The fintech industry in India is growing rapidly. They have captured a good space with advanced technologies like smart usage of Data Science, Artificial Intelligence and Machine Learning. Even large banks and financial institutions have now started to value the importance of fintech.

The rapid growth of India’s fintech space can be attributed to the success of mobile payments and digital lending. Hence, it is not very surprising that traditional banks are also keen on embracing new technologies and partnering with fintech players to improve their service standards.

Many large banks have even set up fintech subsidiaries to internalise fintech competitiveness and export technology capacity to smaller banks. Fintechs are also stepping in to help financial institutions handle the large number of loan applications by enabling digital applications, facilitating data collection or assisting with the underwriting and approval process.

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How fintechs are helping keep consumer liquidity flowing?Mobile payments

Fintech has significantly pervaded the mobile payments landscape. Many fintech players are taking advantage of the rise in the use of smartphones, improvements in digital infrastructure, and a growing interest in online shopping.

The advent of UPI has further eased the process of making payments online. The biggest advantage offered by UPI is its interoperability among multiple banking platforms. This enables customers to enjoy a fast, seamless and reliable payment experience, and pay utility bills. In addition to this, they can send money to their family and friends almost instantaneously.

Digital lending

The process of availing loans from traditional banks is not only time-consuming but also paper heavy. It sometimes takes weeks to just get approvals for the loan. The COVID crisis has further worsened the situation as most of the banks are reluctant to lend in this uncertain scenario. Against this background, digital lending NBFCs have emerged as a saviour for customers.

Fintech companies operating in the digital lending space uses new-age approaches to disburse credit. Instead of relying on traditional financial data, they are now using alternative data to make more accurate and informed credit decisions.

Alternative data for credit scoring can cover employment history, academic background, rental payments, utility bill payments, insurance payments and even social media activities.

Since there is a shortage of credit data on MSME borrowers, fintech lenders leverage alternative data to assess their creditworthiness. This method improves access to credit for MSMEs, who are often declined credit from the formal banking sector.

Not just MSMEs but alternative data also helps salaried professionals and freshers who do not have any credit score. This explains why despite being a fraction of the banking system in size, the digital lending space is growing at a rapid pace owing to the faster and hassle-free process of loan disbursal.

Another main advantage of digital lending is that it allows for digital customer onboarding and credit disbursements, thereby eliminating the need for the customer to be physically present at the lender.

The digital lending space apart from being hassle-free is also helping the new to credit customers and those who have lower income to avail short term personal loan with a few clicks. The fintech companies, through technological means, can promptly evaluate credit risks by using the database containing loan applicants’ background and approve the loan.

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Savings and ProtectionFintech firms are offering platforms to customers to enable them to save, manage their wealth, and make investments. They also help them to choose from a spectrum of financial products across categories such as insurance, savings account and mutual funds.

Some fintech companies are also providing customised financial advice on a range of financial products. Mutual funds, for example, can play a key role in addressing the credit needs of customers.

In March and April this year, around 1.2 million new investors opened demat accounts with the Central Depository Services (CDSL) despite the ongoing nationwide lockdown. This is an indication of more and more retail investors in the country taking to equities and MF route as against the more traditional forms of investments, viz., FD, gold, property, etc.

As many as 122 million Indians have lost their jobs due to the pandemic during the period between March and April, according to the Centre for Monitoring the Indian Economy. This means a large portion of the population do not have a steady income source and are suffering from a liquidity crunch. While traditional banks are not much of help in this situation, fintech NFBCs are providing a wide array of products and services to cater to their liquidity requirements.

Be it a personal loan or insurance, fintechs are using their strategic partnerships within the industry to financially empower their customers. The uptick in smartphone use and availability has also prompted many insurance providers to enable customers to complete applications and file claims from their smart phones.

(Disclaimer: The views and opinions expressed in this article are those of the author and do not necessarily reflect the views of YourStory.)

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Original Source: yourstory.com

Fintech platform MobiKwik on Tuesday said it has promoted Chandan Joshi as the co-founder and CEO (Chief Executive Officer) of the company's payments business.

Joshi has been part of the MobiKwik leadership team for the last 2.5 years as senior vice president, payments, a statement said.

"This is the first time the company has bestowed the co-founder title on anyone outside the original founding team. The company has kickstarted its IPO 2022 campaign with this major appointment," it added.

Previously, Joshi had founded Paketts, a last-mile logistics service company, and exited the business after Paketts was acquired by Nuvo Logistics (Peppertap) in 2017. Prior to being an entrepreneur, Chandan was a financial trader in global financial markets with Credit Suisse in London and Hong Kong.

MobiKwik co-founder and CEO, Bipin Preet Singh, said:

"Chandan has demonstrated all the right traits that we look for in a business leader – he leads from the front, is invested in his teams, is tenacious in driving business results and in closing large strategic deals. He has been a strong growth driver for MobiKwik and we want him to partner with us as a co-founder in the overall build-out of the company."

In its recently published financial year 2020 annual report, the company had reported net revenue growth of 133 percent year-on-year to Rs 379 crore, and cash EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) loss reduction of 91 percent y-o-y to Rs 8.5 crore.

"My journey with MobiKwik so far has been very fulfilling – I joined in the aftermath of demonetisation and my first assignment was organising the retail payments business, then to run ecommerce payments and finally to grow all of the Payments business…I am confident that together we will be able to profitably grow MobiKwik and take the company public," Joshi said.

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As CEO of the Payments business, Joshi will take on complete ownership of the company's flagship Payments Business which drives 75 percent of the revenues. While he was already driving the business (Sales, Marketing, Product, Engineering) in his existing role, all functions in the payments business unit will now report into him, the statement said.

MobiKwik has two business verticals – payments and fintech (includes credit and insurance).

Bipin Preet Singh is the CEO of the overall business.

Edited by Megha Reddy

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Original Source: yourstory.com

The National Payments Corporation of India (NPCI) on Wednesday announced the launch of a subsidiary for its international growth ambitions.

The subsidiary, NPCI International Payments Ltd (NIPL), will facilitate the body's "ambition" of venturing into newer international markets and co-create payment systems with other nations, as per an official statement.NPCI

Arif Khan, Chief Digital Officer, NPCI

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The announcement comes a day after the Reserve Bank of India (RBI) came out with guidelines for the creation of other payment platforms with a view to de-risk the system.

NIPL has been tasked with exporting NPCI's indigenously developed offerings and technological acumen to foreign markets and its focus will be the internationalisation of the RuPay and UPI (unified payment interface) platform, an official statement said.

NPCI said its platforms have been cost-effective, secure, convenient and instantaneous and several nations have displayed an inclination towards establishing a 'real-time payment system' or 'domestic card scheme'.

"Several countries such as Asia, Africa, and the Middle East have displayed interest towards replicating our model in their own nations," NPCI Managing Director and Chief Executive Officer Dilip Asbe said.

NPCI, which is owned by local lenders, has appointed Ritesh Shukla as the chief executive of NIPL, it said adding that he joins from rival Mastercard's Middle East and North Africa (MENA) team.

He will be supported by Anubhav Sharma, head of international business for partnership, business development and marketing, and Rina Penkar, head of international business for product development, in NIPL's core team, as per the statement.

Earlier in July, NPCI launched UPI AutoPay functionality for recurring payments.

With this new facility introduced under UPI 2.0, customers can now enable recurring e-mandate using any UPI application for recurring payments — like mobile bills, electricity bills, EMI payments, entertainment/OTT subscriptions, insurance, mutual funds and loan payments, paying for transit/metro payments, among others — of up to Rs 2,000.

If the amount exceeds Rs 2,000, customers have to execute every mandate with UPI PIN, NPCI said in a statement.

Any UPI-enabled application will also have a 'Mandate' section, through which customers can create, approve, modify, pause, as well as revoke auto debit mandate, it said.

(Disclaimer: Additional background information has been added to this PTI copy for context)

(Edited by Saheli Sen Gupta)

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Original Source: yourstory.com

Facebook-owned global messaging platform WhatsApp will be the newest entrant to India’s payments market now that it is in compliance with the country’s data-localisation norms. Entering the country with a beta launch in 2018, the payment feature will now be rolled out to its 400 million-strong user base once the Reserve Bank of India (RBI) gives the go-ahead.

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This comes on the heels of the National Payment Corporation of India (NPCI) certifying to the Supreme Court that WhatsApp had now “localised five data elements” that were identified by the banking regulator and mandated them to store in India.

WhatsApp has said that it has spent “significant engineering time and effort” over the last seven months to comply with the guidelines laid down by the country’s banking regulator.

According to an official statement from parent company Facebook, “An independent third-party auditor, certified by CERT-in (the government agency under the IT ministry), has confirmed that WhatsApp’s payments feature satisfies the data localisation requirements under the RBI circular and frequently asked questions (FAQs).”

According to an affidavit filed by RBI in the Supreme Court, the central bank said it was satisfied with WhatsApp’s compliance with the regulator’s data storage rules and was good to go live on the Unified Payments Interface (UPI) platform. WhatsApp Pay is already running a beta rollout with some users in India.

“More than four years ago, Prime Minister Modi launched this (UPI) ground-breaking initiative to provide Indian citizens with the ability to make digital payments to one another and to the more than 60 million Indian small businesses that serve local communities and the world,” said Will Cathcart, Head of WhatsApp, in an opinion piece in The Financial Express.

Cathcart added that UPI is a world-class payments system, that can also anchor a broader suite of fintech applications like micro-pensions, digital insurance products, and flexible loans which WhatsApp can facilitate. “These powerful tools can build on the extraordinary success India has made in lifting millions of people out of poverty and build resilience to future economic shocks,” he said.

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Partnering for progress

As part of its efforts to further integrate with the Indian fintech space, WhatsApp has also become the platform of choice for both SMBs and large businesses to talk to their customers and grow through the pandemic. Payments is that last step in that journey.

“The launch of payments can truly accelerate financial inclusion by giving access to the users that need it the most. For your average rural women entrepreneur, the internet is synonymous with WhatsApp, making it seamless to use digital payments once made available on this simple platform,” said Abhijit Bose, WhatsApp’s India Head at the virtual Global Fintech Fest on July 22.

He added that WhatsApp would also work with partners such as banks and other financial institutions to give people, especially those in rural areas and from low-income groups, easier access to financial instruments like insurance, microcredit and pension. This will also accelerate the use of digitised payments by small and medium businesses.

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“We will take risks, but we’ll do it with controlled pilots. And, based on user acceptance, we will invest and scale the solutions that deliver results," he said.

Bose also said that WhatsApp had been working closely with banks — including ICICI, Kotak Mahindra and HDFC — over the past year to explore ways to increase financial access to these individuals who were yet to enter the mainstream banking market.

In his opinion piece, Cathcart had stated that rapidly scaling UPI is the need of the hour and one of the best ways to strengthen India’s digital economy. “Today people can send money to their ageing parents isolated during this time of physical distancing. Migrant workers can support their families. Farmers can make sales outside of the market.”

He said that WhatsApp shares PM Modi's belief that “there has never been a better time to invest in India. With courage, ambition, and boundless potential, India can emerge from this pandemic stronger than ever before—a leading democratic digital powerhouse that will lead the world through the 21st century.”

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Original Source: yourstory.com

National Payment Corporation of India (NPCI) on Wednesday launched UPI AutoPay functionality for recurring payments.

With this new facility introduced under UPI 2.0, customers can now enable recurring e-mandate using any UPI application for recurring payments — like mobile bills, electricity bills, EMI payments, entertainment/OTT subscriptions, insurance, mutual funds and loan payments, paying for transit/metro payments, among others — of up to Rs 2,000.NPCI

Arif Khan, Chief Digital Officer, NPCI

Also ReadConcerns over transactions on third party apps like GPay can be redressed: NPCI

If the amount exceeds Rs 2,000, customers have to execute every mandate with UPI PIN, NPCI said in a statement.

Any UPI-enabled application will also have a 'Mandate' section, through which customers can create, approve, modify, pause, as well as revoke auto debit mandate, it said.

The section will allow customers to view their past mandates for their reference and records. UPI users can create e-mandate through UPI ID, QR scan or Intent, it said.

The pattern for auto debit mandate has been created keeping in mind customers' spends on recurring payments. The mandates can be set for one-time, daily, weekly, fortnightly, monthly, bi-monthly, quarterly, half-yearly or yearly, it added.

"Both, individual users and merchants can benefit from this feature tremendously, as mandates are generated instantly and payments get deducted automatically on the authorised date. The customers have to authenticate their account through UPI PIN for one-time and subsequent monthly payments would be debited automatically," NPCI said.

Some of the banks, merchants and aggregators who have already gone live with UPI AutoPay are Axis Bank, Bank of Baroda, HDFC Bank, HSBC Bank, ICICI Bank, IDFC Bank, IndusInd Bank, Paytm Payments Bank, AutoPe-Delhi Metro, AutoPe-Dish TV, Policy Bazaar, The Hindu, Times Prime, Paytm, PayU, and RazorPay, among others.

Jio Payments Bank, State Bank of India and YES Bank will soon go live with UPI AutoPay, it said.

"We believe this unique facility would enable customers streamline their recurring bill payments and help them get rid of paying those bills manually," SBI Chairman Rajnish Kumar said.

With the RBI continuously encouraging customers to adopt digital payments, offerings like the launch of UPI AutoPay would further attract customers to on-board UPI and witness a new arena of digital payments.

The UPI 2.0 offers features such as overdraft facility, one-time mandate, invoice in the inbox and signed intent and QR and foreign inward remittance among others to the customers.

(Edited by Kanishk Singh)

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Original Source: yourstory.com

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