How will fintech evolve as more aspects of our daily economy transition online? At FTX2020 by Razorpay, India’s most coveted fintech event, experts weigh in on the possibilities.
Back in 2019, rarely did anybody think about the possibility of being stuck inside their homes while adjusting to a virtual world. Yet, a year and pandemic later, this is our reality. COVID-19 has opened a window into a new world — one where interactions and payments mostly happen online, and banking and financial services can be accessed at the click of a button or a tap of a smartphone screen.
This is the realm of fintech, no longer a mere possibility but an essential requirement in the next phase of economic development. What would fintech look like in this new era driven by digitisation? What are the attitudes and enablers essential for success? Would fintech thrive in the current pace of technological upheavals? And how to transform its myriad possibilities into a reality? Questions like these and thought-provoking responses formed the core of the third edition of India’s most coveted fintech event — FTX2020 by Razorpay held online on December 18 and 19.
New Product Launches to Enhance Payments and Banking Experience Setting the tone of possibilities in two days of thrilling interaction with about 55+ thought leaders, Razorpay’s Harshil Mathur and Shashank Kumar unveiled plans for the newly crowned fintech Unicorn to achieve $50 billion TPV (Total Payment Volume) by 2021. After more than 300% growth in the past year — a reflection of India’s fintech potential — Razorpay announced doubling down efforts into fast-growing Tier-3 and Tier-4 cities by launching payment checkout in seven vernacular languages for localised payment experiences.
Recognising the need for digital authenticity for small businesses, Mathur and Kumar also highlighted Razorpay’s Trusted Badge, a first-of-its-kind launched by a fintech company. The Trusted Badge will help build credibility for small businesses and provide a payment experience for customers. Furthermore, with an intent to bolster not just the payment experience but the Business Banking experience for Small Businesses, the company’s neo-banking arm, RazorpayX, launched Vendor Payouts empowering businesses to process bulk payouts, disbursals, refunds instantly via UPI, IMPS, RTGS and NEFT at any time of the day and not restrained by fixed banking hours. RazorpayX also launched Group Insurance, in partnership with Plum and ICICI Lombard, covering teams as small as two employees! Recognising that this is just the beginning of India’s fintech surge, Razorpay also launched the country’s first B2B app store for the industry.
Investing in India’s future: Experts weigh in Razorpay’s vision is not an isolated one; rather it reflects the possibilities of a fintech-driven ecosystem built on a digital, cashless, and decentralised economy. Echoing that thought, Meyer Malka of Ribbit Capital highlighted the surge in ecommerce, convenience of cashless payments, and the need for online acceptance for merchants to thrive. Fintech, he said, is better positioned to adjust to this new digital reality than traditional banking and financial services institutions. To buttress his point, Malka cited the rising spread of decentralised finance (through blockchain) and that nearly 95 per cent of a consumer’s retail banking requirements can be handled through a phone.
With these trends being witnessed across the globe what’s the future of fintech in India? A panel discussion on the subject brought forth interesting points.
- While 5G is likely to accelerate fintech adoption, will the use of data analytics, AI, cloud, and super apps (like YONO, iMobile) aid this trend? - Where fintech comes in most handy is supporting local needs which traditional players may ignore — Razorpay’s venture in vernacular languages is a good example.
- Can banks and fintechs collaborate than compete? Yes, they can — while banks will bring trust, fintech will ensure agility.
Overall, fintech will likely be an INR 40 trillion opportunity in India in the next decade. Having said that, there are few challenges that the panelists highlighted. These include awareness and education on digital platforms and infrastructure bottlenecks, including affordability of handheld devices that are essential for a good fintech experience.
Now for any successful online venture, consumer subscription is important, as the next panel pointed out. Praveen Gopal Krishnan from The Ken, a pan-Asian digital publication, said that without subscriptions, an advertising business cannot succeed in news media. So how do companies go about building such a model? The key, panelists agreed, is trust. As Ankit Mehrotra from Dineout suggested, if a subscriber is promised that she will recover the cost on her first meal, then the mere visibility of such savings creates gratification and helps build trust. It is also about creating more delight, convenience, and experience for customers, as Pradyot Ghate, Vice President, Product and Partnerships, Zomato said, giving the example of Zomato Pro. Trust is also built through pricing, Krishnan said, hinting at why they never give discounts and yet have annual subscriptions that are 99.5% of total.
What is required for further growth? Among the many suggestions, notable ones were speed of implementation, improvements in payments infrastructure, and clarity in pricing constructs for charge-at-will models.
Another fascinating discussion at FTX2020 was a panel on Neobanking. David Vélez from Nubank pointed out that the reasons for fintech’s success are the seamless, hassle-free banking experience which traditional banking doesn’t allow, as well as the availability of high internet and smart phone penetration.
In closing, KV Subramaniam, Chief Economic Advisor to the Government of India, in an interesting fireside discussion on rebuilding India with fintech, highlighted how fintech can fill the gap left by traditional banks, aiding sustainable growth and job creation. To achieve this, the key would be digital literacy and financial inclusion.
Perhaps that is the magic potion that India needs as it rebounds from the pandemic and charts the course for the next decade of economic development. How that story evolves may become clearer in the next edition of FTX.
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