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Quality FinTech Is Yet To Be Felt In India

A payee has to be first registered with the bank before fund transfer, and that is a time-consuming process and speed being a key element in higher GDP growth rate, we have to do away with hurdles like these.

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Science and technology have come a long way together with religion. India is a country with diverse and pious religious sentiments, form a strongly conservative rhetoric. In a scenario like this, for people to adopt to technologies and get used to them takes shunning a lot of old beliefs if it’s tied to clutter. However, with FinTech based services attached to the internet, people have now largely taken to internet for their daily needs of banking and e-commerce. People now await app-based options on their phones. Laggards seem to have converted heavily with the advent of 3G/4G telephony and broadband penetration, and of course, the millennials. Still a short way to go before we become far superior in this aspect but that depends on our literacy rate and income per capita. It also depends on our telecom and banking penetration.

Credit cards came around in 1950 with Diner Club Inc. being the first credit card ever. American Express followed in 1958. This was the beginning of the interface of FinTech or “financial technology” for the consumer segment. As time passed, more credit cards came about with signatures replaced by pin codes, and swipes replaced by plug and pay. There came debit cards and ATMs and so on. Today we have contactless payments and it’ll get better and easier. Innovators are thinking day and night to come up with something.

In modern day and age, FinTech means something more than credit cards. We are at one of the highest points reached in constructive use of technology for business and living ease. After this, it’s about speed and variation. However, our broadband penetration still stands at 47% wherein our European counterparts have reached over a 100%. They have excessive supply, which in turn effects prices. Our country is absent in processing credit card payments over the phone, but that too shall become available at some point. This is important to make available the option of payments through a credit card for non-internet users which still for a majority of our population.

We have a great system of one-time password (OTP) connected to the registered mobile number, a model which is now being replicated by other countries. That can be put to use extensively to do away with complex addresses for verification and absence of phone payments with just the card numbers read out. Credit card gateways should be adopted by start-ups as a must if there are daily payments to be made. This movement will gain momentum. We will see payments happening at a faster speed in the future, that is for sure. It could be seconds and maybe even faster, depending on what newer technologies bring. Dan Brown’s books could come to life, where a computer attached to our body does it all. Who knows?

In countries, there are branchless banks which run on digital payments. If a customer needs to deposit cash, there are tie-ups with other banks in place which act as depositors. This is a great way to have a cashless economy and can be the future for our country too. PayTm in India, is running on similar lines. It started as a payment gateway but now is a small finance bank. This essentially means they can start the basic function of banking of lending on customer deposits. There are many such banks in India.

In India, a payee has to be first registered with the bank before fund transfer, and that is a time-consuming process and speed being a key element in higher GDP growth rate, we have to do away with hurdles like these. If India needs to rise in ease of doing business, we have to look at small things. Registration for internet banking is also pretty cumbersome. Upon that, in many remote parts of the country, one can just lose time struggling with the internet speed or mobile data streaming. Every Indian needs to have a debit or a credit card, which we are a long way away from.

In every sphere of life, be it navigating through Uber, or ordering food through Swiggy, top tier cities and towns are getting covered with faster and superior services, but where are the smaller towns? India is a huge market for FinTech usage. Amazon and SnapDeal are examples of huge success stories which are in use in interiors as they deliver everywhere. Localized and indigenous usage is the need along with national and international players can be the right mix for once. As the spending power of Indians grows, they will spend on convenience and what better than services at their finger-tips, through an app.

Disclaimer: The views expressed in the article above are those of the authors' and do not necessarily represent or reflect the views of this publishing house. Unless otherwise noted, the author is writing in his/her personal capacity. They are not intended and should not be thought to represent official ideas, attitudes, or policies of any agency or institution.


Vaibhav Maloo

The author is Managing Director of Enso Group. He resides in Mumbai. He holds an undergraduate degree in business from Carnegie Mellon University and a postgraduate diploma in global business from Oxford University.

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