On 22nd & 23rd of July 2020, Cybertonica India’s Market Manager had the pleasure of attending the very first edition of The Global Fintech Festival (GFF) – one of the largest virtual summits for industry players in financial services and #FinTech space.
In this blog post, we are sharing our insights gained during the 2 day fest including the latest highlights and some of the noteworthy developments in the Indian market.
Organised by the National Payments Corporation of India (NPCI), Fintech Convergence Council (FCC), and Payments Council of India (PCI), the theme of the event was ‘Fintech: With and Beyond COVID’ and it aimed to bring together the leading organisations and brightest minds to discuss the current challenges and opportunities for the fintech sector globally.
Given the current circumstances and restrictions, the digital format of the event made it possible for people to attend from all around the world.
The event brought together more than 10k attendees from over 50 countries and over 100 speakers from industries like banking, insurance, lending, and #cybersecurity were sharing their experiences, insights, and latest ideas.
Some of the most exciting themes addressed were “Navigating the Next Phase of Payments in India”, “Banking Fintech and COVID – a Banker’s View” and “What’s next in India Fintech” were the topics that caught Cybertonica’s team interest.
Talks, panels, and interactive discussions by industry giants such as the World Bank, Department of Economic Affairs Govt of India (GOI), State Bank of India, Monzo, HDFC Life, and other leading institutions attracted hundreds of thousands of viewers to watch their sessions over the two-day fest.
NPCI developed and launched the first Unified Payment Interface (UPI), one of the largest real-time payment systems in the world, back on August 25th, 2016. The aim was simple – to give a boost to mobile banking. Since then, UPI has witnessed a CAGR of 785% in volume and 570% in the value of transactions.
Now at the festival, NPCI has announced the launch of UPI 2.0 with some extended features of recurring #payments for SIPs, subscriptions, and OTT. The updated version of the interface is expected to achieve new milestones by expanding UPI’s presence in the person-to-merchant (P2M) payment space.
According to the ‘Empowering payments: Digital India on the path of revolution’ report, that the world’s transactions for digital payments are anticipated to reach a value of $12.4 trillion by 2025 with India contributing approx 2.2% of the global digital payment market by 2023.
To put this into perspective, India has seen a growth in digital payments by 383% from financial year FY18 to FY19, this is mainly due to the increase in usage of Debit Cards and UPI being one of the main accelerators.
The CEO of Amazon Pay, Mahendra Nerukar believes that UPI 2.0 ‘s credit facility will help millions of Indians purchase products they cannot afford to buy. He also discussed the fact that the largest Internet user base of India lies in the rural regions and this has been a catalyst for UPI to achieve 95% payment penetration.
Small retailers and merchants, who are the backbone of the Indian market, were hit hard by the corona crisis.
At the Fest, it was noted how important it is that BharatQR (an integrated payment system in India), UPI, and other Indian mobile wallets have made it possible for these businesses to be connected. They therefore can perform a distribution function at local level that is essential to managing the COVID restrictions.
Thanks to that, now small merchants and retailers, and even the Indian ‘Kirana’ (small neighborhood retail stores in the Indian Subcontinent stores), have access to digital payments.
The Indian biometric identity card Aadhar has been a key factor in boosting financial inclusion in the country through the Aadhaar Enabled Payments System.
The system uses Aadhaar authentication and allows transactions at micro-ATMs. 1.23 billion Indians have an Aadhaar card, which gives them easy access to their money through their bank.
WhatsApp has a gigantic reach in India – a massive user base of 400 million. The Head of WhatsApp in India, Abhijeet Bose announced that the company is now working on integrating customer experience in the banking industry with ‘WhatsApp Banking’. They believe this will help in connecting customers to the bank and helping them avail customer service 24/7 365 days a year.
This raises the question of how regulators perceive the WhatsApp payment model from the point of view of #fraud, #authentication and #AML. In addition, this may impact how other payment businesses assess their opportunity if take up of WhatsApp payment is high in such a huge user base.
Microloans, insurance, and mutual funds to the lower and middle class might be the next big thing in Indian FinTech. Speaking at the Festival, Sachin Bansal, the Co-Founder and CEO of Navi, stated that there is a lack of high-quality financial services for the common Indian person who doesn’t get a good service from banks and other financial institutions with costly operations.
A demand for simplified microfinance for the masses, who otherwise rely on informal lending mechanisms, is huge. Sachin believes that providing financial services in the form of microloans, insurance, mutual funds to the lower and middle class is the next big thing in Indian FinTech.
Attending the Global Fintech Festival has proven that every crisis brings changes that lead to opportunities and COVID-19 is no exception.
It has rapidly accelerated the process of #digitalisation on many levels globally. Yet, it has also shown that there are still many hurdles to overcome in particular in the area of customer service and data protection, along of course with fraud prevention.
These couple of months have established a new normal and given a huge opportunity for digital payments to rise further. This huge change in scale has led also to a strong rise in fraud and fraud attempts, this then creates a need for cybersecurity, risk and fraud management and transaction monitoring.
Rural consumers in emerging markets all around the world are still learning about digital finance, yet are often unaware of the risks that cyber threats pose. This all comes down to the lack of education about financial and digital services. This unawareness often results in low levels of trust and in digital financial services, trust is of huge importance.
In a market where many consumers are just becoming aware of the digital finance and online payments sphere, KYC and transactional security is the key to winning customers trust, which is essential for digital payments to become successful.
This conference showed what a huge opportunity exists in India to contribute to the growth and innovation that is coming with the scale-up of eCommerce and ePayment and neobanking.
Cybertonica is convinced after these days of insight and exposure to the trends and data that our decision to make an early commitment to this market was well-timed. Maybe even augmented by the COVID based acceleration of the sector, we will soon have our first operations. And many more ahead.
Read more about how COVID impacts the startups in India and get key insights from the entrepreneurs here.
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