Chinese FinTechs Desperate for Slice of Indian Consumer Finance

In the midst of a deep down consumer financing crisis by Indian Fintech Startups, guess who is at the Gateway of India, Mumbai asking for NBFC license to operate in the Indian FinTech space. Yes! More than 2 dozen Chinese Dragons are waiting at the RBI gate in Mumbai.

What’s so special about Chinese Fintech Companies ?
Flush with funds, they target customers in the sub-prime segment [No CIBIL Score or a Score of just 500-550] and offer small-ticket loans (mainly pay cheque loans) which are short term in nature and profitable. There has been a regulatory clampdown in China last year which

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Indians embrace Digital Payments – JAM Pays Off

The Government of India’s push for digital transactions which started from 2016 using JAM trinity (JanDhan, Aadhar and Mobile) is helping in changing the consumer preference structurally. This structural shift in the consumer preference will also help the credit card industry going forward.

Credit Card outstanding in India is just ~6% of debit card spends and this has not improved meaningfully in recent times. If we look at the composition of digital transaction over

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Micro Payments and Small Merchants – Next Big Story

The Payment ecosystem in India comprised of (1) RTGS for high value payments – Corporate and Government, (2) NEFT/NACH for low value payments, that mainly supported Salary and SME Business. In recent years, the micro-value payments segment has seen the introduction of a number of products like digital wallets, UPI etc. This has driven the lower end of the pyramid to the payments ecosystem, fulfilling the
government’s financial inclusion objective.

Growth of UPI – The value of transactions through UPI surpassed that of cards last year at ~Rs120 tn. This was in part driven by incentivization in the form of cashbacks etc. and hence is expected to moderate slightly from these levels as

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What are the Key Digital Payment Trends in India ?

In the Indian payment eco-system, consumer behavior is being shaped by government policies and regulatory changes, tech changes and changing business models, all of which are reshaping the competitive landscape. JAM – Jan Dhan, Aadhar, Mobile. For the first time a financial inclusion program is talking about credit and insurance compulsorily. Saving Account is merely a way to reach the customer. This is also a sign of convergence.

P2P payment draft guidelines show the regulator’s willingness to reduce uncertainty. Both government and regulator have realized that driving competition is the key to achieve mass inclusion and less cash. Limited number of players cannot deliver on such a huge untapped opportunity across the BFSI segment.

Changing business model and competitive landscape

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Transerv – Multi-Mode Digital Payment Platform

In the aftermath of the Demonetisation in India, the payment platform is undergoing a lot of changes. The challenge is that payment business is not a delight from a customer’s perspective. Payment is no longer about isolated products but an integrated experience as offered by Mumbai based Transerv.

Different consumer groups could pick and choose products of their choice available over multiple channels. For example

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Evolution of Cashless Society in India

As experience suggests, it is quite possible to live without cash. However, it is restricted currently to urban markets while in rural India, there has not been much progress to make the transition easier. One of the biggest learning experiments is the discounting methodology adopted by various companies as a tool to change payment behavior of individuals. Studies have shown that this can be successful if implemented across long periods of time.

Digital is showing positive impact on deposits through better payment platforms as well as lending. For example, aggregator models operating in India (Uber, Ola, Urban Clap etc.) have led to the emergence of a new credit class of 4.5-5.0 mn people. This is because banks now have information records of incomes of these people, and can better assess their credit worthiness. Mechanisms which have established key use cases have succeeded. Paytm , for instance,

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