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Fireside Chat: COVID-19's Implications for the FinTechs
Committed to the pursuit of delivering cutting-edge deliberations with widely attended webinars, Exhibitions India Group and FinTech India expo hosted industry veterans, as Mr. Abhishant Pant, Founder- The Fintech Meetup joined Mr. Navin Surya, Chairman- Fintech Convergence Council for a fireside chat. Listeners tuned in from various sectors as the two experts forayed into discussions on the short-term and long-term implications of COVID-19 on different Fintech sectors.
Mr. Navin Surya explained the current landscape in the fintech industry in the wake of the pandemic, “For the first time ever, vendors, customers and merchants are all edging for contactless payments. In fact, we even see merchants from tier-3 cities urging to go digital. The adoption of virtual is wider than before, and while the way we engage has changed, content is still being delivered via digital. It’s a great time for fintechs to prosper, but once things improve, the industry overview will not be all-encompassing great, and perhaps at only 80-90% economy. Growth will vary segment-wise- with certain segments surging 2x, and some exhibiting 60-70% progress.”
Elaborating on how fintechs will need to evolve, Mr. Navin Surya added, “The three major areas that will need to change are customer onboarding, transactions and engagement. Fundamentally, there exist huge opportunities as well as associated challenges with COVID-19. The players that easily went digital, and adapt quickly will do well.”
Mr. Abhishant Pant pointed out the extent of digital adoption in the country. “UPI transactions have been recorded as at an all-time high. Card transactions, however are only at 50-60%; which shows that while customers have readily embraced contactless payments, card payments that were dominant at retail or higher-end purchases have declined steeply. When fintechs started around 2007-2008, it was a challenge to get consumer to adopt, but that has significantly changed now.” Mr. Navin Surya nodded with number, “Back then the adoption rate was -5%, and now it’s about +10%.”
Some important takeaways from the fireside chat:
Mr. Navin Surya: “Lending has been most affected, as has moratorium- the rules of which have had to evolve drastically. However, the companies that have the muscle to lend would have done well. While there will be growth in most forms of digital payments, the most prosperity would be seen in IMPS, NEFT and UPI.”
Mr. Abhishant Pant: “While most trends point towards wide digital adoptions, the trends are differently led in tier-2 and tier-3 cities. For instance, with the ban of Tik-Tok in India, there was quick adoption of alternatives such as Roposo across these segments; which exhibits the change in which digital content is being delivered in these segments.”
Mr. Navin Surya had important advice for young fintechs in today’s climate, “This is a great time for young fintechs who are building products. They must keep an eye on the financial constraints, and ensure that their capital reserve sees them through. It’s crucial to build products catering to the changed, new demands. And those that have already created products must work to customize them. Over the next 12 months, it’s essential to be mindful of your topmost needs and resolve these issues, whether it’s by acquiring new partnerships for financing or introducing value-add.”
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