Fintech has potential to transform India’s financial landscape

Pankaj Chowdhary, Minister of State for Finance expressed confidence in industry estimates of the Fintech market to reach $150 billion by 2025, as he inaugurated Assocham’s International Fintech Festival here on Wednesday. This is five times the industry’s current market size of about $31 billion according to the latest estimates.

Choudhary stressed the need to bridge the digital divide and promote broad-based customer participation. “With adoption rate at 87 per cent against the global average of 64 per cent, Fintech has the potential to fundamentally transform the financial landscape, provide consumers with a greater variety of financial products at competitive prices and improve efficiency,” he said.

The minister added that Fintech and digital players could function as the fourth segment of the Indian financial system, alongside large and mid-sized banks including niche banks, small finance banks, regional rural banks, and cooperative banks.

Top officials of major Fintech companies discussed the industry’s future needs on the first day of the three-day-long Fintech Festival organised by the Associated Chamber of Commerce and Industries of India (Assocham).

Industry optimistic about credit-card payments.

The industry leaders are aiming to expand by setting up new credit lines, as the RBI on Wednesday allowed linking RuPay credit cards with UPI. Ambarish Kenghe, VP – Product, Google Pay said “solving for credit meaningfully should be the pillar for the next round of growth and digital payments are just the tip of the iceberg and there is much more to Fintech.”

“As of 2021, credit card penetration remains less than five percent in India, while it is one of the biggest retail forms of credit for consumers in India. That figure in the US is 300 percent because people have multiple credit cards.” Kenghe highlighted the scope for expansion through credit card penetration. “Crucially this can also become a key revenue driver for banks and fintech players, which will allow them to fuel more innovation,” he said.

The speakers also pointed out that more than 70 percent of Indians are still not using digital payments and there is a need to convert more cash transactions into digital payments. Dharmender Jhamb, vice president of Paytm said the company was planning to start a buy now, pay later payment system to increase the number of digital transactions in tier-3 and below cities across India.

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