Entry of MNCs reshaping Indian fintech realm

Mumbai The fintech industry in India is witnessing an exhilarating surge, backed by significant investment and technological advancements. According to a recent Bain report, India’s fintech investments have soared, with nearly $35 billion poured into various segments, establishing India as a formidable player in global fintech funding since 2016.

Amidst this dynamic growth, tech giants are venturing into the Indian financial realm. One such notable example is Apple, the iconic tech pioneer, which is now making waves with its much-anticipated offering, the Apple Credit Card in India. This game-changing move is sparking intrigue and conversation about its potential impact on the existing fintech landscape.

This news has already captured immense traction on LinkedIn, and industry leaders are expressing their thoughts and concerns about the future of the fintech industry.

The foray of a global tech behemoth into India’s fintech landscape holds the potential to reshape the financial landscape for both consumers and industry players. India has emerged as Apple’s fifth-largest iPhone market, after the USA, UK, Japan, and China. It currently commands a 5.1 per cent market share of India’s total smartphone market.

Its foray will play a significant role in getting their credit-worthy customers under the credit gamut. In the US, Apple also has wallets with Apple Pay, especially NFC payment solutions like Buy Now, Pay Later, etc. Interestingly, in the past, the Pay-Later market that was floundering in the US had a turnaround after Apple launched Pay-Later on the checkout page.

Talking to Bizz Buzz, Mohit Bedi, co-founder and Chief Business Officer of Kiwi, said: “For a financial ecosystem that is so mature and well-regulated in India, any global player that is eyeing India’s fintech landscape will have to adhere to the regulatory requirements. There have been very clear guardrails for co-branding, digital lending, etc.”

India’s rapidly growing economy and large population present a significant demand for credit and financial services. The Indian credit market is evolving, and there is room for multiple players to step in and cater to the diverse needs of consumers and businesses, he said.

For instance, monthly expenditure on UPI P2M (person to merchant) transactions amount to approximately Rs3.2 lakh crore, which is almost 2.5x larger than the monthly credit card spends. Kiwi, through its credit cards on UPI offering, capitalises on a significant untapped market. Moreover, the number of unique UPI users is more than 100 times the number of existing card users in India, and the acceptance points for ‘Credit on UPI’ are anticipated to be five times larger than regular credit card acceptance points. Gaurav Chopra, Founder & CEO of IndiaLends, an online marketplace for credit products, said: “India has the lowest credit penetration among its global peers. Global players entering the market will only help expand an already growing market, faster.”

The onus would be on the Indian players to leverage their deep understanding of the consumer preferences as well as risk parameters, he added.