Fintechs of the future will continue to assist and challenge financial institutions to lend faster, and better. Focussed on wealthtech, BaaS, and cross-border payments, they have moved well beyond payment gateways and wallets
Illustration by Chaitanya Surpur
India’s fintechs, whose foundation for growth started with initiating payments and net banking, are continuing to challenge traditional lenders such as banks, with innovations and consumer-facing solutions. China does not have a Stripe or a Razorpay because it was a wallet-driven economy. So is a lot of Southeast Asia.
Fintechs in India started as payment processors and payment gateways and the natural evolution was the credit space—direct to consumer or SME lending.
The Unified Payments Interface (UPI) continues to be a game changer for India. Payments, be it consumer or B2B-focussed, is the foundation, and many more products and solutions are built on top. “India’s payment ecosystem is really far ahead of almost every country you can think of in payments. We currently have more than 300 million users of UPI irrespective of income class, location and mobile software they use,” says Anuvrat Jain, vice president at venture capital firm Lightspeed, who works in the growth investment team.
While market share, topline growth and consumer visibility was what entrepreneurs swore by, profitability is the mantra they cannot ignore now. FY23 data shows that only 10 out of 24 fintech unicorns were profitable. The list of loss-making heavyweights includes Slice, Yubi, Acko, PhonePe and Groww.