support the ecosystem but also drive it to next wave of adoption:
Almost 80% of financial institutions have entered into fintech partnerships (A McKinsey report). While collaborations between banks and fintech companies at different levels; public and private will be on the rise, other mutual synergies will also play out in favour of the industry with fintech start-ups as well as incubators or support systems making the fintech journey in India extremely sustainable. A recent PwC research shows that 44% of those who earn less than $75,000 per year would trust a technology company for peer-to-peer payments, and this rises to 68% among earners making more than $100,000.11. This number shows the growing trust of customers on online platforms.
Recently Multiple FinTechs are driving the agenda of Financial Inclusion by the means of Credit lending to last mile. For instance, a personal loan needs to be a three-year loan and if you prepay you still have to pay a charge. That has not changed. Therefore, apart from digitising there is a big opportunity for FinTechs to completely re-imagine the product suites that are being offered. Continuing on the same, standard interest rate norm today on credit cards is 36%, the annual percentage rate (APR) nobody has changed despite becoming digital and if someone is coming along and creating products and services which fundamentally redefines the credit card business, there is a very big opportunity which comes up for Fintechs to lead in this marketplace and drive opportunities which are sustainable and cheaper.
NPCI is also driving several initiatives like API Accelerator platform, Hackathons along with knowledge sessions to make the ecosystem equipped with requirements of last mile and products which will cater those needs of future India.
Source:
https://gomedici.com/research-categories/global-fintech-exits-report
https://inc42.com/resources/a-vision-for-fintech-in-2020-the-future-looks-bright-for-bfsi-sector/